Brexit shambles

January 18, 2019

Brexit is a shambolic disaster – I think few would disagree – but it is exceedingly difficult to see how we get out of this mess.

It is unfair to blame this all on Brexit. It was always going to be a difficult task to pull us out of the European Union – I think few people, myself included, realised quite how difficult – but Theresa May and her bunch of appointed cronies made things all the harder right from the start.

She unnecessarily drew red lines in the sand too early, when she didn’t need to.

She pandered to the British electorate when she already had a mandate, rather than diplomatically coddling up to our EU partners.

She has displayed brazen arrogance and ineptitude, not to mention a fundamental misunderstanding of the EU, right from the start.

No, I am not a fan of Theresa May.

But the question is: just what the hell do we do now?

Having spent the past week looking at the potential impact of Brexit on Asia, I can say one thing: whilst British financial firms didn’t really want to leave the EU in the first place, what they hate more than the idea of leaving is the uncertainty about what leaving means.

I talked to a source from an Asian regulator about this, and she surprised me by saying that they hadn’t actually been hearing much concern from European banks over here – probably, she guessed, that Brexit was such an insurmountable challenge that no one really knew what they should be worrying about first. So they didn’t – and kind of just hope that everything will turn out okay.

The squabbling between the Brexit and the Remain camp is not helping things. This is prolonging the uncertainty. Talk of a second referendum is prolonging the uncertainty. We need to put things together, move beyond party politics and move on.

Whilst I do, as a previous blog entry will show, have reservations about Brexit now, I would, in a second referendum, vote the same way: to leave. I feel that the democratic process has been hijacked by political ineptitude, and Brexit has not had the chance it deserves. I know a few Remainers, too, who feel the same way – and would indeed now vote to leave if another referendum were held, simply because democracy has not properly been applied.

Remainers often assume that a second referendum is the answer to their problems. But it isn’t.

For one thing they incorrectly assume they would win, but that is far from a certainty. They may lose – and what then? We would never rejoin the EU for generations.

And even if they did win, the majority would again be so slim as to prompt calls for a third referendum.

Make it best of three, eh?

And then what about all the pent-up anger spilling on to the streets. Violence has no place in any democracy, but you can’t ignore it. Many Brexiteers would be sorely disenfranchised by the whole process and would vent like nothing before, plunging the UK into a real crisis which would potentially be far more damaging than a crisp and clear Brexit.

We do need to get rid of Theresa May and get our shit together.

Because right now everything that is going on is far, far more damaging than leaving the EU should ever have been.

The Blue House

January 14, 2019

China: Risk is creeping back in

January 14, 2019

This morning at the Asian Financial Forum in Hong Kong, the vice president of China’s Banking and Insurance Regulatory Commission (CBIRC), Wang Zhaoxing, stood up and pronounced that he was ‘neutral’ on the prospects for economic growth in 2019.

By comparison, most of those who responded to a poll question on the subject (47%) said that they were ‘pessimistic’ about the outlook for the global economy, whilst 38% adopted the ‘neutral’ tone. Just 15% said they were pessimistic.

Of course, Zhaoxing can possibly afford to be a little more optimistic than the majority of those in the audience, because the dip in growth that China is seeing this year can at least partially be attributed by the endeavours of his organization – as well as other regulators in the country – to tighten the screws on dodgy financial practices that have seen companies raise large sums of money through the murky world of shadow banking.

Chinese authorities, of course, now have quite a bit of leeway to take their foot off the brake and continue to allow companies to accumulate dodgy debt in return for sound economic growth. This appears to be what the authorities are now doing, and the implementation of a number of rules aimed at reining in shadow banking have now been delayed.

To an extent this is sure to counteract, to an extent, the uncomfortable trade war with the US. And may indeed prevents China’s GDP growth from declining too sharply ths year.

I think Zhaoxing is probably right to maintain a ‘neutral’ stance, whilst the rest of the world, in the grip of Trump and Brexit, may be forgiven for adding a dose of pessimism to their outlook.

But at what cost?

2019 may not see such a dramatic slowdown in growth in China – this is the last think that the Communist Party wants – but as it is seeking to stave off the impact of the US trade war and weak economic sentiment around the world, the authorities are preparing to let risk creep back into the system.

That is worrying and dangerous.

Fake news

September 30, 2018

Few things rile a journalist more than the proliferation of fake news, particularly when the whole world appears to prefer to believe that which is inherently untrue.

