Protesters occupy a main road and walkways during a rally against a proposed extradition law in Hong Kong on June 12, 2019.
Paul Yeung | Bloomberg | Getty Images
The Hong Kong government is set to suspend a contentious proposal to allow extraditions to mainland China after mass protests and street clashes shook the Asian financial hub in the past week, local media reported on Saturday.
The proposed bill, calling for Hong Kong to make legal amendments to allow accused criminals to be extradited to jurisdictions with which it has no such arrangement — including China — has led to widespread opposition in the semi-autonomous Chinese territory of 7.4 million people.
Public service broadcaster RTHK cited an unidentified source as saying the the government has decided to “suspend” the plan. The South China Morning Post carried a similar report that a pause was likely to be decided as early as Saturday.
RTHK said that Hong Kong Chief Executive Carrie Lam, the territory’s top official, would meet Saturday with pro-government legislators before holding a press briefing.
Shirley Lee, a government spokesperson, could not confirm the reports when contacted by CNBC for comment.
Hundreds of thousands of people marched in protest on June 9 and another mass rally has been planned for Sunday.
On Wednesday police fired tear gas and rubber bullets at protesters who gathered near the local legislature where lawmakers were supposed to debate the plan with scores suffering injuries.
Lam, the territory’s top official, has been defiant, vowing that the plan must proceed and condemning Wednesday’s demonstrations.
Hong Kong has for nearly 22 years been a semi-autonomous region of the People’s Republic of China with its own legal system and currency — legacies of its time as a British colony.
While the territory was guaranteed a high degree of control over its own affairs for at least 50 years under a “one country, two systems arrangement” after Britain ceded sovereignty to China on July 1, 1997, local unease over increasing mainland influence has steadily grown.
Foreign business groups and governments have come out against the plan amid concerns that any erosion to Hong Kong’s legal system could make it a less attractive place for banks and companies to operate.
It is not clear whether a delay in the plan would satisfy opponents, who have demanded it be scrapped and that Lam resign.
— CNBC’s Vivian Kam contributed to this report.
Spain needs to be a ‘motor for growth’ in Europe, vice president says
Spain is the latest European country to have a new coalition government after a period of political stalemate and uncertainty and the left-wing government will aim to focus on growth policies and addressing inequalities, the country’s vice president told CNBC.
“I’m extremely happy that we finally have a government, it took quite some time, it was not an easy time but we finally have a coalition government in Spain,” Nadia Calviño, one of four vice presidents in Spain, told CNBC’s “Squawk Box Europe” Wednesday.
“We are very clear about a continuity message. In the past 19 months, we have followed a policy based on three lines: fiscal responsibility, social sensitivity and structural reforms and these will be the three main guiding lines for us also in the coming years,” she said.
The coalition is made up of Prime Minister Pedro Sanchez’s party, the Spanish Socialist Workers’ Party (PSOE) and Unidas Podemos, a group of left-leaning parties led by Pablo Iglesias, who is known for his anti-austerity stance.
The joint government came about after Sanchez won snap elections in April and November 2019, but fell short of a majority and struggled to form a government. The inconclusive vote last fall led to the formation of this current minority coalition government, however, and it very narrowly won a parliamentary vote earlier this month.
As a minority coalition, the government will likely have to rely on smaller regional parties to pass laws. However, this could lead to political instability in Spain’s already fragmented political system.
Still, Sanchez and Iglesias (who is also a vice president) have some shared goals including plans to roll back some 2012 labor reforms under the previous Conservative government that supporters said make Spain more competitive, but whose critics say make many jobs more precarious. They have also signaled that they could increase taxes on higher earners and companies.
Speaking to CNBC at the World Economic Forum in Davos, Calviño recognized that a coalition government meant striking a balance between the different party approaches but said “the basic lines are common, are shared.”
“What we have signed with Podemos is a governing agreement which is very clear about striking the right balance of continuing growth, pursuing entrepreneurship, pursuing those reforms that we have been launching in the last few months and, at the same time, having a deep focus on addressing inequalities,” she said.
The European Commission forecast in November that Spain’s gross domestic product would expand 1.5% in 2020 and 1.4% in 2021, moderating a more robust trend seen in recent years. By comparison, the country’s GDP growth was 2.4% in 2018 and 1.9% in 2019.
There has been pressure on economies like Germany, seen as the euro zone’s growth driver and one which runs a large budget surplus, to spend more money in order to stimulate the wider sluggish European economy. But Calviño said every country has to look at its own policies to boost growth.
