China: West stoking Hong Kong protests to undermine development


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Western politicians are stirring up unrest in Hong Kong, hoping to create obstacles to China's development, a Chinese official said on Monday.

Yang Guang, a spokesman for the Cabinet’s Hong Kong and Macao Affairs Office, said such attempts would come to nothing because Beijing would tolerate no outside interference in the affairs of the former British colony, which has been wracked by nearly two months of pro-democracy protests.

China threw its backing behind Hong Kong's beleaguered leader Carrie Lam and the police, saying violent protesters must be swiftly punished.

While China has issued increasingly shrill condemnations of the protests in the last two weeks, it has largely left the city's pro-Beijing administration to deal with the situation.

Protesters had braced for a potential backlash from Beijing after China's top policy body on Hong Kong affairs called a rare news briefing on Monday.

But the Cabinet-level Hong Kong and Macau Affairs Office merely repeated its condemnation of the protests and Beijing's "strong" support for Hong Kong chief executive Carrie Lam and the city's police force, which has been accused of using excessive force against protesters.

"No civilised society or rule of law society will tolerate rampant violence," Mr Yang told reporters.

Mr Yang said the violence, which he blamed on a "few radicals", had seriously undermined Hong Kong's prosperity and stability, and "bumped into the bottom line" of the "one country, two systems" principle that governs the financial hub.

Mr Yang said that some people in the West applied "strange logic" that prompted them to be sympathetic and tolerant to "violent crimes" while criticising the police force's "due diligence".

"At the end of the day, their intention is to create trouble in Hong Kong, make Hong Kong a problem to China, in order to contain China's development," Mr Yang said, without mentioning any specific people or countries behind the "irresponsible remarks".

The protests in the semi-autonomous Chinese territory began in early June as a call to withdraw an extradition bill that would have allowed people in Hong Kong to be sent to mainland China to stand trial.

Another spokeswoman, Xu Luying, said Beijing believed "Hong Kong's top priority task right now is to punish violent and unlawful acts in accordance with the law, to restore social order as soon as possible, and to maintain a good business environment".

Last week, the defence ministry pointed to a Hong Kong law under which the Chinese army could be used if the city authorities requested support to maintain "public order". When asked under which preconditions the military could be deployed, Mr Yang referred to the city's basic law, without elaborating.

In an editorial on Monday, the state-run China Daily newspaper signalled Beijing's growing concern.

"What is happening in Hong Kong is no longer the airing of real or imagined grievances," the editorial read.

"It is of the same hue as the colour revolutions that were instigated in the Middle East and North Africa – local anti-government elements colluding with external forces to topple governments utilising modern communication technology to spread rumours, distrust and fear."

Since the government indefinitely suspended the legislation, demonstrators have broadened their demands to include greater democracy and government accountability.

Pro-democracy protesters fought a second consecutive day of running battles with police on Sunday evening in a well-heeled residential district of Hong Kong, in some of the most sustained scenes of violence so far.

The clashes took place close to the Liaison Office, which represents Beijing in the semi-autonomous territory.

Early on Monday, police said 49 "radical protesters" had been arrested for a variety of offences on Sunday.

Police said protesters hurled bricks, bottles, paint bombs, corrosive liquids and used a crossbow to fire metal ball bearings. Bows and arrows were also later recovered from the scene, the force said.

Volleys of tear gas and rubber bullets arced through the air to clear the streets, with elite units known as "Raptor" squads arresting those left behind, almost all of them young men and women.

Medical authorities said 16 people were injured.

Sunday's violence came a day after police fired tear gas and rubber bullets at protesters holding a banned rally against suspected pro-government Triad gangs in a town near the border with mainland China. Police arrested 13 people that day while hospital authorities said 24 people were hurt, two seriously.

The gangs had beaten pro-democracy demonstrators there the previous weekend, with at least 45 people taken to hospital.

Despite facing unprecedented levels of public anger and millions taking to the streets, the city's leaders have appeared unable, or unwilling, to end the chaos.

In a direct challenge to Beijing, the protesters have seized opportunities to deface symbols of China's sovereignty over Hong Kong.

Pro-democracy lawmaker Claudia Mo said the city was now trapped in a "vicious cycle" where huge peaceful marches that have been ignored by the government end with violence between police and small groups of hardcore protesters.

"You see force being escalated on both sides. But then this is a huge imbalance because the police are in possession of deadly weapons. This sums up Hong Kong today," she said.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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