Not a day goes by when I don’t see some form of fake or blatantly misleading news in my Facebook feed. I have now given up politely informing the link-sharer of this sad fact, and have instead decided to take to my blog to lament the sorry rise of this social media phenomenon.

First let me emphasise what a terrible tragedy fake news is. And I don’t just mean for us journalists, who make a living by trying to uncover the most accurate version of the truth that we can. I mean for society in general and indeed for those causes that such fake news propaganda has been created to promote.

Let’s use a real world example. In 2007, the UN’s Intergovernmental Panel on Climate Change (IPCC) published one of its periodic assessment reports in which it claimed, based on observed measurements between 1990 and 2005, that the earth was warming at an average rate of 0.2°C and that this would continue for at least the next 20 years. In 2013, the IPCC published a revised report in which it claimed, based on the more recent 15 years between 1997 and 2012, that the world was only warming 0.05°C.

Quite why the IPCC got the calculations wrong in the earlier report remains unclear – presumably because modelling climate change is so damn difficult – but the fact that it did so is of crucial importance. The 2013 report was widely leaked ahead of its official publication, and journalists the world over started asking questions about how the IPCC could have got things so very wrong.

The world already has plenty of climate-deniers. It didn’t need a media-driven frenzy to find any more. But that is almost certainly what it got.

Of course this wasn’t a fake news story that got out of control. It was an intergovernmental organisation that made a (presumably honest) mistake. But I think it makes my point: by getting things wrong huge damage had been done to all those activists, including many people at the IPCC, that want to raise the alarm that urgent action is needed against climate change now.

So disseminating fake news is likely to harm rather than help campaigns in the long run.

The second point to make is that understanding when a story is false is not actually all that difficult. Snopes is actually a very good website for verifying whether a story is true or not.

Having worked as a journalist for nearly 20 years I tend to do this more by instinct more than anything else – but there are a few key things to look out for.

For one thing, any news that sounds too odd to be true probably is (though of course there are always exceptions). This applies as much to video as to print. People often assume that just because something is recorded, and one can clearly hear the words being spoken on camera, then this by de fact true. But there are some very clever video editors out there and video can be doctored as easy as anything. Context is all important, and if you have only an excerpt of a clip then how can you be sure that the question being answered is the one that was asked? I saw a very clever video misrepresentation the other day, and would have believed it had the conclusion of what was being said not been so preposterous.

The other thing is to look at the source. I’m a great fan of independent media, but many smaller indy outlets have an agenda to push and, in so doing, don’t mind disseminating untruths or half-truths. By contrast, I would say that the mainstream media have to be more vigilant in their fact-checking, although the pressure of the daily news-gathering grind means that more and more errors seem to be slipping into reporting these days.

And of course context is everything. Who is saying what they are saying? When? And why?

So fake news is clearly a bad thing. It’s a terrible thing. It damages the causes of those that use such stories in their campaigns.

Which brings me on to the final point of this blog entry: given that fake news is such an unconscionable blemish on the fourth pillar of democracy what should we do about it?

Leave it.

In this day and age of free information, no one has the right to decide what can and cannot be read, what is or is not true. There has always been fake news, ever since the concept of news was first created. It was used to sell papers or to push agendas – in much the same way as it is today. The difference is that today, because such fake news is much more widely and rapidly disseminated, it is far more dangerous than it ever was in the past.

But that is no reason to censor it.

The social media giants Twitter and Facebook have set a worrying precedent by promising to clamp down on what they perceive to be fake news. But who the hell are they to police the internet? They are a successful platform for the publishing of content – it is not for them to determine what should be there and what should not be (within the realms of legality, of course).

It is up to us, the consumer, to read articles with a clever eye, to be aware of what is within the realms of possibility and to only share things when they seem dull enough to be true.

One’s feed on Facebook and Twitter might be less interesting. But at least it would be more honest.

That is how we should fight fake news.

The case against a second referendum

September 27, 2018

The past 18 months has seen a governmental balls-up of monumental proportions.

Over this period I have shifted from being a reluctant Brexiteer to being a reluctant Remainer. Full disclosure: I voted with a heavy heart to leave the European Union but now find myself regretting this decision.

All that this has taught me is that the decision of whether to leave the EU was a hugely complex matter best left to well-informed experts and not thrown out to the general public who cannot possibly be expected to comprehend all of what this might mean. Thank you for that Mr Cameron.

Other than that I’m still at a loss for what the best course of action would be.

