As Freedom Left Hong Kong, So Did Hundreds of Billions of Dollars and 100,000 Citizens

(p. B1) This summer, when Hong Kong’s stock market rout seemed to have no end in sight, the city’s financial chief, Paul Chan, jumped into action, creating a task force to inject confidence into a market that was being pummeled by global investors wary of China.

Hong Kong cut taxes on trading, and Mr. Chan went on a roadshow to Europe and the United States, promising measures to “let investors feel optimistic about the outlook.” Investors were anything but sanguine, however, and the city’s stock exchange is among the world’s worst-performing stock markets this year.

. . .

Hundreds of billions of dollars flowed out this year as money managers and pension funds reduced their holdings in Hong Kong, which has long been a gateway for foreign investors wanting to put money into mainland China. The outflows were largely driven by an economic downturn in China and mounting pressure on American investors to sell their (p. B3) exposure to Chinese companies.

. . .

A former British colony, Hong Kong was handed back to China in 1997 with a pledge that it would maintain a high degree of self-governance under a policy called “one country, two systems.” For two decades, this allowed Hong Kong to define itself as unique and distinct from the rest of China, while offering financial access to the world’s second largest economy.

But after citywide protests in 2019, Beijing imposed the national security law, which has silenced political debate and stifled civic activity.

More than 100,000 residents have left Hong Kong over the last few years, in part because of the security law and tough pandemic restrictions. Many young Hong Kong professionals who are still there have expressed a desire to leave, making it a challenge to recruit the talent that has helped the city function as a financial center.

Once a major hub for Wall Street banks, Hong Kong had a drought of initial public offerings this year. Companies raised the lowest amount of money since 2001, resulting in layoffs at financial institutions citywide.

Many international companies have stopped hiring for new positions in Hong Kong. With less money coming into the exchange and fewer transactions, dozens of brokerages have also closed.

For the full story, see:

Alexandra Stevenson. “Hong Kong Stock Market Ends in Loss For 4th Year.” The New York Times (Saturday, December 30, 2023): B1 & B3.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 29, 2023, and has the title “Hong Kong Stocks Plunge to Losses for 4th Straight Year.”)

Communist China’s Restriction of Citizens’ Freedom Shows Its “Fragility”

(p. A8) HONG KONG—Prominent Pro-democracy activist Agnes Chow said she was exiling herself in Canada after getting her passport back from police in return for taking a patriotic trip to China, an exchange that sheds light on Hong Kong’s efforts to re-educate political opponents.

. . .

When Chow returned to Hong Kong, she said, she was instructed to write a letter thanking the police for the trip and enabling her to understand the great development of the motherland.

. . .

“I have never denied China’s economic development,” Chow wrote on Instagram. “But how can such a powerful country send people who fight for democracy to prison, restrict their freedom of movement, and even require them to go to mainland China and visit patriotic exhibitions in exchange for their passports? Is this not a kind of fragility.”

For the full story, see:

Elaine Yu. “Activist Flees Hong Kong After China Trip.” The Wall Street Journal (Tuesday, December 5, 2023): A8.

(Note: ellipses added.)

(Note: the online version of the story was updated Dec. 4, 2023, and has the title “Activist Flees Hong Kong After Re-Education Trip to China.”)

Taxpayer-Financed Transfer Payments Reduced Childhood Poverty 59% in 30 Years from 1993 to 2023

(p. A1) WASHINGTON — For a generation or more, America’s high levels of child poverty set it apart from other rich nations, leaving millions of young people lacking support as basic as food and shelter amid mounting evidence that early hardship leaves children poorer, sicker and less educated as adults.

But with little public notice and accelerating speed, America’s children have become much less poor.

A comprehensive new analysis shows that child poverty has fallen 59 percent since 1993, with need receding on nearly every front. Child poverty has fallen in every state, and it has fallen by about the same degree among children who are white, Black, Hispanic and Asian, living with one parent or two, and in native or immigrant households. Deep poverty, a form of especially severe deprivation, has fallen nearly as much.

In 1993, nearly 28 percent of children were poor, meaning their households lacked the income the government deemed necessary to meet basic needs. By 2019, before temporary pandemic aid drove it even lower, child poverty had fallen to about 11 percent.

More than eight million children remained in poverty, and despite shared progress, Black and Latino children are about three times as likely as white children to be poor. With the poverty line low (about $29,000 for a family of four in a place with typical living costs), many families who escape poverty in the statistical sense still experience hardship.