“Spain has been registering very strong growth for the past five years,” Calviño said. “We closed down last year in a slowdown environment, still at around 2% year-on-year growth, so Spain is one of the four larger economies (in the EU) and we need to play our part to be one of the motors for growth,” she said.
“I don’t think we should focus just on one country doing that job, we all have to undertake our reforms and ensure that we have solid sustainable growth in the mid-run.”
‘We have it totally under control’
President Donald Trump told CNBC on Wednesday that he trusts the information coming out of China on the coronavirus as the Centers for Disease Control and Prevention confirms the first case of it in the United States.
“We have it totally under control,” Trump told “Squawk Box” co-host Joe Kernen in an interview from the World Economic Forum in Davos, Switzerland. “It’s one person coming in from China. We have it under control. It’s going to be just fine.”
The CDC on Tuesday said a Snohomish County, Washington state, resident who was returning from China on Jan. 15 was diagnosed with the Wuhan coronavirus, which has killed nine people in China and sickened hundreds more.
Trump told CNBC he believes that Chinese President Xi Jinping and health officials there are going to continue to tell authorities around the world everything they need to know about the virus.
“I do. I do. I have a great relationship with President Xi,” said Trump, addressing a question about whether he’s concerned about transparency in China. “The relationship is very good.”
This weekend, the CDC and Homeland Security began screening people traveling to major airports in California and New York from Wuhan, China, where the outbreak is believed to have started. Health officials have also confirmed cases in Thailand, South Korea, Japan and Taiwan.
The coronavirus evoked memories of the 2003 outbreak of severe acute respiratory syndrome in China. SARS, which killed nearly 800 people worldwide, hit Asian cities such as Hong Kong, Singapore, Taipei and Beijing the hardest and triggered a severe economic downturn in the region.
Coronaviruses are a large family of viruses that usually infect animals but can sometimes evolve and spread to humans. Symptoms in humans include fever, coughing and shortness of breath, which can progress to pneumonia.
— CNBC’s Berkeley Lovelace contributed to this report.
Trump says GDP, Dow would be higher if it weren’t for the Fed
President Donald Trump on Wednesday said that the U.S. economy’s GDP growth would have been closer to 4% if it weren’t for the lingering effect of Federal Reserve rate hikes.
“That was a big blip that should not have taken place. It should not have happened. But it’s one of those things. But we had Boeing. We had the big strike with General Motors. We had things happen that are very unusual to happen,” Trump told CNBC’s Joe Kernen in an interview from the World Economic Forum in Davos, Switzerland.
The president also suggested that the stock market would be even higher than its already record-setting highs if the Fed hadn’t raised rates so quickly before cutting them three times during 2019.
“Now, with all of that, had we not done the big raise on interest, I think we would have been close to 4%,” Trump said. “And I – I could see 5,000 to 10,000 points more on the Dow. But that was a killer when they raised the rate. It was just a big mistake.”
The president has repeatedly taken the Fed and its chair, Jerome Powell, to task for raising rates too quickly, in his view. Trump nominated Powell to the role in November 2017, and the Fed raised rates four times in 2018.
The president’s remarks Wednesday echoed those his top economic advisor, Larry Kudlow, made to CNBC on Tuesday, when he predicted 3% growth in U.S. gross domestic product in 2020.
“This is a long cycle, and what you’ve got here in the Trump years is essentially a mini upcycle,” Kudlow said Tuesday. “You’ve gone from 1.5% to 2% growth. We had it going at almost 4%, then the Fed tightened.”
Manufacturing and trade data released this month suggested the American economy ended 2019 on a strong note. The economy is expected to grow more than 2% in the fourth quarter. That would represent a slowdown from the 2.9% increase in 2018, and 2% growth would still suggest the decade-old expansion is set to continue into this pivotal election year.
The Trump interview came hours after the first full day of impeachment proceedings wrapped up in the U.S. Senate and a day after Trump gave a speech to the World Economic Forum in which he boasted about U.S. economic gains under his watch.
Several observers said the address sounded like a campaign speech as the president seeks reelection in November’s election.
From a policy standpoint, Trump stood firm on his use of tariffs in trade negotiations, particularly as his administration looks to follow its so-called phase one trade deal with China with a second-phase pact. This stance has made business leaders in Davos skeptical that the two nations would reach an agreement before Trump’s term is up in a year.
—CNBC’s Thomas Franck contributed to this article.
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