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Wake up, world. China is changing.

The recent pro-democracy protests in Hong Kong have undoubtedly triggered change in China, according to Han Dongfang, a 1989 Tiananmen activist who now works in Hong Kong as a radio commentator. Since the gist of my post today comes from articles by other authors, a few acknowledgements are in order. First of all, thanks to Larry Willmore and his “Thought du Jour” blog posting on Hong Kong, reproduced in full (text in italics) below.

Secondly, thanks to Joe Studwell for his sensible and measured op-ed, published in the Financial Times of 7th October, on where the focus of the protests should lie (What Hong Kong needs is not a strategy that backs Xi Jinping, the Chinese president, into a corner, but one that resonates with his own mindset. This is why the protesters should refocus on Hong Kong’s tycoon economy, and the anti-competitive, anti-consumer arrangements that define it.) Anyone interested in Hong Kong should read the whole editorial!

And third, thanks to Han Dongfang and Quartz digital magazine for “advice from a 1989 activist.”


You may think, like the Heritage Foundation [and Milton Friedman!], that Hong Kong is a free market. However, except for external trade, it is not. ….Cartels are everywhere in Hong Kong. Supermarkets are a duopoly, one whose pricing power allows the chains to charge higher prices for the same products in some of Hong Kong’s most deprived areas. Drug stores are a duopoly. Buses are a cartel: high-priced, mostly cash-only, running shoddy, dirty diesel vehicles with drivers who earn a pittance. Electricity is provided by two, expensive monopolies that handle everything from generation to distribution, one on Hong Kong island and the other in Kowloon. The container ports are an oligopoly, with the world’s highest handling charges. Yet they will not supply onshore electricity to vessels, which must instead run diesel generators that pollute the city air.Joe Studwell, “Hong Kong should focus its fight on the tycoon economy“, Financial Times, 7 October 2014 (ungated link).

Joe Studwell is a freelance journalist based in Cambridge (UK). His latest book is How Asia Works: Success and Failure in the World’s Most Dynamic Region(Grove Press, 2013). He blogs at joestudwell.wordpress.com/.

Mr Studwell writes from the political left, so overlooks two features of Hong Kong that illustrate the paucity of free markets. First nearly half the population lives in public housing. Second, anyone with a Hong Kong ID is eligible for subsidized medical care in public facilities. There are 41 hospitals and 122 outpatient clinics run by the government’s Hospital Authority (HA), but only 13 private hospitals.


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