I agonised for days about where to put that ‘X’. I have also so far resisted talking much about this decision, or trying to justify it, for the simple reason that the debate has become so heated and antagonistic that I didn’t feel like entering it. Call it cowardice if you will, but I feel that people have become so entrenched in their positions – on both sides of the divide – that they are unlikely to want to look fairly at another point of view if it doesn’t agree with theirs.

But here’s the reason, in brief, that I voted ‘Leave’.

For starters, I want to distance myself from the likes of Nigel Farrage and Boris Johnson. People like these were the populist voice of the eurosceptic movement, but never really represented – or even came close to – the much more sophisticated grassroots movement that I got to know during my Brussels days. In fact, none of the eurosceptics that I am on close terms with actually have much time for these people, believing that they detract from what are some very valid reasons for leaving the EU.

My reason for deciding to vote ‘Leave’ – and for agonising so much over the decision – is simply because it wasn’t a fair question to ask. It wasn’t a question about whether to leave the EU or to stay within it. It was a vote between leaving or supporting ever-closer federalism.

Had we voted to remain, that would not have been the end of the matter. The EU would have used this vote to crush any eurosceptic dissent, not just in the UK but throughout Europe – and, to be fair, eurosceptism in the UK is the only eurosceptisim that has ever really mattered. Eurosceptisim in other countries has either been too weak or too pragmatic; Denmark has a very strong eurosceptic flare but were they ever going to consider leaving? Not really.

So the EU would have used any vote to remain to push through some rather unpalatable reforms, portraying British eurosceptics as fringe nutcases that are significantly out-of-step with mainstream opinion. Westminster, needing to be seen to back the outcome of a successful referendum, would then have had no choice but to acquiesce to Brussels’ demands or to be seen to be destabilising the result of the referendum that it had fought so hard to win. In good conscience, I could not vote towards such an outcome.

That is the first point.

The second reason for voting ‘Leave’ comes from the five years I spent in Brussels seeing how the EU is run. Everyone comes away from the European capital with a different view of their time spent there. A well-known eurosceptic MEP that I was briefly fairly close to had the view that, in order to foster eurosceptism throughout the continent, he simply had to bring as many people to the halls of European power as possible, just to see how things worked. He had a point.

Saying that the EU is an undemocratic institution is an argument easily put down. European citizens elect the MEPs that serve in the European Parliament and, although they don’t have a say about everything, their power has been increasing. European Commissioners – which head of various departments of the EU’s executive body – are appointed by national governments. And then the EU’s Council, which has to sign off on just about every bit of new legislation, is made up of national governments.

So labelling the EU as undemocratic is of course easy to counter. But there is clearly some kind of democratic deficit here, if only because most people don’t really understand how the EU works, what powers it has or exactly what MEPs are responsible for.

What I will say is that the unaccountability of the EU is dangerous – and that is the other chief reason that I was not comfortable supporting our membership of the institution. I have seen from close quarters how corrupt the EU is, and how vested interests have lured the bloc into making unconscionable decisions that hav been bad for the whole of the continent.

If people within a national government make the wrong decision in order to further their own ends – and this comes to light – then the laws of modern democracy hold them to account. Not so with the EU and, though journalists have tried to shine a light on various misdeameanours, little has changed within the cozy little club. This is not good for Europe as a continent.

So those are the reasons, as concisely as I can put them, for why I chose to vote ‘Leave’.

So what of the talk of this second referendum?

Having seen what a mess Theresa May’s government has now made of Brexit – largely because of the sharp divisions within the Conservative Party but also because so many people in power seem to display a fundamental misunderstanding of how Europe works (‘negotiate’ does not mean ‘dictate’ – and, no, I agree, you can’t cherry pick) – I now regret my previous decision and wish I’d voted the other way, or the outcome had been different.

Which might suggest that I’d be in favour of a second referendum. After all, I’m well aware of all those cartoons that point out that, one way or another, once you shoot yourself in the foot and end up with a big hole there, and realise that shooting one’s foot is actually not the wisest course of action, then it actually might not be a bad idea to stop shooting.

But no.

And here’s why, in three words.

Maastricht. Nice. Lisbon.

The Treaty of Maastricht, which set up the European single currency, was rejected in 1992 by the Danish. Ireland rejected both the treaties of Nice (2001) and Lisbon (2008). In all cases, the electorate, who were clearly ill-informed and thick as pig shit, were told they got things wrong and to vote again.

I do not want that for my country.

