4 December 2018

Katie Stanton

4 December 2018

Good morning,

As Christmas approaches and the accompanying mess accumulates – pine needles cover the floor, gifts are stashed in every conceivable crevice and someone’s inevitable attempt at candle-making is now face down on the carpet – you’re probably very familiar with a clean-up job.

And while I’m sure the cleaning regime in your household is exemplary, Hong Kong’s executives are facing repercussions after years of sweeping their problems under the rug.

Beijing is tightening its grip over Hong Kong – a city granted a “high degree of autonomy and civic freedoms” when it was handed back to China by the British in 1997 – and activists, civil society and dissent are increasingly being stifled.

Until now, the government has faced little reproach from business. Executives turn a blind eye as Beijing quietly infiltrates political life, imposing its “comprehensive jurisdiction” over Hong Kong and blocking opposition with inconspicuous vigilance.

However, the decision to expel Victor Mallet, the Asia news editor for the Financial Times, has finally caused a stir. The government refused to renew his work visa, before denying him entry to the city after he hosted a talk at the city’s Foreign Correspondents’ Club by Andy Chan, a prominent independence advocate. 

Suddenly, executives are waking up to the possibility of a city devoid of the freedoms and autonomy that helped make it such a success. With continued influence from Beijing, Hong Kong could lose its preferential access to global markets, a status conditional on the maintenance of its “high degree of autonomy”.

And the possibility of impending Chinese control is not confined to Hong Kong. The head of MI6, Alex Younger, warned at a talk in St Andrews yesterday of the potential security threat posed by Chinese telecoms giant Huawei if it becomes instrumental in Britain’s “next-generation mobile network”. Beijing’s aim is to become the dominant player in emerging technologies by 2049. But Younger warned of China’s “different legal and ethical framework. They are able to use and manipulate data sets on a scale that we can only dream of.”

Meanwhile, China reported its slowest quarterly growth figures in October amid a backdrop of tariffs and trade talks that have sullied its economic success story in recent months. A 90-day truce in US trade talks has provided some relief, but there is no “magic wand” to settle grievances and the US remains sceptical of the country’s weak intellectual property rights and lack of regulatory transparency, among other things.  

Across the world, key players are becoming more mindful of Beijing’s intentions. Hong Kong’s world leading financial centre – and indeed the international community – has for a long time been sweeping crumbs under the fridge and crossing their fingers that they don’t get mice. Perhaps now we have reached a turning point for the city; an opportunity to oppose its oppressors, to choose between a thriving civil society with vast economic success and an increasingly stifling Chinese regime.

News

An advocate general from the European Court of Justice has said that the UK can halt Brexit by unilaterally revoking Article 50. Manuel Campos Sanchez-Bordona published his legal opinion on the case – which is not binding – ahead of a judgment by the court at a later date. The news comes a week after the case was heard at the European Court of Justice after being referred by Scotland’s highest civil court, the Court of Session. It is thought that this could pave the way for a 'People’s Vote', although legal representatives for the UK Government believe the case is inadmissible as it deals with a hypothetical situation.

The Speaker of the House of Commons, John Bercow, warned last night that the UK government may have been in breach of parliamentary rules by not publishing the full Brexit legal advice. In his view, there is an “arguable case” that a contempt of parliament has taken place. MPs will therefore debate and vote today on whether to refer the case to the standards committee. Theresa May insists that publishing the confidential advice is not in the national interest.

Transport secretary Chris Grayling should accept personal responsibility for the rail crisis which brought misery to millions of commuters over the summer, according to a group of MPs. A cross-party committee found that Grayling was at “the apex” of the system and had the power to put a stop to changes. An interim inquiry led by the Office of Rail and Road previously found that “nobody took charge” of the crisis. (£)

The first inaugural winner of the female Ballon d’Or has been invited to celebrate on stage with a sexually suggestive dance. Ada Hegerberg earned the award for a stellar year during which she scored in the Champions League final and helped her club Lyon to win the French title. But these accomplishments were somewhat overshadowed when presenter and DJ Martin Solveig asked Ms Hegerberg if she “knew how to twerk”, to which she responded simply: “no”.

Business & Economy

Altria, the maker of Malboro cigarettes, is in talks with a Canadian cannabis producer over a potential investment. No agreement has been reached as of yet, but the potential collaboration comes after speculation that Altria was in talks to acquire Cronos Group in an effort to diversify its customer base from traditional smokers. Several other companies are pushing into the marijuana market following its legalisation in Canada earlier this year.

GlaxoSmithKline (GSK) has struck a deal to buy Tesaro, an American cancer drug specialist. In a surprise acquisition that unnerved investors, GSK said it had agreed to pay $75 per share – more than double the Nasdaq-listed company’s 30-day average price in New York. The move highlights chief executive Emma Walmsley’s determination to build GSK’s presence in the already crowded oncology sector. (£)

In its third bailout of the year, Crossrail will demand “hundreds of millions” of pounds from the government, according to sources familiar with the crisis-struck project. The news comes as controversy mounts over whether Sadiq Khan, mayor of London, misled the public over delays and cost overruns. (£)

Markets

What happened yesterday?

The FTSE 100 ended 1.1% higher yesterday at 7,062.41 following a very strong start to the day. Similarly, the US Dow Jones Industrial Average jumped by 1.64% after US president Donald Trump and China’s president Xi Jinping agreed a truce on the trade war during the G20 summit over the weekend.

