Crypto News: Masks off

In announcing the end of one of the world's longest mask mandates, Hong Kong leaders declared the city is finally returning to normal. But for many in the former British colony, the city changed forever in July 2020 when the measure first took effect.

It coincided with Beijing imposing a national security law that has fundamentally altered a city with a proud history of protest, press freedom and vigorous debate. Three years later, key democracy proponents sit in jail and newspapers that criticized the Communist Party have been shuttered.

Key reading:

Authorities in Hong Kong are moving to revitalize an economy battered by Covid restrictions. Gross domestic product contracted in 2022 for the third time in four years, while the population has fallen by a net 187,000 in the past three years as residents left for other cities.

Hong Kong still has many positives to lure foreigners back. Taxes are low, nightlife is vibrant and the territory is blessed with great hiking trails and scores of beaches. Skyrocketing rents in nearby rival finance hub Singapore may push some expats to return. As long as money can be made, foreign companies will still operate in Hong Kong — just as they do in the mainland.

Yet even as the bars fill up, bands come to town and global executives start visiting employees they haven't seen in years, the old days aren't coming back.

It's now firmly established that loyalty to the Communist Party remains the key qualification for government officials, putting anyone who challenges Beijing at risk of being expelled.

As Hong Kong residents finally take off their masks, it's hard to ignore that Beijing has used the time to reveal its true face to the city. — Daniel Ten Kate

Passengers wear masks at MTR's Central station in Hong Kong today. Photographer: Paul Yeung/Bloomberg

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Strings attached | US President Joe Biden's administration warned companies seeking funding from the US Chips and Science Act that the money will come with limits, including on investing in other countries (namely China) and on stock buybacks. The $39 billion in incentives is aimed at helping pay for semiconductor factories in the US, but some of the biggest producers such as Intel are learning the risks of taking the cash.

Hard sell | After announcing a new post-Brexit deal with the European Union yesterday, UK Prime Minister Rishi Sunak now needs to convince skeptical unionist politicians in Northern Ireland to back it. It may be that Sunak has to rely on the main opposition Labour Party to get his deal through Parliament in what would be a potentially damaging move politically.

The deal underwhelmed investors, with UK stocks lagging the broader gains witnessed across Europe yesterday on assessments that it will have little immediate impact on the UK economy.

German Defense Minister Boris Pistorius will get at most half of the additional €10 billion ($11 billion) he wants to modernize the military after decades of underfunding, sources say. Despite a pledge by Chancellor Olaf Scholz to ramp up spending, officials say Germany may again fail to reach the NATO guideline of spending at least 2% of economic output on defense this year.

Domestic troubles | As Xi Jinping prepares to begin his second decade as China's president, he's facing a new phenomenon: a much more skeptical public. He will have a chance to start restoring confidence this week, when the rubber-stamp legislature meets in Beijing for its annual session. The event will give the public a chance to hear from his new right-hand man, Li Qiang, on plans to revive an economy growing at the slowest pace in decades, as well as the direction of foreign policy as US-China tensions surge.

A woman's killing in the central Chinese province of Henan prompted crowds to clash with local police, another sign that citizens are more willing to challenge authority in the one-party state.
Volkswagen says it's committed to an automotive plant in Xinjiang despite allegations of human rights abuses committed by Communist Party officials in the far western region against Uyghurs and other ethnic minorities.
China will welcome the leader of Russian ally Belarus today for a state visit.

Trump admirer | Former Brazilian President Jair Bolsonaro is set to address this week's Conservative Political Action Conference in suburban Washington where Donald Trump will appear as a speaker. Bolsonaro has been in the US for months, having failed to win reelection in October, and Luiz Inacio Lula da Silva's administration is considering ways to force his return to face investigations into his alleged role in inciting the Jan. 8 riots in Brasilia, a source says.

Bolsonaro speaks at a Turning Point USA 'Power of The People' event in Miami on Feb. 3. Photographer: Eva Marie Uzcategui/Bloomberg

Slow counting | Nigerian ruling-party candidate Bola Tinubu holds an initial lead in the race to become the West African nation's president, with results tallied in more than a third of its three dozen states, although outsider Peter Obi scored a major upset in winning the vote in Lagos, the country's commercial center. Severe delays by authorities in releasing results from Saturday's vote are spurring allegations by the opposition and election observers that the process is being mismanaged.

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Fox Corp. Chairman Rupert Murdoch testified that Fox News's popular commentators "endorsed" Trump's false claim that the 2020 presidential election was rigged, even though Murdoch said he doubted the conspiracy theory right away, according to a filing in a defamation lawsuit.
The leaders of Serbia and Kosovo moved closer to a deal on normalizing ties, under pressure from the US and the EU to end a dispute that has smoldered since the ex-Yugoslav states fought a 1998-1999 war.
Top energy officials from the US and UK meet today to discuss issues including energy security and the shift to renewables amid trans-Atlantic tension over green subsidies.
Colombia's education minister left the government in the first cabinet shakeup since President Gustavo Petro took office in August, as the leftist leader's radical plans for the pension and health systems alienate key allies.
Japanese Foreign Minister Yoshimasa Hayashi is unlikely to attend a meeting of G-20 foreign ministers in India from tomorrow, instead prioritizing parliamentary business, according to a government official.
Germany's government is accelerating efforts to merge four high-voltage grid operators as it seeks to modernize power lines for a coming influx of renewable energy, sources say — part of efforts to curb the dependency on Russian energy supplies and reach climate neutrality by 2045.

And finally ... Twelve years after one of the worst nuclear disasters in history shook Japan and turned the public against atomic power, a global energy crisis is encouraging a push to switch reactors back on. Faced with rising utility bills this winter after a summer spent worrying about blackouts, more people are reappraising the benefits of cheaper and more stable energy, including some who fear another radioactive disaster.