Friday, May 29, 2020

Heated Protests Against Police Killing Unarmed Black People Spread Across The Country Last Night

Protesters enraged over two unarmed black people killed by police led to a Minneapolis precinct being stormed and the activation of the national guard.

Ikran DahirBuzzFeed News Reporter

Ade OnibadaBuzzFeed News Reporter

Last updated on May 29, 2020

There were heated protests around the US on Thursday night in response to acts of police brutality that killed an unarmed black man in Minneapolis and an unarmed black woman in Kentucky.

Hundreds swarmed the streets of Minneapolis for a third day of protests against the death of George Floyd, a black man who died after a police officer used a knee chokehold on his neck as he repeatedly pleaded, "I can't breathe." Experts told BuzzFeed News the tactic was unacceptable and unjustified, and should be banned.

Protesters clashed with police in the southern Minneapolis area, breaching the Third Precinct headquarters and setting the building on fire. Police had vacated the building by 10 p.m. on an order from Minneapolis Mayor Jacob Frey.

The City of Minneapolis Twitter account urged people to move away from the area, citing "unconfirmed reports" of cut gas lines and explosives in the building.

Fireworks were set off in the background as the precinct burned.

Fireworks shooting into the sky as the MPD Third Precinct burns. @kare11

Police also arrested CNN correspondent Omar Jimenez, who is black and Latino, and his crew while they covered the protest in Minneapolis. The network said in a statement that the arrests "a clear violation of [the crew's] First Amendment right."

CNN staff have said their white reporter Josh Campbell was the only one not arrested. Campbell said after identifying himself to police, they told him he was permitted to be in the area.

Jimenez and his crew have since been released from custody.

Minnesota police arrest CNN reporter and camera crew as they report from protests in Minneapolis https://t.co/oZdqBti776

President Donald Trump tweeted about the Minneapolis protests in the early hours of Friday, calling Frey to "bring the City under control, or I will send in the National Guard & get the job done right."

He also called protesters "thugs" and threatened to shoot looters in a subsequent tweet that sparked widespread condemnation. Twitter later labeled the tweet for violating the platform's rules about glorifying violence.

In nearby St. Paul, police fired tear gas at protesters during similarly tense demonstrations, and businesses were looted and police cars damaged.

In a statement urging calm, Mayor Melvin Carter said, “For all of us who lament the death of Mr. Floyd, for all of us whose fathers, whose sons, whose nephews, whose selves that could have been, our demand has to be that we take this energy and channel it towards helping prevent something like that from ever happening again."

The Minnesota National Guard was deployed to both Minneapolis and St. Paul Thursday.

Hundreds of miles away, in Louisville, Kentucky, demonstrators gathered to protest the death of Breonna Taylor, a 26-year-old black woman who was fatally shot in her home by police officers on March 13. Her death is being investigated by the FBI.

Louisville police say that seven people were shot during the demonstration, including at least one person who was described as being in critical condition. The shooting did not involve police, but occurred within the protests.

“We know that there were several hours of peaceful protest before some of the crowd turned violent,” said Louisville mayor Greg Fischer. He clarified that two of the individuals who had been shot had required surgery but the remaining five were in “good condition.”

Scenes from the demonstration captured the moment protestors attempted to overturn a police transport vehicle before the sound of gunshots dispersed the crowd causing a frenzy.

At the height of the protest, Fischer shared a message online said to have been from a member of Taylor’s family, calling for protesters to refrain from violence.

The unidentified woman thanked protestors for their support: “Louisville, thank you so much for saying Breonna’s name tonight. We are not going to stop until we get justice, but we should stop tonight before people get hurt. Please go home, be safe and be ready to keep fighting.”

A message from Breonna Taylor’s family urging protestors to be peaceful, go home and keep fighting for truth.

Louisville Metro PD Special Adviser Jessica Halliday said at a virtual press conference that the chaos on Thursday night shows the "obvious frustration of the tension between police and residents."

Halliday said police have been using "great restraint" in their response to protesters, but that property was being damaged and officers were having bottles thrown at them.

"We are asking people to please help us stop this and bring a peaceful resolution for the rest of the night," she said."

Protests against Floyd and Taylor's death spilled out of Minneapolis and Louisville into major cities across the country.

In Denver, protesters rallied outside the Colorado State Capital Building demanding justice for victims of police brutality. The sound of gunfire rang out at one point, though Denver police said there were no reports of injuries at the time.

Video of a woman driving through a crowd of protesters in downtown Denver, then swerving right and narrowly swiping a man with her car also went viral.

Anabel Escobar, the protester who filmed the incident, told BuzzFeed News the woman driving the car was trying to get out of a line of cars on a closed street.

"When she started moving, protesters moved towards her car to not let her pass. She continued to accelerate into the group of people," Escobar said. When the man on the car jumped off and walked back to the crowd, "Instead of driving forward to get out, she made a hard right to come back towards the protestors and hit the guy."

Downtown denver. Some girl turned around to run this guy over #GeorgeFloyd #icantbreathe #downtowndenver #denver

In New York City, at least 70 people were arrested after police and protesters clashed.

A Black CNN Reporter And His Crew Were Arrested Live On Air At The Minneapolis Protests

The three people, who repeatedly identified themselves as members of the media, were later released after the governor intervened.

Julia Reinstein BuzzFeed News Reporter
May 29, 2020,

CNN

A black CNN reporter and two members of his production team were arrested live on air early Friday morning in Minneapolis while covering the heated protests sparked by the police killing of another black man, George Floyd, in the city on Monday.

In video of the moment before the arrest, reporter Omar Jimenez can be heard complying with officers and asking where police would like them to stand.

"Put us back where you want us," Jimenez told the officers. "We are getting out your way, so just let us know. Wherever you want us, we will go."

Jimenez then continued reporting describing the scene, until two officers handcuffed him and told him he was under arrest.

"Why am I under arrest, sir?" Jimenez asked the officers, before they led him away.

CNN @CNN
Minnesota police arrest CNN reporter and camera crew as they report from protests in Minneapolis https://t.co/oZdqBti77610:26 AM - 29 May 2020
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"You’re arresting him live on CNN. We told you before that we are with CNN," a member of the production team said.

The team continued to report, saying that Jimenez "clearly identified himself as a reporter" and "was respectfully explaining to the state police that our CNN team was there and moving away as they would request."

The police then arrested the crew members, who placed the camera on the ground in order to continue broadcasting live.

CNN identified them as producer Bill Kirkos and photojournalist Leonel Mendez.

CNN Communications @CNNPR

A CNN reporter & his production team were arrested this morning in Minneapolis for doing their jobs, despite identifying themselves - a clear violation of their First Amendment rights. The authorities in Minnesota, incl. the Governor, must release the 3 CNN employees immediately.10:51 AM - 29 May 2020
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On Twitter, CNN confirmed the arrests, which it called "a clear violation of their First Amendment rights" and called for them to be immediately released.

Minnesota Gov. Tim Walz apologized to CNN president Jeff Zucker, saying he "accepts full responsibility" and was working to have the team released.

"It was totally unacceptable and totally inadvertent what happened. They clearly had the right to be there, the CNN team," Walz said in a statement, which was read live on air.

Less than an hour later, CNN tweeted that they had been released from custody.

Minnesota State Patrol confirmed the three arrests on Twitter, stating that they were "released once they were confirmed to be members of the media."