Okay, there were some superficial tweaks before the second votes took place, but they were nothing substantial and in no way justified going to the polls again. In the rerun of the Nice vote – which is the one I reported on and therefore know most about – the Irish government managed to secure a ‘Yes’ by disingenuously and somewhat bizarrely lumping the vote in with three other issues, one of which was a move to strike the death penalty – widely regarded in Europe as a bad thing – from the statute books. How can an electorate, unfamiliar with the machinations of Brussels, really reach any sensible conclusion amid such dishonesty?

Basically, do not hold a referendum if it is not going to be binding.

Now I’m not saying that I would never support a second referendum, but I am saying that for me to support a second referendum it has to be demonstrably different from the referendum held last one.

So Theresa May has a difficult task ahead of her.

Either she has to lay out a clear course of action for leaving the EU that can be acceptable to our European partners – and since she loves to have her cherries, right now she seems as far away from ever from being able to do that.

Or she needs to come to the British electorate with promises that extend way beyond what the conditions of the first referendum. And of course she can’t do that because, it order to make the terms of the second referendum sufficiently different from those of the first, she would have to promise things that she doesn’t have the power to promise.


Hard place.



September 25, 2018

It started as we were leaving Guilin, a city in southern China, not all that far from Hong Kong.

We were picked up at the train station by someone from our hotel – Wada Hostel, an excellent place to seek accommodation should you ever have the need – and then started making our way out of the city at what seemed, to our tired state of mind, very much a snail’s crawl.

And then as we were thus making our weary way to our final destination – Yangshuo – I noticed that we seemed to be passing street upon street of buildings devoid of any light. Ghostly black shadows skulking on the edge of darkness as we slunk by .

They all seemed empty. Lifeless. Vacant.

Either that or the whole city had embarked on some energy-saving fad.

The following day we took a raft down the Yulong River, passing dozens upon dozens of half-constructed buildings, or buildings that had been constructed not so long ago but now stood conspicuously empty. A number of these buildings were four or five storeys high, prompting me to remark that some ambitious prospectors were hoping to turn such buildings into lucrative hotels.

I found such buildings – constructed in the uninspiring square block style that seems so ubiquitous throughout communist countries the world over – quite unattractive, and a blight on the surrounding countryside.

“Stop building!” I wanted to yell, and probably did end up shouting aloud during the following days of travelling through fabulous countryside that had been blighted by these damnably ugly buildings for which there appeared little need (since they remained, for the most part, unoccupied).

The day after our river trip we had a similar experience, cycling through this same fabulous countryside of which I have already spoken: time and again our eyes would be sorely wounded – for there is no other word – by some appalling new construction that by rights ought not to have been there.

This, I felt, was to experience the Chinese construction boom that has been sweeping the country, where buildings have been thrown up all over the place in the misplaced belief that China’s vast population – or indeed the growing number of foreign and Chinese tourists – actually want to avail of them.

It sometimes feels that everywhere one goes in the world these days a crazy amount of construction is taking place, and yet no one seems to be questioning this or voicing doubts that it is actually necessary. No doubt for the simple reason that such mindless construction at least gets money circulating, thus providing an artificial gloss to the overall economy.

But sometimes I feel it would just be better to stop the bloody building.

Derivatives: A Love Story

May 30, 2018

Not since Mao

March 24, 2018

China’s head honcho, Xi Jinping, can now theoretically remain in power for life, having successfully got rid of the constitution’s pesky maximum term limit of two years earlier this month. None of this, of course, is very good for China’s peculiar brand of Communist Party democracy. But it might augur slightly better for reform of financial markets.

Last year, Beijing announced plans to tackle the country’s vast mountain of debt (which could be as high as three times the size of the economy, according to some estimates), with a particular focus on reigning in shadow banking.

The task is huge, with some estimating the shadow banking economy to be worth as much as $8.5 trillion (the opaque nature of the sector means that precise figures are a little hard to come by).

That is why in recent speeches senior Party officials have conspicuously steered clear of any mention of GDP growth. They know that they have got to tackle the risks in the financial system – and they also know that, in order to do so, the spectacular growth that China has been enjoying over the past couple of decades will have to take a bit of a hit.

Now is a good time. With GDP growth hitting 6.2% in China last year – well above the UK’s measly 1.7%, the eurozone’s valiant 2.2% or the US’s even better 2.3% – Xi and his henchman know that they have a few basis points to play around with.

But the question has always been: how much GDP growth is Beijing willing to sacrifice on the altar of financial reform before saying enough is enough and back-peddling?

