Asian Insider July 29: EU, trade talks, climate change and China’s position on Hong Kong

Asian Insider brings you insights into a fast-changing region from our network of correspondents.

In today’s bulletin: China reiterates its position on Hong Kong, abandoned trade talks set to resume in Shanghai, the EU is set to restrict market access for five countries and more.

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CHINA CONDEMNS "HORRENDOUS INCIDENTS" IN HONG KONG

China laid out its position on the protests in Hong Kong today in a rare media briefing by a spokesman for the Hong Kong and Macau Affairs Office, a unit with Cabinet-level authority over the territories. Not that much was new from the press conference though Beijing has never before felt compelled to organise an entire briefing just to talk about Hong Kong.

What was said: Mr Yang Guang, the spokesman for the office condemned what he called "horrendous incidents" in Hong Kong while reiterating Beijing’s firm support for Hong Kong chief executive Carrie Lam. He also dismissed accusations that triads in Hong Kong were colluding with police. On a question of whether the People’s Liberation Army might step in, he said: "There are clear provisions within the law. The most pressing task now is to bring criminals to justice and restore order."

What now?  The weeks of protests have settled into a pattern, with weekdays generally calm, and protests flaring up on the weekends. That current pattern looks to continue for some time with no clear indication of how this episode might end.

Background:

Hong Kong triads in the spotlight after Yuen Long attack: Who are they

TRADE TALKS SET TO RESUME

Trade representatives from the US and China are due in Shanghai tomorrow to finally restart talks after both sides left the negotiating table in a huff three months ago.

What’s different: After multiple rounds of trade talks ultimately collapsed without a deal, observers are taking a much more sceptical approach to this one. Most note that the meeting between US President Donald Trump and Chinese President Xi Jinping that paved the way for the restarting of talks did not address any of the key differences that led to the breakdown in the first place. Another cause for pessimism is the addition of China’s hawkish commerce minister Zhong Shan to the talks.

Latest reports:

US-China trade talks set to resume despite mixed signals from both sides

China to amend patent law to pacify US, spur innovation

EU TO TIGHTEN MARKET ACCESS

The Financial Times is reporting that the European Commission is set to strip some market access rights from Canada, Brazil, Singapore, Argentina and Australia, saying that the five countries do not regulate credit ratings agencies with the same rigour as the EU. The move would remove a status that allowed European banks to rely on credit ratings issued outside in those countries. This is the first time that the access rights, known as “equivalence provisions” have been withdrawn.

The big picture: The decision has not yet been made official and as such we do not yet know how the financial regulators in the different jurisdictions will respond. (We are expecting an official announcement and responses later today) The FT report, however, notes that the UK will be watching the development closely - concerned that an aspect of market access that it will rely upon post Brexit can be taken away. 

Further reading:

EU to strip five countries, including Singapore, of some market access rights, FT says

SUICIDE CONCERN IN SINGAPORE

Suicides among teenage boys hit a record high in Singapore last year, according to the breakdown of official statistics provided by the Samaritans of Singapore. Though not at record levels, the number of people taking their own lives across all age groups also rose, with those over 60 the sole exception. In total there were 8.36 suicides per 100,000 residents in Singapore in 2018, up from 7.74 in 2017. Seventy percent of suicides last year were by men.

The big picture: In the grand scheme of things, Singapore’s suicide rate is still comparatively lower than many countries in the region - the suicide rate in South Korea is above 20 - but the increase is a signficant concern in the fast-paced, high-pressure city. The Samaritans of Singapore noted that it was disconcerting that many young people “felt unsupported through their darkest periods”.

Further reading:

Our special report on suicide: Breaking the silence on suicide: A mother opens up about the loss of her teenage son

AND FINALLY, CLIMATE CHANGE AND SHOPPING

There are many reasons why retail is a challenging business, not least because of disruption from online shopping. But retailers in Japan are having a worse than expected summer for a less than conventional reason: climate change. Tokyo has had an unusually long and cool rainy season and that had led retailers like clothing brand Shiumamura and Right On to report a decline in sales. How is the climate affecting shopping? Analysts say the weather affects stores whose customers tend to commute by bicycle and also depresses demand for summer clothes.

OTHER DEVELOPMENTS:

MASS SHOOTING: Four people have died at a California food festival shooting, including a suspected gunman, police chief Scot Smithee told a news conference late on Sunday (July 28). Fifteen more were injured, including some who suffered gunshot wounds, although the number of those shot was not immediately clear.

BREXIT: Britain is turbo-charging its no-deal Brexit preparations and will be ready to leave the European Union with or without a deal on Oct 31, Foreign Secretary Dominic Raab said on Monday (July 29). Mr Raab, an avowed Brexiter, said the "undemocratic" Irish backstop had to go from the Withdrawal Agreement.

MAHATHIR: Economic Affairs Minister Azmin Ali on Monday (July 29) joined the opposition in calling for Tun Dr Mahathir Mohamad to serve his full term as prime minister. His statement appears to contradict an arrangement within the ruling Pakatan Harapan coalition for Parti Keadilan Rakyat (PKR) president Anwar Ibrahim to take over the reins two years following PH's victory at the polls last year.

OVERSHOOT DAY: Mankind will have used up its allowance of natural resources such as water, soil and clean air for all of 2019 by Monday (July 29), a report said. The so-called Earth Overshoot Day has moved up by two months over the past 20 years, and this year's date is the earliest ever, the study by the Global Footprint Network said.

That’s it for today. Thanks for reading and see you tomorrow.
- Jeremy