MN State Patrol @MnDPS_MSP
In the course of clearing the streets and restoring order at Lake Street and Snelling Avenue, four people were arrested by State Patrol troopers, including three members of a CNN crew. The three were released once they were confirmed to be members of the media.12:00 PM - 29 May 2020
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But CNN tweeted that the police statement was "not accurate."

"Our CNN crew identified themselves, on live television, immediately as journalists," the network tweeted.

Hours after he was released, Jimenez was back on the air. He said the arrest "definitely was nerve-wracking at certain points," but that "the one thing that gave me a little bit of comfort was that it happened on live TV."

"You don’t have to doubt my story. It’s not filtered in any sort of way," Jimenez said. "You saw it for your own eyes, and that gave me a little bit of comfort."

Joe Biden @JoeBiden
This is not abstract: a black reporter was arrested while doing his job this morning, while the white police officer who killed George Floyd remains free. I am glad swift action was taken, but this, to me, says everything.02:04 PM - 29 May 2020
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Joe Biden, the presumptive Democratic nominee for president, criticized the arrest in a tweet and said he was glad Jimenez was swiftly released.

"This is not abstract: a black reporter was arrested while doing his job this morning, while the white police officer who killed George Floyd remains free," Biden said.

Following the arrests, CNN reporter Josh Campbell, who is white, said on air that he "was treated much differently" by police while covering the same protests in the same area.

"My experience has been the opposite of what Omar just experienced there," Campbell said.

The National Association of Black Journalists condemned the arrest, with its president, Dorothy Tucker, calling it "unfathomable and upsetting to witness this structural racism in real time."

"We are relieved to see Omar has been released, but we are still disturbed by the apparent violation of First Amendment rights that are the bedrock of journalism," Tucker said.

May 29, 2020, at 8:19 a.m.

Correction: Omar Jimenez's name was misspelled in an earlier version of this post.

Twitter adds ‘glorifying violence’ label on Donald Trump’s Minneapolis tweet

Twitter placed a ‘public interest notice’ on the tweet about protests in Minneapolis over the death of George Floyd at the hands of the police

Earlier, Trump lashed out at Twitter and signed an executive order seeking to strip social media giants of legal immunity for content on their platforms

Agence France-Presse, 29 May, 2020

US President Donald Trump. Photo: Bloomberg

Twitter concealed one of
Donald Trump’s tweets on Friday for “glorifying violence,” ramping up a dispute with the US president who says social media companies censor conservative voices like his.
In a move bound to infuriate one of the platform’s most followed users, Twitter said it was placing a “public interest notice” on a Trump tweet about
violent protests in Minneapolis over the death of an unarmed black man at the hands of the police.

In a late night tweet, Trump wrote: “These THUGS are dishonouring the memory of George Floyd, and I won’t let that happen. Just spoke to Governor Tim Walz and told him that the Military is with him all the way. Any difficulty and we will assume control but, when the looting starts, the shooting starts. Thank you!”

Hours later, the micro-messaging platform hid the tweet behind a message that said it “violates our policies regarding the glorification of violence based on the historical context of the last line, its connection to violence, and the risk it could inspire similar actions today.”

As is standard with this notice, engagements with the Tweet will be limited. People will be able to Retweet with Comment, but will not be able to Like, Reply or Retweet it.

Users could still click through and view the full unedited tweet.

Trump, who has more than 80 million followers on Twitter, lashed out at the platform on Thursday, signing an executive order seeking to strip social media giants of legal immunity for content on their platforms.

The order calls on government regulators to evaluate if online platforms should be eligible for liability protection for content posted by their millions of users.

The move, which was slammed by critics as a legally dubious act of political revenge, came after
Twitter labelled two earlier Trump tweets – on the increasingly contentious topic of mail-in voting – as misleading.

If enforced, the action would upend decades of precedent and treat internet platforms as “publishers” potentially liable for user-generated content.

Trump told reporters at the White House he acted because big tech firms “have had unchecked power to censor, restrict, edit, shape, hide, alter any form of communication between private citizens or large public audiences.”

“We can’t let this continue to happen,” Trump said.

....These THUGS are dishonoring the memory of George Floyd, and I won’t let that happen. Just spoke to Governor Tim Walz and told him that the Military is with him all the way. Any difficulty and we will assume control but, when the looting starts, the shooting starts. Thank you!
— Donald J. Trump (@realDonaldTrump)
May 29, 2020
Critics said, however, Trump has no authority to regulate private internet operators or change the law, known as
Section 230, which backers say has allowed online platforms like Facebook and Twitter to flourish.

The American Civil Liberties Union called Trump’s order “a blatant and unconstitutional threat to punish social media companies that displease the president.”

Eric Goldman, director of the High-Tech Law Institute at Santa Clara University, said the order was “more about political theatre than about changing the law.”

The order “is not legally supportable – it flies in the face of more than 900 court decisions,” Goldman said.

The White House seeks to sidestep the provisions giving internet firms immunity by treating them as publishers operating in part of a “public square.”

Amid Twitter fact-check row, Trump signs order against social media firms
29 May 2020

“Twitter, Facebook, Instagram, and YouTube wield immense, if not unprecedented, power to shape the interpretation of public events; to censor, delete, or disappear information; and to control what people see or do not see,” the executive order said.

While the Trump order would not prevent platforms from moderating content, it could open them up to a flood of lawsuits from anyone who claims to be harmed by content posted online.

Critics said the action represents a dangerous effort by the government to regulate online speech.

“Social media can be frustrating. But an Executive Order that would turn the FCC into the President’s speech police is not the answer,” said Jessica Rosenworcel, a Democratic member of Federal Communications Commission, one of the agencies tasked with enforcing the executive order.

Matt Schruers, president of the Computer & Communications Industry Association, a trade group, warned that “retaliation against the private sector for fact-checking leadership is what we expect from foreign autocracies, not the United States.”

Violent protests over death of George Floyd spread beyond Minneapolis
29 May 2020

Internet firms have denied Trump’s claims of bias, and point to his massive social media following. But the president’s move plays into his narrative ahead of his difficult November re-election battle that liberal forces are trying to censor Republicans.

A wider debate has long been under way on the power that social media companies wield and what responsibility they bear for posts that are misleading or hurtful.

Internet services like Twitter and Facebook have been struggling to root out misinformation, while at the same time keeping their platforms open to users.

Donald Trump becomes third US president in history to be impeached

After long resisting calls to censure Trump over his frequent factually inaccurate posts, Twitter on Tuesday flagged the president for the first time for making false claims.

Trump had tweeted – without any evidence – that more mail-in voting would lead to what he called a “Rigged Election” this November.

Trump is igniting a constitutional crisis — and it could doom the US to becoming a failed state

Published May 28, 2020 By Bill Blum, Independent Media Institute

There are no universally accepted definitions of either a “failed state” or a “constitutional crisis.” Good arguments can be advanced, however, that we are suffering from both disorders at the state and national levels in the midst of the lethal COVID-19 pandemic.

In a May 19 article, Guardian columnist Nathan Robinson argues that Wisconsin is beginning to resemble a failed state, which he defines as “one that can no longer claim legitimacy or perform a government’s core function of protecting the people’s basic security.” The Wisconsin GOP, Robinson writes, is a minority party, but after years of extreme gerrymandering, it wields de facto dictatorial powers, enabling it to gut public-sector unions and advance the privileges of business interests and the wealthy.