The market increase was particularly prominent in technology and automotive stocks, as the threat of tariffs eased and President Trump eluded to cuts to tariffs on auto imports on Twitter, although Beijing has not confirmed the measure. Big US car companies saw the benefits, with Ford’s stock up 2.8% and General Motors up 1.8%. German car makers also made gains across the sector. Technology stocks rallied, with Apple rising 2.3% and Amazon up by 4.3%.

Likewise, China’s CSI 300 index saw strong gains after being the hardest hit by “trade jitters”, although longer term implications of the truce remain unclear.

In currencies, the pound fell slightly below the dollar, settling at $1.27, a 0.19% drop. It was also down 0.6% against the euro at €1.12.

Finals
Glencore Group
ITE Group
Ixico
Victrex plc

Interims
Collagen Solutions
Consort Medical 
Discoverie Group
Iomart Group
Mind Gym
Northgate
Park Group
Tekmar Group
Vianet Group 
WYG

Trading Announcements         
IG Group Holdings

AGMs
City Natural Resources High Yield Trust
DX (Group)
Greatland Gold
London Finance & Investment Group
Ruffer Investment Company Ltd Red PTG Pref Shares

UK Economic Announcements
(09.30) PMI Construction

Intl. Economic Announcements
(10:00) Producer Price Index (EU

Columns of interest

Wolfgang Münchau gives an interesting perspective in the Financial Times on why Europe will never be a top-tier geopolitical power. While the EU has had its share of successes, he argues it has lost out on opportunities, including in technological leadership. Although Europe is still the centre of global car manufacturing, China makes the batteries and the US makes the artificial intelligence – both technologies of the future. (£)

Jonathan Miller argues in The Spectator that Emmanuel Macron has united France against him this week. Only a few weeks ago Macron was pledging a red carpet for bankers escaping the Brexit turmoil, now it looks like “the carpet has become one of broken glass”. While he may be an academic triumph, his arrogant detachment from the French public has inspired the country to unite in riots in search of national renewal. (£)

Did you know?

English language has more words borrowed from Hawaiian than from Welsh.

Parliamentary highlights

TODAY

House of Commons
Oral questions
Foreign and Commonwealth Office (including Topical Questions)
 
Ten Minute Rule Motion
Planning (Appeals) – John Howell
 
Motion
Proceedings on a Business Motion relating to Section 13 (1)(b) of the European Union (Withdrawal) Act 2018
 
Debate
Section 13 (1)(b) of the European Union (Withdrawal) Act 2018 (Day 1)
 
Adjournment
Health technology assessment charges in England – Anne Marie Morris

House of Lords
Introduction(s)
Baroness Osamor
 
Oral questions
Requirements for rail franchise agreements for operators to provide information, assistance and support to passengers when trains do not arrive, or terminate before reaching their final destinations - Lord Greaves
 
Regulation in the tourism sector. - Baroness Doocey
 
Financial and other resources available to the UK Council for Internet Safety - Baroness Benjamin
 
Proposals from some local authorities to set targets for accessible or adaptable new build houses - Lord Beecham
 
Legislation
Financial Services (Implementation of Legislation) Bill [HL] - Second reading - Lord Bates
 
Orders and regulations
Social Security (Amendment) (EU Exit) Regulations 2018 - Baroness Buscombe
 
Social Security (Amendment) (Northern Ireland) (EU Exit) Regulations 2018 - Baroness Buscombe
 
Competition (Amendment etc.) (EU Exit) Regulations 2019 - Lord Henley
 
Postal and Parcel Services (Amendment etc.) (EU Exit) Regulations 2018 - Lord Henley
 
Tobacco Products and Nicotine Inhaling Products (Amendment etc.) (EU Exit) Regulations 2018 - Lord O'Shaughnessy
 
Scottish Parliament
Topical Questions (if selected)
 
Public Petitions Committee debate
PE1463 on thyroid and adrenal testing, diagnosis and treatment
 
Scottish Government Debate
A Strategy for our Veterans – taking it forward in Scotland
 
Counter-Terrorism and Border Security Bill
UK Legislation
 
Committee Announcements
 
Members’ Business
Report of Autistic Children’s Experiences of School – Daniel Johnson

TOMORROW

House of Commons

Oral questions
Wales

Prime Minister's Question Time

Ten Minute Rule Motion
Immigration (Time Limit on Deportations) - Tulip Siddiq

Debate
Section 13 (1)(b) of the European Union (Withdrawal) Act 2018 (Day 2)

Adjournment
South Western Railway franchise - Sir Vince Cable

House of Lords

Debate
The negotiated withdrawal agreement laid before the House on Monday 26 November 2018 with the title ‘Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community’ and the framework for the future relationship laid before the House on Monday 26 November 2018 with the title ‘Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom’ (day 1) - Baroness Evans of Bowes Park

‘Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community’ - motion to regret (day 1) - Baroness Smith of Basildon

Oral questions
Resources for reconstruction programmes in Syria - Baroness D'Souza

Public awareness of health impacts of diesel fuel emissions - Baroness Randerson

What is the basis in statute for the offence of religious hate speech - Lord Pearson of Rannoch

Encouraging oil and gas companies to link executive pay to carbon emission reduction targets - The Lord Bishop of St Albans

Scottish Parliament
Portfolio questions
Education and Skills

Scottish Government Debate
Protecting Our Interest: Scotland's Response to the UK Government and EU's Withdrawal Agreement and Political Declaration

Members' Business
Remembering Conscientious Objectors - Alison Johnstone