Posted on 24/06/2019 Stand News :
In your author’s last article (see here) on the subject matter, he projected strong chances of Hong Kong Chief Executive (CE) Mrs Carrie Lam serving a full five-year term of office. However, the Public Sentiment Index (PSI) has unexpectedly crashed after publication in Nov 2018 (from 105.7 points, see blue diamond in Chart 1), through what looked like a well established trend channel (orange lines), due to her handling of the extradition amendment bill. Even before the mass demonstrations of the past two weeks, the government’s PSI reading has already fallen to 90, which also happens to be the lows reached by former Governor Chris Patten, as well as the highs ever reached by CY Leung (see top red dotted line in Chart 1).
Judging from the mass rallies since the last PSI readings were taken, it is almost certain that the next polls will show materially lower values still, the government would be very lucky to not see the PSI plunge below 80.
Chart 1：Starting on a lower popularity than Tung and Tsang, Carrie Lam may have exhausted the political energy that took 5-years+ to wear out for her predecessors
Past experience suggests that, where the government swiftly addressed the issues that led to mass protests, the PSI (red diamonds in Chart 1) stands a chance of rebounding (eg withdrawal of the Article 23 legislation). However, in that instance, a strong recovery in the economy and asset markets may have contributed materially to the popularity reading also. This time round, should the economy and property market turn down hard (both near the end of long bull markets), whatever Mrs Lam does may not be enough to resuscitate the government’s PSI. In a worst case scenario, the PSI may even retest the all-time low of 57, which was the lowest point achieved during CY Leung’s term.
Haemorrhaging freedom rankings due to ever closer integration?
Taking the average of three freedom indicators published by the Public Opinion Programme of The University of Hong Kong (HKUPOP) – ie freedom of press, freedom of speech, and freedom of procession and demonstration – we have plotted the trend of how Hongkongers perceived their collective freedoms over time. The average freedom index (AFI) reached its maximum during Donald Tsang’s term, but has unfortunately fallen dramatically under the aegis of the next two CEs, reaching a record low shortly after Mrs Lam came to power (blue line in Chart 2):
Chart 2：Rapid decrease in perceived freedom under CY Leung and Carrie Lam
Comparing the domestic perception to international objective scores, one could plot the AFI alongside HK’s ranking in the Personal Freedom Index as compiled by the Fraser Institute, and not surprisingly see a reasonably good fit of the two surveys (see chart above) With the HK derived AFI leading the Fraser rankings, we might even be able to project where HK will come out in the upcoming Fraser results.
A troubling picture emerges from the projected Fraser rankings. Hong Kong’s freedom peaking at position #14 in 2013, when the city was a proud neighbour to western developed countries (eg UK, see left column, Table 1). The latest available Fraser survey, which relates to 2016 rankings, however shows Hong Kong to have deteriorated to #32 in the league tables (its lowest position on record), and is now side by side with emerging Eastern European countries (eg Slovakia, see middle column, Table 1).
Table 1：from Western neighbours to Eastern European cohorts to Latin Americans …
| Peak (2013) | Now (2016) | Future (2019+)* | |||
| 11 | Netherlands | 29 | Japan | 37 | Uruguay |
| 12 | Australia | 30 | Italy | 38 | Hungary |
| 13 | New Zealand | 31 | Romania | 39 | Chile |
| 14 | Hong Kong | 32 | Hong Kong | 40 | Hong Kong |
| 15 | United Kingdom | 33 | Slovakia | 41 | Bulgaria |
| 16 | Belgium | 34 | Cyprus | 42 | Argentina |
| 17 | Luxembourg | 35 | Croatia | 43 | Mongolia |
| 134 | China | 141 | China | 141 | China |
| 135 | Chad | 142 | Cameroon | 142 | Cameroon |
| 136 | Ethiopia | 143 | Pakistan | 143 | Pakistan |
*The latest data is from 2016, which is used to see the possible cohort of Hong Kong.
By extrapolating the latest AFI from HKUPOP, we fear further big slides may be in store for Hong Kong – assuming the ranks for other countries from the 2016 results have not changed, Hong Kong could conceivably fall out of the top-40 list, to sit alongside the likes of Latin American nations (eg Argentina, see right column, Table 1). During the whole of the time period we discussed, China has persistently ranked below 133, neighbouring the likes of Cameroon and Pakistan.
The biggest worry for all Hongkongers must be further and continued slip down the freedom rankings, which could reduce their ability to think, speak, or publish freely, but cause negative economic repercussions – what if, due to the increasing likeness their home takes to any PRC city, the international community starts to withdraw the special favoured status afforded Hong Kong? Would such a change in status lead to another wave of mass emigration? Would this outcome result in uncontrolled drops in local asset prices? This is certainly a topic for another article, watch this space.
The author would like to thank Kristy Wong Lai Yi of The City University of Hong Kong for assisting in data collection, analysis.
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