The failed nature of Wisconsin governance, according to Robinson, was graphically displayed on May 13, when the conservative Wisconsin Supreme Court overturned Democratic Governor Tony Evers’ coronavirus “stay-at-home” orders. The ruling came in a lawsuit brought by the state’s GOP-controlled assembly and senate. It allowed patrons to crowd into bars, restaurants, and other venues without any social-distancing restrictions whatsoever.

The people of Wisconsin, by and large, are no fools. Like people everywhere, they want a return to normalcy, but they are also concerned about recklessly reopening the economy. A Marquette University poll released on May 12 found that 69 percent of residents supported the governor’s policies, which were designed by the state’s top public-health officials. The policies were also backed by the ACLU, which saw them as vital for the protection of minority communities that have been devastated by COVID-19.

The net result, in Robinson’s view, is this: “The more that Wisconsin Republicans act to impose their will unilaterally without regard to the safety or will of the people, the less we should treat Wisconsin as a functional government.”

But what about the country as a whole under the Trump presidency?

In a longer and even more scathing article published in the June issue of the Atlantic magazine, George Packer contends that the U.S. has crossed the failed-state threshold. Packer’s language and observations are jarring, even for the Trump era.

“When the virus came here,” he begins, “it found a country with serious underlying conditions, and it exploited them ruthlessly. Chronic ills—a corrupt political class, a sclerotic bureaucracy, a heartless economy, a divided and distracted public—had gone untreated for years. We had learned to live, uncomfortably, with the symptoms. It took the scale and intimacy of a pandemic to expose their severity—to shock Americans with the recognition that we are in the high-risk category.”

Packer continues:

“The crisis demanded a response that was swift, rational, and collective. The United States reacted instead like Pakistan or Belarus—like a country with shoddy infrastructure and a dysfunctional government whose leaders were too corrupt or stupid to head off mass suffering. The administration squandered two irretrievable months to prepare. From the president came willful blindness, scapegoating, boasts, and lies. From his mouthpieces, conspiracy theories and miracle cures…

“Every morning in the endless month of March, Americans woke up to find themselves citizens of a failed state. With no national plan—no coherent instructions at all—families, schools, and offices were left to decide on their own whether to shut down and take shelter.… Russia, Taiwan, and the United Nations sent humanitarian aid to the world’s richest power—a beggar nation in utter chaos.”

The extent of the chaos and the scale of our national shame cannot be understated. The U.S., with 4 percent of the world’s population, accounts for roughly 29 percent of worldwide COVID-19 fatalities. The raw numbers are breathtaking, as more than 100,000 Americans now have died from the virus. By comparison, a total of 58,220 Americans died in the Vietnam War.

Meanwhile, guided by his goal of winning another term at all costs, the president has pressed states to fully reopen despite the continued uptick in coronavirus cases in Georgia, Alabama, Arkansas, California, and elsewhere. Given the highly contagious nature of the virus and its propensity for exponential growth, it may only be a matter of time until a dreaded “second wave” of infection emerges and sweeps across the entire country.

Packer correctly blames Trump’s epic incompetence, dishonesty and corruption for the catastrophe that has already unfolded and the miseries yet to come. He accuses the president of immolating what was left of our national civic life prior to his election, and sharply dividing Americans along the lines of race, nationality, and religion.

Even if it may be premature to join Packer in labeling the U.S. a failed state, it’s not too early to cite Trump for igniting a constitutional crisis that could eventually lead to failed-state status. Legal scholars such as Princeton University professor of politics Keith Whittington tell us that constitutional crises fall into two general categories: “operational crises,” which occur when vital political disputes can’t be resolved within the existing constitutional framework; and “crises of fidelity,” which happen when a major political actor no longer feels bound by constitutional norms.

We’re beset by both kinds of crises today. As Harvard University Law School Professor Noah Feldman explained in an October 2019 New York Times op-ed, penned on the eve of Trump’s impeachment by the House of Representatives, Trump’s abiding lawlessness means that “we no longer have just a crisis of the presidency. We also have a breakdown in the fundamental structure of government under the Constitution. That counts as a constitutional crisis.”

Since his acquittal by the Senate, Trump has upped the constitutional ante, defying congressional subpoenas, firing inspectors general from several executive-branch departments, arguing before the Supreme Court that he enjoys “absolute immunity” from state criminal investigations, and stacking the federal judiciary with right-wing ideologues. Assisted by Attorney General William Barr, who has transformed the Justice Department into a partisan enterprise, Trump has taken his place in an exclusive rogues’ gallery of past commanders in chief who have wreaked havoc on the constitutional order.

Historically, Trump is following in the footsteps of Andrew Johnson, who precipitated a constitutional crisis in his showdown with the Reconstructionist Congress that ended with his impeachment and near removal from office. A little more than a century later, Richard Nixon triggered another over Watergate that ended in his resignation in the face of near-certain removal.

The nation’s most damaging and far-reaching constitutional crisis, of course, and the one that nearly sealed the fate of the U.S. as a permanently failed state, was the Civil War. Although some commentators have argued that we are in the early stages of a new civil war, fueled by Trump’s malignant narcissism, his frequent use of white-nationalist rhetoric, and the corrosive effects of the pandemic, our hostilities have not yet degenerated into overt bloodletting in the streets.

But will the discord remain peaceful? Armed anti-lockdown protesters stormed the Michigan statehouse in April and May, and a prominent anti-lockdown leader in North Carolina has vowed to resort to violence, if necessary, to achieve the movement’s aims. Predictably, the president has done nothing to deter their demonstrations or tone down their heated rhetoric.

Trump isn’t the first power-hungry American president, or the first racist to occupy the Oval Office, or the first to promulgate incendiary lies, large and small, to manipulate his supporters. But unless he is defeated in November, he may prove to be the most dangerous and, worst of all, the deadliest.

Bill Blum is a retired judge and a lawyer in Los Angeles. He is a lecturer at the University of Southern California Annenberg School for Communication. He writes regularly on law and politics and is the author of three widely acclaimed legal thrillers: Prejudicial Error, The Last Appeal, and The Face of Justice.

Commentary: The death of George Floyd, and the frustration that nothing ever changes

2020/5/28 ©Star Tribune (Minneapolis)

Don’t know what it is about warm weather that seems, more so than other seasons, to pull always-present racial tensions to the fore — probably nothing, probably just a perception — but recent high-profile events are conglomerating in such a way as to portend a long, hot summer. “Hot” being a metaphor. And not just in Minneapolis, but across the nation.

Start with the death of Ahmaud Arbery in Georgia. Arbery, 25, was jogging in a suburban neighborhood near his home and was shot dead after being pursued, for the purpose of interrogation, by two white men who told police they thought he was a burglar.

That happened in February, but it took more than two months, three prosecutors, mounting frustrations and the emergence of a video of the shooting before arrests were made and charges filed. We don’t know everything that happened before the confrontation, but if you watch the 40-second video, it will be difficult to place your sympathies with the white men.

Then there was the incident just Monday morning in New York’s Central Park, in which a white woman walking her dog called the cops on a black bird-watcher who had asked her to leash the animal as required by law. She told him: “I’m going to tell them there’s an African American man threatening my life.”