Still, the sharp retreat of child poverty represents major progress and has drawn surprisingly little notice, even among policy experts.

For the full story, see:

Jason DeParle and Maddie McGarvey. “A Quiet, Dramatic Blow to Childhood Poverty.” The New York Times (Monday, September 12, 2022): A1 & A16-A17.

(Note: the online version of the story has the date Sept. 11, 2022, and has the title “Expanded Safety Net Drives Sharp Drop in Child Poverty.”)

Communists Renege on “Implicit Bargain” to Give Chinese “Stability and Comfort” in Exchange for Lost Freedom

(p. 1) After violently crushing pro-democracy demonstrations at Tiananmen Square in 1989, Beijing struck an implicit bargain: In exchange for limitations on political freedoms, the (p. 9) people would get stability and comfort.

But now the stability and comfort have dwindled, even as the limitations have grown.

. . .

Atop a hill in Shenzhen’s Lianhuashan Park stands a 20-foot bronze statue of Deng Xiaoping. Mr. Deng, the leader who pioneered China’s embrace of market forces after Mao’s death, watches over the city that is a living reminder of the country’s ability to change direction. Mr. Deng is shown in midstride, to honor his credo that opening should only accelerate.

Chen Chengzhi, 80, a retired government cadre who hikes to that statue every day for exercise, credits Mr. Deng with changing his life. Mr. Chen moved to Shenzhen in the 1980s, soon after Mr. Deng allowed economic experimentation here. The city then had just a few hundred thousand people, but Mr. Chen, who had endured famine and the Cultural Revolution, believed in Mr. Deng’s vision.

“At the end of the day, all good things in China are related to Shenzhen,” Mr. Chen said on one of his daily walks, adding that he cheered when China’s premier, Li Keqiang, visited the statue in August and pledged that China would continue opening to the world.

If it doesn’t do so, Mr. Chen said, “China will hit a dead end.”

But Mr. Li is retiring, even as the Xi Jinping era of rising state control stretches on.

For now, Mr. Chen continues climbing the hill — looking over the city that he helped build, that he believes in still.

For the full story, see:

Vivian Wang. “Covid Crackdowns Shake Chinese People’s Faith in Progress.” The New York Times, First Section (Sunday, December 4, 2022): 1 & 9.

(Note: ellipsis added.)

(Note: the online version of the story also has the date December 4, 2022, and has the title “The Chinese Dream, Denied.” The online version says that the title of the print version was “Beijing’s Bargain With Its People Is Shaken” but my National Edition of the print version had the title “Covid Crackdowns Shake Chinese People’s Faith in Progress.”)

Xi’s Communist Assertion of Control of Private Firms Dulls the Entrepreneurial Innovation and “Unbridled Energy That Powered China’s Explosive Growth”

(p. A3) Just a few weeks later, Mr. Xi personally intervened to block the $34 billion initial public offering of one of China’s biggest private firms, Ant Group, partly out of concerns it was too focused on its own profits rather than the state’s goal of controlling financial risk.

The message isn’t lost on entrepreneurs, who are reorienting their businesses to appease the state or giving up on private enterprise altogether.

“For us small businesses, we have no choice but to follow the party,” says Li Jun, a 50-year-old owner of a fish-farming business in the eastern Jiangsu province. “Even so, we’re not benefiting at all from government policies.”

Mr. Li recently closed down a seafood-processing plant because it couldn’t get bank loans—a persistent problem for private firms, despite Beijing’s repeated pledges to make credit more available for them.

The risk for China is that Mr. Xi’s vigorous assertion of statist prerogatives will dull the kind of innovation, competitive spirit and unbridled energy that powered China’s explosive growth in recent decades. The economic policies that helped nurture e-commerce giant Alibaba Group Holding Ltd., tech conglomerate Tencent Holdings Ltd. and other global success stories seem to be at an end, say economists inside and outside China. As a result, they say, Chinese companies are becoming less like American ones, which are driven by market forces and depend on private innovation and consumption.

. . .

In one of the clearest signs of China’s direction, more state firms are gobbling up private companies, redefining a government initiative called “mixed-ownership reform.” The original idea, dating back to the late 1990s, was to encourage private capital to invest in state firms, bringing more private-sector acumen to China’s often-bloated state-owned enterprises.

Now, under Mr. Xi, the process often works the other way around, with big state companies absorbing smaller ones to keep them going, and reconfiguring the smaller firms’ strategies to serve the state.

