Asian shares kicked off the new week with bullish fireworks, led by Hong Kong, where equities surged after Donald Trump’s much-ballyhooed Friday press conference turned out to be long on aggressive rhetoric but short on action.
Right or wrong, markets interpreted the US president’s remarks as entirely devoid of substance (America’s exit from WHO notwithstanding).
Real estate shares paced gains in Hong Kong, as the Hang Seng jumped 3.4%, while mainland equities rallied more than 2% for the session.
The CSI 300 has underperformed the S&P for two months in a row and the Hang Seng is coming off one of its worst months in decades relative to global stocks.
Make no mistake, the situation in Hong Kong is still dire. Retail sales plunged 36% in April by value and 37.5% by volume, data out Monday showed. This speaks to just how beleaguered the city’s economy is as the business community ponders the decidedly unpalatable prospect of the US stripping the city of its preferential status.
In a sign of things to come, Hong Kong’s police banned the June 4 vigil to commemorate Tiananmen Square for the first time ever, citing the coronavirus.
“The ceremony, which has regularly drawn tens of thousands to Victoria Park, has been a fixture in Hong Kong since 1990, underscoring the contrast in liberties between the city and its mainland patron, where the event is censored from all media”, Bloomberg reminds you.
As expected, China trolled the US for the violent protests playing out across multiple American cities.
On Sunday, in “America’s Chaotic Spiral Into Domestic Unrest Opens Door To Familiar Allegations Of Hypocrisy“, I suggested Hua Chunying, a spokeswoman in Beijing with a flair for the dramatic, would almost surely be unleashed. As it turns out, she already was. On Saturday, she embarrassed Morgan Ortagus, for example.
"I can't breathe." pic.twitter.com/UXHgXMT0lk
— Hua Chunying ??? (@SpokespersonCHN) May 30, 2020
Hua also tweeted a video describing violence in the US with the words “THUGS & HEROES HYPOCRISY”.
“Why does the US beautify the so-called Hong Kong independence and violent elements as heroes and fighters while it calls its own people protesting against racial discrimination ‘rioters’?”, foreign ministry spokesman Zhao Lijian asked, in Beijing on Monday.
“Why does the US point fingers at the constrained law enforcement by Hong Kong police but turn a blind eye to what happens at home while using shooting and even the National Guard against the protesters?”, Zhao went on to wonder.
“US National Guard firing into residents homes” was among the top trending topics on Sina Weibo Monday. Chinese netizens, it would appear, are keen to watch the viral video showing police firing marking-paint canisters at non-protesters standing on their front porch in a Minneapolis residential neighborhood. I mentioned that video in the linked post above.
China is likely feeling emboldened on the economic front. The latest PMIs show the world’s second largest economy on the mend, while the US is still in the teeth of the deepest downturn in at least a century.
Finally, in news that dented US equity futures and sent the yuan lower after the currency started the month on the front foot, sources said Beijing instructed state-owned traders Cofco and Sinograin to suspend purchases of US farm goods, including soybeans.
“Chinese buyers have also canceled an unspecified number of US pork orders”, a source told Bloomberg, which notes that “the halt is the latest sign that the hard won phase-one trade deal between the world’s two biggest economies is in jeopardy”.
As noted here on countless occasions over the past two weeks, there is no chance China will hit the 2020 targets established in the “phase one” agreement.
Several experts have been keen to remind market participants that those targets were never realistic in the first place, something both sides likely knew when the “deal” was signed in January.
It was never more than a red herring that allowed both leaders to save face after a damaging two-year standoff.
Looking at Trump’s performance as a businessman, is it surprising he’s losing his ‘war’ with China. He is, however, doing a great job in destroying America’s reputation as the leader of the free world. Zhao Lijian does make a good point – the old ‘one person’s terrorist is another’s freedom fighter. Xi hasn’t yet outright threatened Hong Kong residents with ‘ominous weapons’. Trump isn’t strategic or tactical, just reactive.
Quelling the riots with the heavy-handed use of force will further damage the American polity as well as its reputation around the world.
Chinese propaganda aside the administration is clearly angling to corner the law and order vote in November. If Republicans manage to hang on to both the Senate and the White House in the coming elections, inequality and instability will become ever more prominent hallmarks of the United States.
The irony of comparing the HK the MN Situation is that
In the case of HK, the unrest was local to HK, and the China 1st Tier cities ( like Beijing, Shanghai ) never experienced unrest nor policing actions
In the case of MN, the protests spread quickly to many other US cities bother leading and emerging, on both sides of the coast
Suffice to say, China wasn’t really mocking Trump, it was pointing out factual hypocrisy via useful chastising
Well, to be fair, protests in Shanghai and Beijing are a non-starter — like the time Wilbur Ross said he was impressed there were no anti-Trump protests in Riyadh. One doesn’t just take to the streets in an outright autocracy. You’d be arrested immediately.
Just a few words from a little woman, ya little heart can’t bear no more, how come? She just she, not China, bickering everyday till the life is end, is that what you want? Be wise.