Before that, the man, apparently sensing trouble, had began recording with his phone. The video he posted on Facebook reveals two people speaking in clipped, strained voices, as if lacking access to the full capacity of their lungs, as tends to happen instead of shouting when otherwise peaceable people find themselves in the middle of a confrontation. The video doesn’t show how things started. But if you watch it, you’ll find it difficult to place your sympathies with the white woman.

She, at least, later apologized and tried to explain her motivations, which seems helpful, and was fired from her unrelated job, which does not.

The Central Park dispute barely had time to percolate Monday before the news turned back to the truly tragic, the death of a handcuffed black man in south Minneapolis who had been held facedown to the pavement for more than five minutes with a police officer’s knee on his neck.

We don’t know everything that happened Monday evening before George Floyd was on the ground. But because there’s video, we have a reasonable sense of what happened afterward. The officer, identified as Derek Chauvin, kneeled on his suspect’s neck for more than five minutes. Floyd, unable to move, begged, “please, please, please, I can’t breathe.” He begged, “Mama.” Bystanders urged the officer to let up. The stoic officer persisted. And Floyd fell silent.

Then came the protests. By Tuesday evening, thousands of people had filled the streets, and some clashed with police officers. One side deployed rocks; the other, tear gas and rubber bullets. This degree of tension even though the four Minneapolis officers involved in Floyd’s arrest had been quickly fired and state and federal investigations had been initiated. Even the relative urgency of these actions wasn’t sufficient.

The situation in Minneapolis might be described as Eric-Garner-meets-Ferguson. It’s unfortunate that one can use that kind of shorthand and be understood by most everyone. It also must be remembered, though, that shorthand simplifies.

There are several videos circulating online that were taken during Tuesday evening’s march. Even as a whole, they don’t make clear how the march turned violent. Perhaps there were agitators who added an aggressive element to an otherwise peaceful protest. Perhaps there was a lack of restraint by the Police Department, either in its strategy for managing the circumstances or in individual officers’ interpretation of it. All of the above, one suspects.

All of the above. But above all, it’s hard to ignore the central frustration: that nothing ever changes. From Jamar Clark to Philando Castile to now, there’s a complicated but unacceptable through line in recent policing history.

Things do change, of course — incrementally. But such progress just can’t compete for public attention with high-profile events.

End racism? Stop killing black people? Of course. There’s nothing to dispute. Equally important to progress are less-encompassing goals that can be defined, met and documented.

What might that look like?

For a police department, it starts with accountability within the ranks. It doesn’t take a citizen’s death to raise questions about police officer misconduct. Lesser abuses occur, complaints are filed and sometimes officers are fired. And then — at least half the time, it appears — they’re reinstated.

This happens in part because the state requires local governments to submit to binding arbitration in disciplinary actions. So one piece of progress would be to revisit that law. Another would be for departments — through training, peer pressure or whatever means — to change their cultures so that rogue behavior is unacceptable. That would be demonstrated by a sheer drop in the number of complaints.

Because there are more good cops than bad cops — you know this is true — police officers as much as citizens, and police unions as much as police officers, have reason to push for this kind of change. And they know that’s true, even if they see ways it seems disadvantageous.

And for the rest of us, who just want to live without complicity in racism and brutality?

Protests are an entirely valid way to bring pressure for change, but they don’t work if people agitate for a few days then go on with their lives. They don’t work, either, if escalated until others grow weary of the disruption and turn away from the cause.

They don’t work unless paired with intellectual engagement. They don’t work, ultimately, without attention to the ballot box.

Housing, education, jobs, sentencing — these are just a few subjects in addition to policing that offer opportunities for documentable progress.

That doesn’t feel as satisfying as calling out overt bigotry, does it? Not as satisfying as seeing someone sent to prison. Yet it will do more to address the subtler forms of inequality that, despite appearances, prevail today.

———

ABOUT THE WRITER

David Banks is the Star Tribune’s assistant commentary editor. Email: david.banks@startribune.com.

China’s top virus warrior ‘shocked’ by US coronavirus death toll

America’s response contrasts sharply with 17 years ago when authorities listened to experts and contained Sars to just over two dozen cases, Zhong Nanshan says

Scientist unsurprised by persistence of conspiracy theories surrounding China and the new pathogen

Guo Rui in Guangzhou 26 May, 2020

More than 100,000 people have died in the United States from Covid-19. Photo: AP

In an exclusive, wide-ranging interview with the Post, veteran Chinese infectious disease expert Zhong Nanshan shares his insights into the global battle to control the Covid-19 pandemic. In this, the second instalment of a four-part series, Zhong points to what he says is the US’ unwillingness to listen to scientific advice. The US death toll from
the coronavirus pandemic has shocked the scientist leading the fight against the disease in China, with the respiratory disease expert attributing the magnitude of American fatalities to a failure by policymakers to heed scientists’ advice.

More than 1.66 million Covid-19 infections have been reported in the US, with 98,226 people dying from the disease – the highest number of deaths for any country. In all, 5.49 million people have been infected globally and more than 340,000 have died, according to Johns Hopkins University.

“Seventeen years ago, the Sars epidemic was handled so well in the US, completely differently from the situation now,” said

Zhong Nanshan, 83, director of the National Clinical Research Centre for Respiratory Disease and the leader of a team of scientists advising the government.

“You can say that [the US] carried out very extensive screening or more screening than other countries … But the heavy casualties still shocked me,” he said in an exclusive interview with the South China Morning Post.

Zhong said his counterparts in the US told him that the American system was ill-prepared for the epidemic, despite the country’s high level of medical care, equipment and facilities.

He said this was similar to the early response in Wuhan – the central Chinese city where the outbreak was first identified – when many medical personnel were infected and died.

But the main problem in the US was the failure to listen to medical experts, he said. As a result, US President Donald Trump “underestimated the disease’s infectious power as well as its harmful nature. He thought it was a big flu.”

US officials also did not listen to medical experts’ views concerning the reopening of the economy, he said.

“Opening the economy quickly can be risky. I think they should follow the rules of science and reopen the economy step by step,” Zhong said.

Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases, has cautioned against businesses reopening too soon because of the threat of a second wave of infections.

Fauci, who is the government’s top medical specialist, has said repeatedly that “the virus will decide when the country is to open back up”. Some Trump supporters have attacked Fauci for these comments, suggesting he should be removed from the White House’s coronavirus task force.

“Of course, [the economy] is very important for any country, but this problem [of striking a balance] has not been handled well, and that’s another reason” for the pandemic’s impact in the US, said Zhong, who often has been compared to Fauci.

He said the US had stumbled this time, while it successfully nipped severe acute respiratory syndrome (Sars) in the bud 17 years ago.

Zhong said he was in touch with US experts who went on high alert after Sars broke out in early February 2003.

“So they knew [what happened] in China. I told them that a contagious disease of unknown cause [is spreading] and they needed to watch out,” he said.

“Because of the strong preventive actions taken, the US only had 27 [Sars] cases … that is completely different from what’s happening now.”

The respiratory disease specialist also noted that Sars happened two years after the September 11, 2001 terrorist attacks in the US, which had driven the US to strengthen its public health and emergency systems.

“After September 11, and as far as I know, investment in the US Centres for Disease Control and Prevention increased by 10 times,” he said.