For the full story, see:

Lingling Wei. “Xi Ramps Up Control of China’s Private Sector.” The Wall Street Journal (Friday, Dec. 11, 2020): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date December 10, 2020, and has the same title as the print version.)

If Regulators Allow, Improved Photosynthesis Can Feed More of the Poor Using Less Land

(p. A13) For decades, scientists have pursued a tantalizing possibility for bolstering food supplies and easing hunger for the world’s poorest: improving photosynthesis, the biological process in plants that sustains nearly all life on Earth.

Now, researchers say that by using genetic modifications to increase the efficiency of photosynthesis, they significantly increased yields in a food crop, soybeans, providing a glimmer of potential that such methods could someday put more food on tables as climate change and other threats make it harder for vulnerable populations across the globe to feed their families.

. . .  Their methods will also have to pass muster with government regulators before crops transformed this way will ever reach farmers’ fields.

. . .

Without major changes to agriculture, governments’ targets for mitigating climate change are at risk, scientists warn. Yet addressing malnutrition and hunger in the short term might require pressing more land and other resources into service, which could accentuate warming.

That is why scientific advancements that could help us produce more nourishment without using more land, whether by improving photosynthesis or otherwise, hold such promise.

. . .

The new research in Illinois focuses on “non-photochemical quenching,” a mechanism in plants that protects them from sun damage. When plants are in bright sunlight, they often receive more light energy than they can use for photosynthesis. This mechanism helps them shed the excess energy harmlessly as heat. But after the plant is shaded again, it doesn’t stop very quickly, which means the plant wastes precious time and energy that could be put toward producing carbohydrates.

The researchers’ genetic transformations help plants adjust more quickly to shade. In multilayered plants like rice, wheat, maize and soy, this extra nimbleness could theoretically increase photosynthesis in the middle layers of leaves, which are constantly flitting between sunlight and shadow during the day.

For the full story, see:

Raymond Zhong and Clare Toeniskoetter. “Researchers Alter Genes To Refine Photosynthesis And Improve Crop’s Yield.” The New York Times (Friday, August 19, 2022): A13.

(Note: ellipses added.)

(Note: the online version of the story has the date Aug. 18, 2022, and has the title “Scientists Boost Crop Performance by Engineering a Better Leaf.”)

Exponential Growth Is Not Inevitable and Has Seldom Occurred Outside of Computer Chips

(p. C5) Nothing has affected, and warped, modern thinking about the pace of technological invention more than the rapid exponential advances of solid-state electronics. The conviction that we have left the age of gradual growth behind began with our ability to crowd ever more components onto a silicon wafer, a process captured by Gordon Moore’s now-famous law that initially ordained a doubling every 18 months, later adjusted to about two years.

. . .

Bestselling tech prophets like Ray Kurzweil and Yuval Noah Harari argue that exponential growth will allow us to disrupt our way into a future devoid of disease and misery and abounding in material riches.

. . .

The problem is that the post-1970 ascent of electronic architecture and performance has no counterpart in other aspects of our lives. Exponential growth has not taken place in the fundamental economic activities on which modern civilization depends for its survival—agriculture, energy production, transportation and large engineering projects. Nor do we see rapid improvements in areas that directly affect health and quality of life, such as new drug discoveries and gains in longevity.

. . .

The conclusion that progress is not accelerating in the most fundamental human activities is supported by a paper published in 2020 by the National Bureau of Economic Research. The authors, four American economists led by Bryan Kelly of the Yale School of Management, studied innovation across American industries from 1840 to 2010, using textual analysis of patent documents to construct indexes of long-term change. They found that the wave of breakthrough patents in furniture, textiles, apparel, transportation, metal, wood, paper, printing and construction all peaked before 1900. Mining, coal, petroleum, electrical equipment, rubber and plastics had their innovative peaks before 1950. The only industrial sectors with post-1970 peaks have been agriculture (dominated by genetically modified organisms), medical equipment and, of course, computers and electronics.

For the full essay, see:

Vaclav Smil. “Tech Progress Is Slowing Down.” The Wall Street Journal (Saturday, Feb. 18, 2023): C5.

(Note: ellipses added.)

(Note: the online version of the essay has the date February 16, 2023, and has the same title as the print version.)

The essay quoted above is adapted from Smil’s book:

Smil, Vaclav. Invention and Innovation: A Brief History of Hype and Failure. Cambridge, MA: The MIT Press, 2023.