The concern from pundits is that the task is so vast that there still isn’t enough room for doing all that needs to be done. Just look at what happened to Japan when it attempted to do the same in the 1990s, following the implosion of its own credit bubble. The country has never been the same since.

The danger that some fear is Beijing may stop much-needed reforms right in the middle – once GDP growth falls too much.

That concern may have lessened slightly now that Xi has made it abundantly clear that he is the man in charge. As one industry source told me during my recent trip to China, “Xi may be willing to take a few more punches than he might have otherwise felt comfortable with”.

Whilst China has come a long way since the days of Mao Zedong, it is still very much run along Communist Party lines. It still has grandiose five year plans. They may not be quite in line with the ill-conceived and ultimately disastrous Great Leap Forward, but there are some similarities in how they are drafted. In particular, the goals they tend to set are often overly-simplistic and benchmarked against something that is easily measurable. GDP performance is a pretty good yardstick to use.

Thus China’s municipal governors have not in the past been rewarded for such mundane goals as stamping out human rights abuses or making sure that people can actually breathe air without becoming ill. They were rewarded for contributing to the economy. If they had to wreck the environment and trample on individual freedoms in order to do so then so be it. At least GDP continued to grow.

Things have just got more complicated – and such complexity needs a strong leader to make sure that things don’t get derailed.

But even that might not be enough.

There are two dangers.

One is that a strong leader can become increasingly autocratic. Look at what happened to Mao. He wasn’t the kind of leader you could just pick up the phone to and chew the ear off of. He might have you shot. That’s why no one told him his collective farming scheme or his Great Leap Forward were both daft ideas. Well they might have done. But then they’d have been shot and we’d never know about it.

There are positive signs from the market that the authorities are still in a listening mode – hungry for outside knowledge and eager to act on the advice that they receive. They should keep this up.

The second danger is that the Chinese authorities may have left things too late. It may be that the task is so vast that Xi, for all his present clout and his new ‘leader for life’ status, just can’t stick the distance. Or gets bored and wants to buy a Ferrari instead.

When I was in Beijing, the official air quality index was well over 200. I could barely see one block in front of me. My eyes were streaming and my throat was hoarse. That’s really unhealthy, man – and a clear reminder that, when it comes to reforms, there is still much that needs to be done.

The problem is the government has focused for so long on GDP growth that it may not know how to do anything else. With or without Strongman Xi at the helm.

The tale of a black-and-white cat

March 15, 2018

I’ve decided to start blogging again, after quite a hiatus, and my first entry in this new blogging phase is going to be about the black-and-white cat that we left behind in The Netherlands when we moved to Hong Kong.

It was a vicious bugger, make no mistake. It would scratch and bite for the slightest transgression – and even on those occasions when it was totally unwarranted.

But we did like that cat and felt hopelessly guilty at leaving it behind in the Netherlands. In fact, we asked the first tenant that moved into our place if she could look out for the cat, and perhaps let it stay in the house if it was raining occasionally. He kindly obliged.

(And before you think too badly of us for abandoning this cat, it wasn’t ours – it just adopted us one day and moved in with us. We never asked to take possession of it. And we couldn’t very well take it to Hong Kong with us.)

Anyway, fast-forward a few years and our previous tenant, who has since moved out, contacted me to say that the original owner of the cat has been found. The cat was chipped, apparently, something that was discovered when she was taken to hospital for treatment of an abscess.

Now this entry doesn’t stop here. During the time when we lived with the cat, I became convinced that she had been abused in the past – possibly by a previous owner. Everytime that we picked up a broom, she would run away in terror.

Apparently our neighbour in the Netherlands had a similar concern, but her attempts to make sure that the cat will be okay has been scuppered by data privacy rules. So neither the cat nor ‘rightful’ can now be traced.

Five years the cat has been living at our house in The Netherlands. Five years she has been missing from her ‘rightful’ owner. I never once saw a poster of this cat. I would have noticed and almost certainly responded.

Five years, perhaps half her life (at a guess), the cat has been living elsewhere.

But she was chipped.

And, what with possession being nine tenth’s of the law, that’s it I guess.

It’s out!

January 28, 2018

Our brand new guidebook to Hong Kong has just been published. We can categorically say, without fear of hyberbole, that it is the best and most up-to-date guidebook about Hong Kong currently on the market. It is also in full colour! You can order direct from our website – free delivery if you are in Hong Kong and in the UK.

So what are you waiting for?

Why are you still on this page?