One thing Zhong said he was not surprised by was the spread of conspiracy theories related to the new coronavirus, recalling a visit to Seattle in 2003 where he saw a magazine with the headline: “Sars: China’s weapon for mass destruction”.

“I don’t find them strange, because they were always there, and they have just resurfaced again 17 years later,” he said.

Zhong said scientists from around the world should work together to defeat the coronavirus, but politicians had created obstacles to such cooperation.
Earlier this month, Trump said he had seen evidence that a laboratory at the Wuhan Institute of Virology had been the source of the disease outbreak, although he declined to elaborate.

US Secretary of State Mike Pompeo repeated the claim, angering officials in Beijing, who threw their own accusations at Washington.

“We need to find out more [about this coronavirus]. It is especially important for scientists to work together to investigate at a time like this, and I totally support that,” Zhong said. “But this has become very difficult now because [some politicians] have politicised the issues.

“[Some people] have got this preconceived idea that China is the origin [of the coronavirus] and this has made it impossible to carry out research correctly.”

Zhong’s comments come as 77 US Nobel laureates have united to call for a review of the US National Institute of Health’s decision to cancel a federal grant for EcoHealth Alliance. The New York-based group has collaborated on coronavirus research with the Wuhan Institute of Virology, China’s leading research institute in the field.

Zhong said that while Wuhan officials had been slow in reporting the virus outbreak at the start, Beijing had been transparent in publicising information about the disease since late January.

“China shared the sequential analysis of the virus with the World Health Organisation on January 11 and reported cases every day since January 23 when Wuhan was put under lockdown,” he said.

“The rapidly rising number of cases in China after that served as a wake-up call to the world that this disease is very dangerous.

“Even if we may have been delayed, by January 23 our expert groups had given clear warnings that human transmissions had occurred and there had been infections among medical personnel. But the US only declared a national emergency on March 13.

“I really can’t see how this can be a cover-up.”

Read the first part of the series here on why Zhong thinks the Hong Kong government should ease border restrictions to help revive the economy, and part three, about how
the blame game is affecting international scientific cooperation.

China's top virus expert criticises US’ Covid-19 response
This article appeared in the South China Morning Post print edition as: China’s top expert on virus ‘shocked’ by death toll in US

Guo Rui is a China reporter covering elite politics, domestic policies, environmental protection, civil society, and social movement. She is also a documentary filmmaker, recording modern Chinese history and social issues through film. She graduated from Nankai University with a master degree in Modern Chinese History.

Hong Kong national security law: US taps allies Britain, Australia and Canada to pressure China

Countries call on China to honour the Sino-British Joint Declaration in a statement

The four foreign ministers say the national security law would undermine the ‘one country, two systems framework’

4 OF THE 5 EYES

Mark Magnier in United States and Stuart Lau
Published: 11:57pm, 28 May, 2020

Hong Kong is no longer autonomous from China, US determines
28 May 2020

EU not in mood to follow Trump into China conflict over Hong Kong law
29 May 2020

US Secretary of State Mike Pompeo and three of his counterparts called on China to honour its commitments made under the Sino-British Joint Declaration. Photo: DPA

The US has stepped up diplomatic pressure against
China’s move to impose a national security law on Hong Kong, forming a common position with the UK, Australia and Canada.

In a four-nation statement, US Secretary of State Mike Pompeo and his counterparts called on China to work with Hongkongers on forging a way forward to honour its commitments made under the Sino-British Joint Declaration.

“China’s decision to impose the new national security law on Hong Kong lies in direct conflict with its international obligations under the principles of the legally binding, UN-registered Sino-British Joint Declaration,” said the statement, which was also signed by UK Foreign Secretary Dominic Raab, Australian Foreign Minister Marise Payne and François-Philippe Champagne, Canada’s foreign minister.

The four foreign ministers said Thursday the national security law would undermine the “one country, two systems framework”.

If the Chinese Communist Party thinks that they’re going to continue to break their promises to the world, to openly defy the rule of law, the United States of America is going to stand up and tell them noMorgan Ortagus, US State Department spokeswoman

“It also raises the prospect of prosecution in Hong Kong for political crimes, and undermines existing commitments to protect the rights of Hong Kong people,” they said.

Issued hours after China’s National People’s Congress nearly unanimously endorsed the law, the statement by the four countries asked Beijing to work things out with Hongkongers.

“As Hong Kong’s stability and prosperity are jeopardised by the new imposition, we call on the government of China to work with the [Hong Kong government] and the people of Hong Kong to find a mutually acceptable accommodation that will honour China’s international obligations under the UN-filed Sino-British Joint Declaration,” the statement said.

It did not mention what action might be taken should China fail to do so.

State Department spokeswoman Morgan Ortagus said in an interview on Thursday that the US continues to confer with other allies in a bid to garner more countries to speak out against China’s toughening stance toward Hong Kong, although she did not cite specifics.

In response to Beijing’s assertion that the new law targets “a very narrow category of acts that seriously jeopardise national security and has no impact on Hong Kong’s high degree of autonomy”, Ortegus said the US obviously disagrees.

“We will continue to look for ways that we can support the people of Hong Kong and support these protests,” she said. “But if the Chinese Communist Party thinks that they’re going to continue to break their promises to the world, to openly defy the rule of law, the United States of America is going to stand up and tell them no.”

The Thursday statement came a day after Pompeo told Congress that Hong Kong no longer enjoyed a high degree of autonomy, an assessment that paved the way for further action, including tariffs, sanctions and visa treatments.

Beijing has said the joint declaration, reached between UK Prime Minister Margaret Thatcher and Chinese premier Zhao Ziyang in 1984, was no longer valid since Hong Kong’s handover of sovereignty in 1997.

The European Union, which is not part of the four-country statement, insisted that it had been in dialogue with US, UK, Australia and Japan to discuss issues about Hong Kong All 27 EU foreign ministers will discuss the situation on Friday in a scheduled meeting. They will also discuss future EU-China relations.

New Zealand, the other country of the Five Eyes security alliance, did not join the statement.

Analysts said they expect the EU parliament to, at a minimum, sign on to Thursday’s joint statement.

“The challenge is to lay out steps to a solution,” said Michael Davis, a research scholar at Columbia University and former University of Hong Kong law professor. “China has been quite expert at playing countries in Europe against each other under a united front strategy. Whether those countries will find common ground will be the challenge.”

Acts that made Hong Kong a pawn in US-China battleground
29 May 2020

Analysts said Thursday’s joint statement shows the four signatories are in agreement on calling out Beijing for violating commitments it made to the UK and the global community over Hong Kong’s future, and on voicing concern over civil liberties and autonomy in the city. But there is little indication of multilateral concrete steps.

“The joint statement does not suggest any consequence,” Davis added. “So at this point it is a gentle nudge for Beijing to pause and consider the concerns being raised by Hong Kong people and the international community.”

China's proposed national security law for Hong Kong is in direct conflict with its obligations under the Joint Declaration. If enacted, this law would violate Hong Kong’s autonomy and freedoms. UK and are deeply concerned.
https://t.co/bbGgJgHklw
pic.twitter.com/e7eQySFDFX
— Dominic Raab (@DominicRaab)
May 28, 2020

The US has threatened sanctions, tariffs, asset seizures and visa treatment. The UK has proposed immigration changes, announcing on Thursday that Hongkongers with British National (Overseas) passports will be offered a path to British citizenship if China enforces the national security law in the city.