“An Inalienable Right to Sit In AC”

(p. C4) “Let’s sit in AC.” An American friend of mine, recently living in Mumbai, was wildly amused to hear this said in that steamy megalopolis, as if retreating to the tantalizing cool of an air-conditioned room were an activity in itself.

It took me a moment to see what he found so funny. I had grown up with the deprivations of socialist India in the 1980s. I was hardwired to fetishize air-conditioning. It was not an adjunct to life, sewn seamlessly into our daily routines, as it is in the U.S., where 82.7 million homes have central AC. It was, as the philosopher Immanuel Kant would say, the “thing-in-itself,” and to sit “in” AC was something of a national pastime.

. . .

Our first AC was an unbranded gimcrack contraption, jerry-built by a local electrician, but—my god!—how we loved it.

. . .

India loves to assert the demands of belonging through pacts of mutual suffering, and to be in AC was almost to be a little less Indian, as if you had decamped for the West. Even now that the country is the world’s fastest growing market for air-conditioners—projected by the International Energy Agency to be the biggest by 2050—the first line of attack from your average troll is: “What do you know of the realities of India, sitting in AC?”

. . .

. . . this summer, as newspapers report the hottest temperatures ever recorded on Earth and Amazon blasts me with discounts on their best-selling ACs, I cannot help feeling that our turn has come at a bad time. If nothing is done to make air-conditioning more energy-efficient, India alone is projected to use 30 times more electricity in 2030 than it did in 2010. Globally, air conditioning is projected to account for 40% of the growth in energy consumption in buildings by 2050—the equivalent of all the electricity used today in the U.S. and Germany combined. It’s enough to send a chill down the spine of the most ardent of AC evangelists.

The irony of a world made hotter by our need to be cool strikes some as proof of our rapacity. To me, having grown up in the place where so much of the new demand is coming from, I see it as part of a necessary realignment. As the global south gets richer, it will act as a frontier and laboratory. My hope is that it will achieve a miraculous breakthrough in energy efficiency, even as it asserts an inalienable right to sit in AC.

For the full commentary, see:

Aatish Taseer. “My Love Affair With Air- Conditioning.” The Wall Street Journal (Saturday, July 15, 2023): C4.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 14, 2023, and has the same title as the print version.)

Chinese Communists Suspend Release of Record High Youth Unemployment Rate

(p. B1) The Chinese government, facing an expected seventh consecutive monthly increase in youth unemployment, said Tuesday [Aug. 15, 2023] that it had instead suspended release of the information.

The unemployment rate among 16- to 24-year-olds in urban areas hit 21.3 percent, a record, in June and has risen every month this year. It was widely forecast by economists to have climbed further last month.

The decision to scrub a widely watched report could exacerbate the concerns expressed by investors and executives who say ever-tightening government control of information is making it harder to do business in China.

Fu Linghui, a spokesman of the National Bureau of Statistics, said at a news briefing that the government would stop making public employment information “for youth and other age groups.” He said the surveys that government researchers use to collect the data “need to be further improved and optimized.”

China’s youth unemployment rate has doubled in the last four years, a period of economic volatility induced by the “zero Covid” measures imposed by Beijing that left companies wary of hiring, interrupted education for many students, and made it hard to get the internships that had often led to job offers.

The announcement drew more than 140 million views on the Chinese social media site Weibo within a few hours. Many people (p. B3) commenting online, some turning to sarcasm, said they believed the government suspended the report to try to hide negative information. Others said they believed the public had the right to be informed.

. . .

Young people in China are facing a big gap between labor demand and supply. According to official data, 11.6 million students were expected to graduate college or university this year — the most ever and nearly one million more than last year. Future classes are expected to be even larger, while economic growth had started to slow even before the pandemic.

. . .

Even becoming an entry-level civil servant working for the government is harder these days. Last year, a record 2.6 million people applied to take the national civil service exam to compete for only 37,100 entry-level positions.

Xi Jinping, the country’s top leader, has called for young people to go to remote areas to find work — to “eat bitterness,” a Chinese expression that refers to enduring hardship.

For the full story, see:

Claire Fu. “China Scraps Jobs Report On the Young.” The New York Times (Wednsday, August 16 2023): B1 & B3.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the review has the date Aug. 15, 2023, and has the title “China Suspends Report on Youth Unemployment, Which Was at a Record High.”)

Less Fire on World’s Land Since Early 2000s

(p. A15) One of the most common tropes in our increasingly alarmist climate debate is that global warming has set the world on fire. But it hasn’t. For more than two decades, satellites have recorded fires across the planet’s surface. The data are unequivocal: Since the early 2000s, when 3% of the world’s land caught fire, the area burned annually has trended downward.

