China’s Struggles
CEO Daily lands late this morning, as your correspondent has just landed back in Hong Kong from China’s Yunnan province.
The three hour flight involved swapping Faustian bargains: cool alpine breezes and blocked Internet access at one end versus oppressive humidity and unrestricted Internet access at the other.
At the Hong Kong airport, it was smooth sailing despite reports that anti-government protestors planned to shut the whole place down. Demonstrators had threatened to infiltrate the airport by forging travel documents and dressing to blend in with ordinary travelers. But as the Fortune team exited tonight there were no signs of trouble—perhaps reflecting the huge police presence around the transport hub.
Our return follows fierce clashes between police and protestors Friday in Hong Kong’s Mong Kok shopping district. Those skirmishes suggest demonstrators aren’t buying Hong Kong chief executive Carrie Lam’s attempt to ease tensions by announcing Wednesday that her government will withdraw a controversial bill allowing criminals arrested in Hong Kong to be extradited to China’s mainland.
Continued protest would be bad news for Hong Kong’s beleaguered economy, which took a further hit Friday when Fitch Ratings downgraded the territory’s credit rating, citing the erosion of Hong Kong’s autonomy from the mainland.
The big riddle for Hong Kong is how Chinese leader Xi Jinping intends to deal with unrest in the territory. On Friday, Chinese premier Li Keqiang bristled at a suggestion by German chancellor Angela Merkel, during a visit to Beijing, that China should do its “utmost” to avoid violence in Hong Kong. “Chinese people have the capability and wisdom to manage well our own affairs,” Li said. His comments were widely interpreted as a signal to foreign governments to mind their own business.
Xi has yet to comment directly on the situation in Hong Kong. But in recent speeches he has revived the rhetoric of revolutionary leader Mao Zedong in emphasizing the idea of long-term sacrifice and “struggle.”
More China news below.
Clay Chandler
– Clay.Chandler@Fortune.com
– @claychandler