However, it is not clear that Beijing cares much about Hong Kong residents who chose the special BN(O) status. prior to the 1997 handover.

With US-China diplomatic channels badly clogged by mistrust, analysts say the two economic giants are signalling through the press and their actions as they try to assess each other’s position.

“We’re posturing,” William Zarit, senior counsellor with the Cohen Group consultancy said, even as China moves ahead with tough new Hong Kong security and sedition legislation.

“What I’m hoping is that our policymakers will take into consideration the benefits, the values, of the Hong Kong people,” he added, speaking at an event co-sponsored by Concordia and the China General Chamber of Commerce.

The usually partisan US Congress is almost unanimously in favour of taking a tougher line on China, which points to President Donald Trump enacting some sort of punitive measures against Hong Kong in a US election year.

China’s top legislature approves national security bill for Hong Kong

“We should all be speaking out against that security act, not just the United States, the EU, people around the world should be speaking out against it,” said House Speaker Nancy Pelosi, a Democrat from California, in a press conference Thursday.

“Hong Kong is so much part of the vitality of trade and commerce that goes into mainland China, you would think that they would want that vitality to continue. But President Xi is a very oppressive tyrant,” she added.

Beijing’s passage of the security law – and Thursday’s joint statement – has widened political fissures within Canada, giving rise to “very strong countervailing pressures” on Prime Minister Justin Trudeau from political opponents, said Fen Hampson, an international affairs expert at Ottawa’s Carleton University.

Trudeau has tried to improve relations after Canada’s 2018 arrest of Huawei executive Meng Wanzhou at the request of US authorities and Beijing’s arrest days later of two Canadians living in China, a move widely seen in Canada as retaliatory hostage-taking.

The Canadian prime minister from the Liberal Party now faces growing calls for action against China, particularly from the opposition Conservative Party, Hampson said, as well as others “who say we should never do business with China, it’s an autocratic regime, whose values are completely antithetical to Canadian values”, he added.

Additional reporting by Robert Delaney and Owen Churchill

The birth of butter chicken, invented to feed a busload of refugees

A dish so ubiquitous on menus people mistake it for a Western invention, butter chicken is as authentically Indian as Indian food gets, inventor’s grandson says

It was created by chance at a restaurant in Delhi owned by three Punjabi Hindu refugees, when a big group arrived late for a meal and the chefs had to improvise
Alkira Reinfrank Published 26 May, 2020

The story of butter chicken – like this one held by Hong Kong chef Palash Mitra – is one of three hard-working refugees, a hugely popular Delhi restaurant and an accidental flavour combination born out of necessity and leftover tandoori chicken. Photo: K.Y. Cheng
Few people, when tucking into a serving of butter chicken, would think about the history of the Indian dish. For Raghav Jaggi, however, this aromatic staple is more than a taste of home – it’s his family’s legacy.

His grandfather, Kundan Lal Jaggi, dedicated his life to tandoori cuisine and is one of three Punjabi Hindu refugees celebrated for inventing butter chicken.

Few other dishes can evoke such a passionate and varied response from diners but, whether it’s religiously ordered or desperately avoided, there’s no denying the dish has helped popularise Indian cuisine globally.

“Butter chicken is a lifestyle,” Jaggi, 39, says with a chuckle, from his home in New York.

The significance of his grandfather’s endeavours aren’t lost on Jaggi, who warmly remembers Friday afternoons as a boy in Delhi,

India, that were spent eating creamy butter chicken – called murgh makhani in Hindi.

“Butter chicken is a very critical and important part of the Indian culinary journey,” Jaggi says. “If you really look at Indian food and how popular it is in the world, some of the creations that my grandfather made in his kitchen are the reason Indian food is so popular.”

The dish is so ubiquitous on menus outside the South Asian country today that people often mistake it as a Western invention, like chicken tikka masala. But butter chicken, traditionally made with marinated chicken cooked in a tandoor oven and served in a creamy tomato gravy, “is as authentically Indian as Indian food gets”, Jaggi says.

Kundan Lal Jaggi is one of three Punjabi Hindu refugees celebrated for creating butter chicken. Photo: courtesy of Amit Bagga

The story of butter chicken – which dates back to the late 1940s – is one of three hard-working refugees, a star-studded Delhi restaurant and an accidental flavour combination born out of necessity.

Partition of India in 1947, Kundan Lal Jaggi, Kundan Lal Gujral and Thakur Dass fled Peshawar – in northwest Pakistan today – for Delhi.

The division of British India into two independent states – Hindu-majority India and Muslim-majority Pakistan – displaced about 15 million people along religious lines. The death toll from that time of upheaval is still disputed, with figures ranging from 200,000 to 2 million.

In the pre-Partition days, Kundan Lal Jaggi and Kundan Lal Gujral had worked in a famed tandoori restaurant in Peshawar called Moti Mahal, while Thakur Dass worked across the road.

Mokha Singh Lamba (in the middle row, centre) and Kundan Lal Jaggi (far left, standing) in Peshawar. Photo: courtesy of Amit Bagga

“My grandad, like many other Hindu Punjabis, left everything that he had in what is now
Pakistan and moved to India. Delhi, particularly the area known as Daryaganj, became the hub for a number of these refugees,” says Jaggi, who describes his grandfather as an extremely resilient and humble man.

Working in kitchens is all Kundan Lal Jaggi knew. He left school at the age of 15 to make money, and began by cleaning tandoors, before moving up through the ranks to become a master of the clay oven, roasting meats and naans at extremely high temperatures.

Palash Mitra making butter chicken in a tandoor oven at Rajasthan Rifles restaurant in Hong Kong. Photo: K.Y. Cheng

Arriving in Delhi with few possessions, he decided to open a tandoori restaurant in the Daryaganj area with Kundan Lal Gujral and Thakur Dass. The trio named it Moti Mahal, after the closed restaurant from their hometown, with the blessing of its former owner, Mokha Singh Lamba.

One night, a few months after opening, a busload of refugees came late to the restaurant in search of a meal, but there were only a few dry tandoori chickens left.

“There were truckloads of refugees coming into the area, and at that time you never refused food to anyone,” Jaggi says.

Moti Mahal’s original team in 1947 outside the restaurant.

Photo: courtesy of Amit Bagga

Kundan Lal Jaggi decided to create a simple sauce of cream, tomatoes and a few spices infused with the smoky tandoori chicken, “so that people could use the naan and dip it into the gravy if they were not able to get a bite of chicken”.

“It was rich enough to give them enough [sustenance] to survive another day, and it was totally by chance. Everyone loved the dish so much they asked for it again the next day. And the day after, the same thing happened,” Jaggi says. It was so popular, it was made a permanent fixture on the menu and became one of the dishes that defined the restaurant.

Moti Mahal was one of the most iconic restaurants in the Indian capital for the next 45 years, says Jaggi, and popularised tandoori cuisine.

Kundan Lal Jaggi (second from left) with celebrity guests.

Photo: courtesy of Amit Bagga

In the late 1940s in Delhi, most of the population was vegetarian, while the newly arrived migrants were meat eaters. To ensure vegetarians could enjoy a meat-free version of the dish, Jaggi says, his grandfather invented dal makhani, which has also found global fame.

