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China’s Influence in Hong Kong – A Slow and Painful Erosion

In Hong Kong, China’s Grip Can Feel Like ‘Death by a Thousand Cuts’

Once one of Asia’s most high-flying cities, Hong Kong is now grappling with deep pessimism. The stock market is in the tank, home values have tumbled, and emigration is fueling a brain drain. Some of the hottest restaurants, spas, and shopping malls that local residents are flocking to are across the border, in the mainland Chinese city of Shenzhen.

“It pains me to say Hong Kong is over,” Stephen Roach, an economist and former chairman of Morgan Stanley Asia, wrote in a recent commentary in The Financial Times. The government needs to revive Hong Kong’s economy and promote its global image, but it has instead largely focused on national security. The recent passing of updated and new security laws aimed at curbing foreign influence and dissent with severe penalties like life imprisonment for treason and other political crimes could deter even more foreign businesses from investing in Hong Kong.

The malaise hanging over Hong Kong is partly a consequence of its status as a bridge between China and the West. With the city’s growth dragged down by the mainland’s sputtering economy and tensions between China and the United States.

At the heart of Hong Kong’s troubles is a crisis of identity, as the city’s Beijing-backed officials push the once freewheeling city away from the West and embrace the top-down political culture and nationalistic fervor of President Xi Jinping’s China. After massive anti-government demonstrations engulfed the city for months in 2019, Beijing imposed a sweeping national security law on Hong Kong in 2020, which the authorities used to crush the pro-democracy opposition with ferocity.

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In the Chinese Communist Party’s telling, the protests were fueled by Western forces seeking to undermine Chinese sovereignty. John Lee, the city’s Beijing-backed leader and a former police officer, casts Hong Kong as a city still besieged by subversive foreign forces. Mr. Lee touts the new security laws as the strongest foundation for Hong Kong’s prosperity and stability, eliminating threats to the city.

With the security laws in place, officials now say the government can focus on other needs, like reviving the economy. However, it remains unclear if Hong Kong can retain the dynamism and vitality that drove its prosperity at a time when Beijing’s control is increasingly overt. The new rules also raise questions about how the boundaries have shifted.

To visit Hong Kong today and scratch beneath the surface is to view a city vastly different from its vibrant, sometimes raucous political culture that existed before the current crackdown. Government critics and opposition lawmakers languish in jail, independent news organizations have been forced to close, and civil servants and public school teachers are being told to take loyalty oaths and pass national security tests.

The controversy surrounding soccer star Lionel Messi’s decision to sit out an exhibition match in Hong Kong due to injury stirred political tensions, with Chinese state media suggesting he had been used in a conspiracy to embarrass the city. Even voices within the Hong Kong establishment are not spared scoldings, showing an increasingly prickly official atmosphere.

Legal experts and trade groups have raised concerns about the broad and often vague wording of the new security laws, creating potential risks for businesses operating in or looking to invest in Hong Kong. The uncertainty has led some foreign firms to treat Hong Kong like the mainland, using burner phones and limiting local employees’ access to global databases.

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Amidst these challenges, residents like personal trainer Mark Lee are considering emigrating overseas due to the changes they see in their city. The feeling of “death by a thousand cuts” looms over Hong Kong as its once vibrant energy and optimism are sapped by external pressures.

In conclusion, Hong Kong’s struggle under China’s tightening grip reflects a city at a crossroads, where its identity, autonomy, and economic prosperity are being tested. The future of Hong Kong remains uncertain, with residents grappling with the evolving political landscape and its impact on their daily lives. As the city navigates a changing geopolitical environment, the resilience of its people and the spirit of Hong Kong are put to the test in the face of adversity.

Intellectuals Insider

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Is now the right time to invest in gold as prices have cooled?

Now may be the time to buy gold following a recent lull in its price.

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The price of gold has climbed to record highs recently and has remained strong through much of April. And, that growth continued until the precious metal traded at around $2,390 per ounce on April 19, 2024. But since, growth in the price of the precious metal has cooled, with gold’s price now hovering around $2,300 per ounce.

This lull in gold’s price may represent an investment opportunity.

In general, investing is centered around buying assets when prices are low and selling them when prices are high – generating a profit on the difference between the two. So, considering the declines in gold’s price over the past few days, now may be the time to make your investment. But is buying gold during this lull in prices really a good idea?

Compare your gold investment options among leading brokers now.

Gold prices have cooled. Should you buy in now?

With gold’s price down from recent highs, you may be wondering if now is the right time to buy in. There are several reasons the dip in gold’s price may represent an opportunity to buy. Here are some of the biggest:

Prices may rise again

If looking at a gold price chart shows anything for certain, it shows that changes in the overall growth of the medal come in fits and spurts. Periods of price growth are typically followed by periods of declines and vice versa.

But with inflation rising in recent months – and with gold’s reputation as a safe-haven asset that can hedge against inflation – it only makes sense that the price of the precious metal will eventually start to head up again in the future. While attempting to time that directional change may be tricky, buying the precious metal while the price is down gives you the opportunity to take advantage of any upward movement that may be ahead.

Add gold to your portfolio now before prices have a chance to rise.

You may be able to make a quick profit

Gold isn’t known as an asset in which you can earn a quick return, but in today’s market, that may be the case. Don’t forget that in January, gold was trading at just $2,000 per ounce. And, by mid-April, the commodity’s price had climbed to around $2,400 per ounce. That’s about 20% growth in a matter of months, much of which happened since March 1 – an impressive climb for any investment asset.

Perhaps more importantly, gold’s price growth through the beginning of 2024 shows that the commodity doesn’t have to be a buy and hold style investment that you keep in a safety deposit box or precious metal depository for years to come. There’s also the possibility that the commodity’s price could climb further ahead, making it a compelling way to potentially generate a quick profit.

There are other benefits of investing in gold

There are other benefits of investing in gold that have little to do with the price growth seen thus far in 2024 – or the lull in prices seen over the past couple of days. Those benefits include:

Inflation protection: Gold has long been considered an inflation hedge, and for good reason. When inflation drives the prices of consumer goods and services up – and the value of the dollar down – gold’s price tends to rise. So, it could be used to maintain the value of your portfolio during inflationary economic conditions. That’s important in today’s economic environment as stubborn inflation continues to weigh on the value of the dollar.
Portfolio diversification: Gold’s price doesn’t always move in the same pattern that bonds or stocks do. So, mixing a reasonable amount of gold into your portfolio (up to 10% of your portfolio assets) as a diversifier could protect you from losses should one or more of your traditional portfolio assets fall in value. “If you have less than 5% – 10% of your net worth in commodities & FX (forex), you should absolutely consider adding exposure to gold and other precious metals,” says Vijay Marolia, money manager and managing partner at the wealth management firm, Regal Point Capital.

The bottom line

Gold’s price has fallen from recent highs – which may represent an opportunity to tap into growth ahead. However, gold isn’t simply a “buy while it’s low and sell while it’s a high” kind of investment opportunity. The commodity can also protect your portfolio from the stubborn inflation we’ve seen thus far in 2024 while acting as a diversification tool that could increase your risk-adjusted portfolio returns. So, consider adding gold to your portfolio today while it has the potential to grow in value.

Joshua Rodriguez

Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he’s not working, he enjoys time with his wife, two kids, two dogs and two ducks.