Shanghaied Markets?

What’s happening in Hong Kong?

Source: Wikipedia

Last month Beijing made it clear that while Hong Kong’s population may be free to vote for their next chief executive, the Chinese government will control who gets to run. This decision has sparked a series of protests in the Hong Kong financial district, bringing tens of thousands to the streets.

The protests have been organized by a group of professors, students, and church leaders. They want to persuade Beijing to allow truly free elections. Good luck with that! Many of us have chilling memories of what happened to the last massive protests against the Chinese government 25 years ago in Tiananmen Square. That did not end well.

But there are reasons to hope that these protests may prove more effective. For one, they started with a petition drive that drew 1.5 million signatures—over 20% of Hong Kong’s population. For another, the ubiquity of digital and social media means that organizers can quickly mobilize protesters and share images, despite Chinese censorship.

But the biggest cause for optimism may be the aspirations of Beijing’s leaders themselves. The most important observers of what is happening in Hong Kong may be Taipei, Taiwan‘s capital. Beijing wants to bring Taiwan into its orbit; how it deals with peaceful protest in Hong Kong will show the world—and especially Taipei—whether it is truly committed to “one country, two systems.”

So far, markets have been sanguine about the protests, with Hong Kong’s exchange off only 10% from its recent peak. But don’t be complacent: if China’s leadership gets nervous and initiates a violent crackdown, things will get awfully volatile, awfully quickly.

Douglas R. Tengdin, CFA
Chief Investment Officer
Phone: 603-224-1350
Leave a comment if you have any questions—I read them all!

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By |2019-02-20T13:04:47+00:00October 2nd, 2014|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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