“Moti Mahal was a turning point for India. People used to travel from abroad to eat there. It was a landmark,” says Palash Mitra, 39, head chef of the world’s first Michelin-starred Pakistani restaurant, New Punjab Club, in Hong Kong.

It attracted the likes of India’s first prime minister Jawaharlal Nehru, former US President Richard Nixon, former US first lady Jackie Kennedy and countless Bollywood stars, Jaggi says.

Able to seat up to 350 people, Moti Mahal also helped introduce a dining-out culture to India. “Kundan Lal Jaggi represented his north Indian heritage really well and took Indian food out onto the world’s stage,” says Mitra, who is also the culinary director of Southeast Asian cuisine at the Black Sheep Restaurants group in Hong Kong.

“Kundan Lal [Jaggi] is probably one of the first Indian chefs-cum-restaurant owners in the true sense, like a French chef. He was the chef of his own restaurant, he was selling food commercially, he made a big business out of it.”

A picture of the Moti Mahal kitchen from the 1970s.

Photo: courtesy of Amit Bagga

To keep up with demand, the trio opened four venues across Delhi and even ran their own poultry farm, enabling them to acquire up to 600 chickens a day for their restaurants. In the 1950s, then-Indian prime minister Jawaharlal Nehru appointed Moti Mahal as the official caterer of India’s Republic Day, meaning they needed to feed “a few thousand people in a single day”.

Mitra believes the invention of butter chicken was no accident. “He did a massive service to Indian cuisine and he should be celebrated more,” he says.

Mitra still remembers the first time he tried butter chicken as a 12-year-old. It was the first time he had eaten meat, and “the smokiness, the texture and flavour was something totally unique”.

“It was a turning point in my life. I said, ‘I am not going to eat vegetables any more,’” says Mitra, whose restaurants are known for their succulent meat offerings cooked in a tandoor oven.

Palash Mitra cutting up meat for butter chicken at Rajasthan Rifles. Photo: K.Y. Cheng

As chefs from Moti Mahal moved on to work at new restaurants or to open their own, they took the butter chicken recipe with them, says Jaggi – and the dish swept across India.

Mitra says the dish’s global spread coincided with migration of Indian labourers – specifically Punjabis – to the West.

“When they travelled, they took their food with them. You can take the Punjabi away from Punjab, but you can’t take the Punjab out of the Punjabi. So they will create butter chicken anywhere they go,” he says.

“Butter chicken is not the only dish that represents India or Punjabi food, but it significantly demonstrates the culinary history and landscape of the country.”

Last year, Raghav Jaggi (left) and Amit Bagga opened Daryaganj, a restaurant chain in Delhi. Photo: courtesy of Amit Bagga

The trio behind Moti Mahal eventually retired, selling their empire as a franchise in 1992. As ubiquitous as the dish is, so too is the name Moti Mahal. Thousands of Indian restaurants worldwide bear the name, although they have no affiliation with the original restaurants.

Last year, Jaggi and his childhood friend Amit Bagga opened Daryaganj, a new restaurant chain in Delhi, as a tribute to his grandfather’s legacy and named after the area where Kundan Lal Jaggi opened his first restaurant. Their four venues celebrate north Indian cuisine – including butter chicken – using Kundan Lal Jaggi’s original recipes. Unsurprisingly, butter chicken and dal makhani make up 43 per cent of all orders.

Kundan Lal Jaggi died in Delhi in 2018, aged 94, at peace and out of the limelight, as he would have wanted, his grandson says.

“Everything they [the three restaurateurs] did was out of pure love, ensuring they could share their love and food with the larger community,” Jaggi says. “What fortune my grandfather would have created, what empire he would have set, how the next generation and my generation would flourish, to be honest, he had zero clue.”

Additional reporting by Yang Yang and Bernice Chan

This article appeared in the South China Morning Post print edition as: A legacy to be savoured

Alkira Reinfrank is a digital production editor and reporter with the South China Morning Post, where she also co-hosts the award-winning podcast Eat Drink Asia. Before moving to Hong Kong, Alkira worked as a multiplatform reporter with ABC News and WIN News in Australia. Alkira has appeared on BBC World News, BBC World Service, The Project (Australia), i24 News (Israel) and triple J Hack (Australia).

US-China trade war slashes US$1.7 trillion from American companies’ market caps, Federal Reserve Bank of New York says

Higher tariffs are poised to reduce American firms’ investment growth rate by nearly 2 percentage points

Companies with exposure to China more affected as a slowdown in the Chinese economy reduces the return on investment American companies make there

Jodi Xu Klein in New York 29 May, 2020

Cargo cranes are used to take containers off of a Yang Ming Marine Transport boat at the Port of Tacoma in Washington last year. Photo: AP

The US trade war with China has slashed US$1.7 trillion from American companies’ market value, the Federal Reserve Bank of New York said in a Thursday report.

The higher tariffs, a tool to create a trade barrier against other countries, are poised to reduce American firms’ investment growth rate by nearly 2 percentage points.

The increased cost has already cut US investment expansion by 0.3 percentage points through the end of 2019 and will decrease by another 1.6 percentage points this year, according to the report published on Thursday by authors led by economist Mary Amiti, a vice-president at the Federal Reserve Bank of New York.

American firms bore almost all the cost of higher US import duties, and those that export to China also became less profitable due to Chinese tariffs, a finding that countered US President Donald Trump’s narrative that China is paying the tariffs.

The researchers, also including Columbia University’s Sang Hoon Kong and David Weinstein, used the comparison of stock prices to estimate lower expected profitability that in turn hurts future investment growth. The central bank’s research found that trade war announcements were associated with 8.9 per cent in stock price declines.

The study used the direct link between a firm’s market-to-book value and the firm’s investment outlays, a well-established correlation, to calculate growth, said Amiti in the research.

Factors that contribute to the reduction in future growth for American companies include greater policy uncertainty and changes in economic conditions due to the trade conflict.

Companies with exposure to China are more affected by the trade dispute as a slowdown in the Chinese economy reduced the return on investment that American companies made there, the researchers found.

“Discussions of the trade war often focus only on US exports to and imports from China, missing the much larger exposure of US firms emanating from their subsidiaries in China,” the report said.
About 46 per cent of 3,000 US companies included in this report are exposed to China through importing, exporting or selling through subsidiaries. They generated an average of 2.3 per cent in revenue from China.

The Trump administration started slapping new tariffs on more than US$300 billion of Chinese goods in 2018 in order to correct the widening trade deficit the US had with China.

Despite a phase one trade deal the two countries struck in January that put the drawn-on conflict on pause and prevented the latest batch of planned tariffs from going into effect, hundreds of billions of dollars in tariffs remain in place.

Trump and his senior advisers have insisted that China is paying the cost. But earlier research have shown that American companies and consumers are “paying almost the full cost of US tariffs”, according to a paper by the National Bureau of Economic Research published in January.
In November research by the Federal Reserve Bank of New York, the prices Chinese firms charged have barely budged, meaning the increased part of the cost was borne by US companies and consumers, estimated at around US$40 billion annually.

Jodi Xu Klein is an award-winning business journalist with 20 years of experience. She joined the Post in 2017, after a decade based in the US reporting for The Wall Street Journal and Bloomberg. She was part of the Time Magazine team that won the Henry R. Luce Award, breaking the China SARS story.

Could American banks get caught in the middle of US-China rift over Hong Kong?