In 2022, the last year for which there are complete data, the world hit a new record-low of 2.2% burned area. Yet you’ll struggle to find that reported anywhere.

. . .

This summer, the focus has been on Canada’s wildfires, the smoke from which covered large parts of the Northeastern U.S. Both the Canadian prime minister and the White House have blamed climate change.

. . .

In the case of American fires, most of the problem is bad land management. A century of fire suppression has left more fuel for stronger fires. Even so, last year U.S. fires burned less than one-fifth of the average burn in the 1930s and likely only one-tenth of what caught fire in the early 20th century.

When reading headlines about fires, remember the other climate scare tactics that proved duds. Polar bears were once the poster cubs for climate action, yet are now estimated to be more populous than at any time in the past half-century. We were told climate change would produce more hurricanes, yet satellite data shows that the number of hurricanes globally since 1980 has trended slightly downward.

. . .

Surveys repeatedly show that most voters are unwilling to support the very expensive climate policies activists and green politicians have proposed. Overheated headlines about climate Armageddon are an attempt to scare us into supporting them anyway, at the cost of sensible discussion and debate.

For the full commentary, see:

Bjorn Lomborg “Climate Change Hasn’t Set the World on Fire.” The Wall Street Journal (Tuesday, Aug. 1, 2023): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 31, 2023, and has the same title as the print version.)

Average Wages in Boom Towns Would Rise “Astounding” $8,775 If Zoning Laws Eased

(p. A13) Though some might expect areas populated by conservatives to be the most exclusionary, it is areas where highly educated liberals live that engage in the worst forms of economically exclusionary housing policy. Researchers writing in the Journal of Experimental Social Psychology in 2018 found that highly educated Americans have comparatively tolerant racial attitudes but hold “negative attitudes toward the less educated.” Americans with different levels of education all have biases, they wrote, but “the targets of prejudice are different.”

Exclusionary housing practices are a linchpin in the architecture of educational inequality in America. Because 73% of American school children attend neighborhood public schools, where you live typically determines the quality of schooling. Most people who are concerned about improving education naturally focus attention on what school boards and state education officials do, but it’s at least as important to focus on what the local and state officials running housing policy are up to.

For sixty years, researchers have found that the economic segregation of students. which is driven by housing policy, shapes educational opportunity even more powerfully than per pupil spending. In Montgomery County Maryland, for example, county officials pursued two strategies for raising the achievement of low-income students. In one program, starting in 2000, the school board spent $2,000 extra per pupil in high-poverty schools. In another, begun decades earlier, the county council enacted an “inclusionary zoning” law that to this day requires builders to set aside a portion of new developments for low-income families. Over time, as Heather Schwartz of RAND found in a 2010 study, what the housing authority did for students cut the math achievement gap between low-income and middle-class students in half, while the school board’s program had much less impact.

Zoning-induced housing costs also prevent workers from moving to places where they can make the highest wages, which is typically in coastal cities. Research shows that this barrier to mobility gravely damages American economic productivity, to say nothing of the aspirations of individuals and families. A 2018 study by Edward Glaeser and Joseph Gyourko, for example, found that “restrictive residential land-use regulation” had a price tag of “at least 2% of national output,” or about $400 billion. A 2019 study by Chang-Tai Hsieh and Enrico Moretti, found that if three high-productivity cities—New York, San Jose and San Francisco—relaxed restrictions on housing supply, more workers could move to them, and average wages nationally would rise an astounding $8,775.

When people do move to higher-wage regions, exclusionary zoning laws often force them to live in the far reaches of metropolitan areas. This means longer commutes, which are associated with higher blood pressure and divorce rates, and more miles on the road, which is bad for the environment.

For the full essay, see:

Richard D. Kahlenberg. “Only Zoning Reform Can Solve America’s Housing Crisis.” The Wall Street Journal (Saturday, June 24, 2023): A13.

(Note: the online version of the essay has the date June 22, 2023, and has the same title as the print version. The sentences in the penultimate paragraph quoted above (mentioning 2018 and 2019 papers) appear in the online, but not in the print, version of the essay.)

The essay quoted above is adapted from the book:

Kahlenberg, Richard D. Excluded: How Snob Zoning, Nimbyism, and Class Bias Build the Walls We Don’t. New York: PublicAffairs, 2023.