tv Business Deutsche Welle September 4, 2019 3:45pm-4:01pm CEST
this is business asia. office the chairman of cathay pacific airways dom's loss has become the 2nd top figure to resign from the hong kong based care after the airline c.e.o. had quit on aug 16th following pressure of ageing over participation of alan employees in anti-government protests meanwhile it has emerged that china is giving less business to hong kong due to its trade war with the u.s. as well as the ongoing pro-democracy protests that nearly half of respondents to the latest hong kong purchasing managers index reported lower demand from china the city has long been a financial hub for the mainland but it is also an offshore haven for many of china's elites as a new study shows and was suggest may force beijing's hand to be more lenient with hong kong protesters we want to talk to the author of that study in a moment but 1st this report. stocks have fallen the airport brought to a standstill business orders are now dropping protestors in hong kong are targeting
china by paralyzing its biggest financial hub. yet hong kong doesn't care the way that used to industrial mainland cities like one joe and change earn now rival its economic output. but hong kong separate legal and financial systems offer something those cities don't protection from beijing's reach for chinese political elites in need of sheltering cash that's no small consideration financial reporting in hong kong suggests that almost 60 percent of the $550000000000.00 in hong kong financial trusts comes from local and chinese sources that means party elites in china have other interests in hong kong besides the economy and that in turn could help shape beijing's response to the ongoing protests. and the author of that paper is under have been there she's with the global public policy institute in berlin and joins me in the studio welcome. so you say that china's elite will prevent
the chinese government from removing hong kong special status what exactly have you found and health how good is your evidence. ok so. what i do is that i studied a power relationship between offshore finance and the state and the relationship between china and hong kong is a perfect case study for that shit and so what i've found in the case of hong kong is that wealthy chinese indeed hold their money in trusts in hong kong hong kong as you said it's an offshore heaven so the idea is to make wealth invisible so it's always very difficult to find very hard evidence of who's holding which money how do they make that invisible how does that work with funds what how does that yes so what they're various different legal structures but their most famous one is a trust and to trust is the idea to distance the owner of something from what they
own so for instance shares or oddball cawood cash whatever you want to you put it in a trust you no longer legally the owner but you can name a beneficiary and that person can use the wealth in that in that trust as if they were the owner but since they're legally speaking not the owner they're not liable to taxation and it's different regulations so on so forth and the trust industry is very strong in hong kong they hold about 3 trillion. s. of management 3 trillion the us $1.33 so 10 percent is held in trusts and these $330000000000.00 do belong to chinese mainland how do you connect these 2 to the chinese mainland both the people. with the the dry means wealthy do not are not the beneficiaries of the trust all that well there's a dead children there cussons so usually it's family members that are the beneficiaries
so maybe also like a lover and there's someone like that. but there are 2 ways so one is that the hong kong monetary. artie's published a survey on private wealth management in the city and in that way you can find 330000000000 held in trust so this is reported so it's very likely that it's held by mine and chinese and hong kong chinese and then also we have leaks like the pentagon papers. international consortium of investigative journalists found that $16500.00. shell companies set up in hong kong on behalf of mainland chinese elite they could link those shell companies to family members of people who are part of the party the ruling party the communist yes and. so what you're saying is basically that the senior party members of the communist
party in beijing have money stashed away in hong kong what makes him so different impressions from mainland chinese investors. so what makes hong kong precious and unique it's on the one hand it's the. center like many others the city of london panama cayman islands in the region singapore of course. and so the way that works is you have to have a separate legal system and a separate monetary system which allows from the mainland which allows you to circumvent banking regulations tax laws and so on so forth and thereby to accumulate capital more quickly so you get richer more quickly but what makes hong kong special is that despite the separate legal and monetary system there on the chinese political controls a politically to money safer there than in any other and very briefly do you think
the lead has already been foreseen bridging sound. i think it's not correct to say that they forced beijing's hand i think what's correct to say is that the political and economic elites are so into living in china that the people who take the political decisions have a different private interest and they have a political interest and the interesting question is which one will prevail is that the political or the private interest i think the fact that. china or beijing particularly has been taking a step back today with missiles from taking back the expulsion of bill may be one result of these facts and i have been to thank you very much who is very interesting inside thank you. everyone knows that keeping a straight face is important when doing business in china you can even pay for your shopping with your facial features the country has a bracing facial payment technology despite privacy concerns.
shoppers strike a pose in front of a camera and smile into the point of sale machine the image links to a digital payment system or a bank account payment is made and the shopper walks out with their freshly purchase goods. in china mobile payment is already among the most advanced in the world but this makes paying even easier. it's convenient because you can buy things very quickly it's different from payment in the traditional supermarket in which you have to wait in the checkout line down. the designers of the system i for you go say it is extra safe because it avoids the need for a password with severe cases of which of the facial recognition payment is different we can complete the payment with our faces which is very important for the safety of our account. and. among the companies rolling out the new tech
is that we don't bakery it is facial payment machines and hundreds of stores across china so the usual i don't even have to bring a mobile phone with me i can go out and shop without bringing anything this was not possible either at the earliest stage of cash payment or mobile payment to those because with all. my free is mainly focused on unmanned stores others working on the tech include ali baba's financial pay which is devices in 100 cities it may mark a major technological advance but the software is not uncontroversial face recognition tech is already widely used to monitor dissent. and off to some of the other global business stories making the news today japanese car sales in south korea 57 percent in august from here earlier hit by a consumer boycott of japanese vehicles middle worsening diplomatic route between the countries south korean sales for 59 percent honda motor sales tumbled 81
percent according to industry day. indian prime minister narendra modi has arrived in the far eastern russian city of lot of a stock for 3 days just an economic for mali was greeted by russian president vladimir putin before the paddy parted by boat for further talks expected to discuss the 2 countries deepening operation in the oil and natural gas sectors. in the us car industry is in the middle of its worst crisis for many years carmakers are reacting to do. throttling production and laying off thousands of workers until recently the sector was a beacon of hope for in india's economy now not anymore what went wrong. the town of money on the outskirts of new delhi is home to marry biggest production plant india's number one automaker saw august sales drop over 30 percent year on year forcing it to slash jobs next morning give a get out because of the current recession companies have been cutting back and i
was on the lawn to last job he commuted so i can be forced to come here and seek work as a day laborer on the other side of a company even as india's economic growth slows consumers are buying fewer vehicles national car sales have been falling for 9 consecutive months it's the industry's worst crisis for 18 years millions of jobs could be at stake. and you would be supporting employment of 37000000 people that is the end of it so in this industry goes down everything is impeccable employment getting back here doing it for the coming years and frankly the unity of the country will get back to. going to busy decide this industry isn't a row for economy as a home business is all across minustah are now feeling the pinch they previously benefited from the launch number of migrant workers he would drawn here by the car industry but now those numbers are dwindling all the solve the. crisis is very
obvious here though my incomes are being cut in half we used to have a lot of labor is living here now they've left and there's no one to buy our stuff . out of. the domino effect means the problems of the car industry are affecting all businesses in the area pressure is growing on the indian government to do something to boost the economy as a whole. for me and the business before you go.
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i am. this is good news coming to you live from berlin hong kong climb down the long announces she's scrapping the controversial extradition bill that has sparked months of violent protests in the territory but really the move be enough to appease pro-democracy demonstrators. also coming up the richest violinist advance johnson comes out fighting the day after he suffers a defeat always brags that plans he challenges the opposition to agree to an election next month a day accuse him of trickery.