A gateway to China, Hong Kong also serves as an important regional hub for America’s largest lenders

American banks accounted for about 5 per cent of total assets in the city last year, according to HKMA

THIS WILL APPLY TO CANADIAN BANK'S OPERATING OUT OF HONG KONG
https://en.wikipedia.org/wiki/List_of_banks_in_Hong_Kong

Chad Bray Published: 29 May, 2020 SCMP
It would be a ‘serious mistake’ to jeopardise Hong Kong’s special status, which is fundamental to its role as an attractive investment destination and international financial hub, the US Chamber of Commerce said this week. Photo: Felix Wong

A gateway for capital flowing in and out of mainland China, Hong Kong has for decades also served as a lucrative regional hub for America’s biggest banks operating in Asia.

But, rising tensions between the United States and China are threatening to leave foreign lenders – and billions of dollars in potential revenue as the mainland’s financial services industry opens up further – stuck in the middle.

On Wednesday, US Secretary of State Mike Pompeo said Hong Kong no longer maintained a “high degree of autonomy” from China, after the National People’s Congress (NPC) said it would adopt new national security legislation tailor-made for the city following months of anti-government street protests. The resolution was passed by a near unanimous vote on Thursday.

The Trump administration has not said what actions it might take in response other than President Donald Trump saying he planned to do “something” this week. The declaration represents the latest firestorm, as relations have deteriorated dramatically between the world’s two biggest economies in recent years.

“We expect the latest move to have considerable implications for the city, with the threat of higher tariffs, sanctions, as well as tougher investment and visa rules between Hong Kong and the US, including potential sanctions on businesses – particularly banks – operating in the city found to be supporting anyone in violation of the ‘one country, two systems’ model,” said Benjamin Quinlan, managing partner of consultancy Quinlan & Associates.

The US was Hong Kong’s second-largest trading partner after mainland China, according to Hong Kong’s Trade and Industry Department. American banks accounted for 5 per cent of the banking sector in the city in 2019, with about US$166 billion in total assets, according to the Hong Kong Monetary Authority, the city’s de facto central bank.

Since Hong Kong was returned to China in 1997, the special administration region has held a special status with the US, allowing it as a free port to avoid tariffs the US has placed on China and to import goods the US has restricted from being shipped to the mainland.

“It would be a serious mistake on many levels to jeopardise Hong Kong’s special status, which is fundamental to its role as an attractive investment destination and international financial hub,” the US Chamber of Commerce said on Tuesday.

The US response could range from sanctioning individuals and Chinese companies – including Hong Kong’s members of the NPC – and restricting visas to the “nuclear option” of using the International Emergency Economic Powers Act (IEEPA) to prevent future investment or transfer of funds to Chinese-related entities or persons.

Enacting the IEEPA would require the president to declare that there is an unusual and extraordinary threat to the US and consult Congress. It has typically been used to sanction countries that fund terrorism, or which are developing nuclear weapons, such as North Korea.

Martin Petch, senior credit officer in the sovereign risk group at Moody’s Investors Service, said changed international perceptions of Hong Kong could add downward pressure to the city’s credit rating. “This will particularly be the case if the international response, in turn, leads to a weakening of Hong Kong’s role as an international economic and financial centre,” he said.

For US banks, Hong Kong has been a significant hub for corporate and investment banking, both inside and outside mainland China, and, increasingly, wealth management, as China has grown wealthier.

Last year, American banks played key roles in some of the biggest listings in the city. Hong Kong has led global fundraising for seven of the past 11 years.

Citigroup, JPMorgan and Morgan Stanley all served as joint global coordinators for Alibaba Group Holding’s US$12.9 billion secondary listing in Hong Kong, the biggest listing in the city and the second-largest globally in 2019. JPMorgan and Morgan Stanley also were joint sponsors of the US$5.7 billion initial public offering last year of Budweiser Brewing Company APAC, the Asia-Pacific arm of Anheuser-Busch InBev.

Chinese technology companies JD.com and NetEase are preparing for their own secondary listings in the city later this year.

American banks accounted for 19 per cent of investment banking fees booked in Hong Kong last year, or about US$309.8 million, according to data provider Refinitiv. Overall, investment banks earned US$1.63 billion in fees last year.

Citigroup, which also operates 16 retail banking branches in the city, traces its history in Hong Kong back to 1902. The city serves as one of its main hubs in the Asia-Pacific region, with about 4,500 employees, and accounted for about 15 per cent of the bank’s revenue in the region.

The bank, which does not break out its results for Hong Kong, reported US$1.58 billion in profit from continuing operations in its global consumer bank in Asia last year, and profit from continuing operations of US$3.46 billion in its institutional clients business. Its regional chief executive is based in Hong Kong.

“Citi’s exposure to Hong Kong includes top local corporates and US and [multinational] names, and is around 3 per cent of our total exposure,” a bank spokesman said. The bank is monitoring events closely in Hong Kong and remains committed to the city, the spokesman said. The bank’s deposits and loans have increased in Hong Kong in the past year and it has not seen capital flight from the city, he added.

The city also serves as the regional headquarters for Bank of America, Goldman Sachs and Morgan Stanley. JPMorgan’s Asia-Pacific CEO, who oversees 17 markets in the region, is based in Hong Kong.

Goldman employs about 1,700 people in Hong Kong and another 250 onshore in mainland China, with most of the regional business heads at Goldman based in the city. Overall, Asia-Pacific accounted for 13 per cent of its revenue last year, or about US$4.65 billion.

Morgan Stanley has about 2,000 employees in the city, and Asia-Pacific as a whole accounted for US$5.13 in revenue in 2019, or about 17 per cent of the bank’s total revenue.

Like many of their American and European rivals, Goldman, JPMorgan and Morgan Stanley have moved to take majority control of their securities operations in mainland China in the past year, as Beijing has relaxed foreign ownership rules for securities firms, asset managers and insurance companies.

The opening of mainland China’s financial services sector, however, is not expected to represent a shift of personnel out of Hong Kong, but an opportunity to access the country’s domestic market, bankers said. Capital controls in mainland China mean Hong Kong will remain an attractive market for Chinese companies seeking to access foreign investors, they said.

Rising US-China tensions and the return of protests to Hong Kong’s streets over the national security law have also renewed questions about Hong Kong’s future attractiveness to expats.

“For much of my time here, it was seen from an earnings, career and lifestyle perspective as one of the best places in the world to work in financial services. A very attractive kind of career destination city,” said John Mullally, regional director for southern China and Hong Kong financial services at search firm Robert Walters. “That has definitely changed. The protests have played a big part in that.”

However, the lifestyle afforded to financial services workers in the city still makes it an attractive location for expats, according to Abimanu Jeyakumar, head of North Asia at headhunter Selby Jennings.

“At the moment, with the new bill being passed, it does cause another barrier to overcome when it comes to relocating staff,” Jeyakumar said. “[Hong Kong has] always been a conduit for Chinese investments into the international market and international investments into China. I think a lot of banks are waiting to see how this plays out. This could bode an opportunity, or a challenge.”

Additional reporting by Alison Tudor-Ackroyd.

Chad Bray
Chad is a senior business reporter focused on finance. He has previously written for The New York Times, The Wall Street Journal and Dow Jones Newswires.

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Friday, May 29, 2020

Heated Protests Against Police Killing Unarmed Black People Spread Across The Country Last Night

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