Students in Guy Fawkes masks march before the congregation ceremony at the Chinese University of Hong Kong on November 7, 2019 in Hong Kong, China.
Billy H.C. Kwok | Getty Images
Hong Kong protesters are planning a 24th straight weekend of pro-democracy rallies, including inside shopping malls across the Chinese-ruled city on Sunday, some of which have started peacefully in recent weeks and descended into violent chaos.
Protesters have also called for a general strike on Monday and for people to block public transport, calls that have come to nothing in the past.
The weekend starts with a rally on Saturday to mark the 30th anniversary of the fall of the Berlin Wall and a “support martyrs” assembly, both of which are likely to turn to protesters’ demands for universal suffrage for the former British colony.
Police granted permission for a gathering at Tamar park, one of the rare approvals for a protest in recent weeks.
Candlelight vigils mourning a student who died after a high fall during a rally in the early hours of Monday quickly spiraled into street fires and cat-and-mouse clashes between protesters and police on Friday.
Police fired one round of live ammunition to warn what they called “a large group of rioters armed with offensive weapons” who threw bricks at officers trying to clear street barricades in the Kowloon area on Friday night, the police said in a statement.
“The lives of the officers were under serious threat,” said the statement, which was released early on Saturday.
The death of the student at a hospital on Friday is likely to fuel anger with the police, who are under pressure over accusations of excessive force as the territory grapples with its worst political crisis in decades.
Chow Tsz-lok, 22, fell from the third to the second floor of a parking lot as protesters were being dispersed by police.
Students and young people have been at the forefront of the hundreds of thousands who have taken to the streets to seek greater democracy, among other demands, and rally against perceived Chinese meddling in the Asian financial hub.
Hong Kong returned to Chinese rule in 1997 under a “one country, two systems” formula, allowing it colonial freedoms not enjoyed on the mainland, including an independent judiciary and the right to protest.
China denies interfering in Hong Kong and has blamed Western countries for stirring up trouble.
Since June, protesters have thrown petrol bombs and vandalized banks, stores and metro stations. Police have fired rubber bullets, tear gas, water cannons and, in some cases, live ammunition.
Last weekend, anti-government protesters crowded a shopping mall in running clashes with police that saw a man slash people with a knife and bite off part of the ear of a politician.
Ex-US army official warns of ‘military accident’ amid US-China tensions
As relations between the U.S. and China continue to deteriorate, one immediate risk is a “military accident or operational miscalculation” between the armed forces of both countries, said former U.S. Army Lt. Gen. Karl Eikenberry.
“Do I worry about the risks that we have with the increasing geopolitical competition with China? … the answer is very much yes,” Eikenberry, also a former U.S. ambassador to Afghanistan, said Thursday.
Relations between the world’s two largest economies have soured in recent months, as both countries slap additional tariffs on each other’s goods amid a battle over trade that has spread to the tech space and concerns over national security. Despite multiple high-level trade talks, negotiations appear to have hit an impasse.
There have been several near military confrontations between the two nations, Eikenberry told CNBC’s Sri Jegarajah at the Morgan Stanley Asia Pacific Summit in Singapore. A Chinese destroyer and a U.S. navy destroyer almost collided in the South China Sea late last year, he said.
In 2001, when a U.S. naval aircraft collided with a Chinese naval fighter and was forced to land in Hainan, said Eikenberry. Another incident was in 1996, when the U.S. accidentally bombed the Chinese embassy in Belgrade during one of the wars in the Balkans. However, none of that led to a “large scale war,” he said.
“Those were very serious diplomatic incidents. But now — with the deterioration between the sides — should we have an incident like that today, I think the consequences will be much greater,” said Eikeinberry.
Increasingly, the technological rivalry between the two countries is taking center stage in the trade war.
The U.S. has placed Huawei on a blacklist amid allegations that products of the Chinese telecom equipment maker could be used as a backdoor by the Chinese government to spy on Americans. Huawei has denied those accusations.
Nearly 30 Chinese entities have also been added onto the U.S. government’s so-called Entity List, restricting these organizations from doing business with American firms.
He pointed out that over the last 25 years, technology has advanced tremendously in the consumer sector, and during that same period of time, the domains of warfare have expanded so dramatically as well.
“We’ve gone from land and sea warfare, to air-to-space warfare, to cyber warfare. And with this expansion of the domains of warfare, with new technologies merging, that (may) have implications,” said the former lieutenant general. “This is what I believe leads to what we call the securitization of economic exchange. So trade deals are no longer about balancing trade deficits its now much more about thinking about security.”
Longtime trader Louis Bacon to exit Moore Capital after 30-year run
Louis Bacon, founder and CEO of Moore Capital Management
Amanda Gordon | Bloomberg | Getty Images
Longtime trader and hedge fund manager Louis Bacon is planning to return capital to investors after 30 years of investment.
The step to privatize Moore Capital will mark the end of a storied era at the firm and follows years of weaker performance at the fund.
“The time is propitious to take a step I have eyed for some time and ‘privatize’ our three multi manager flag ship funds — that is to say returning client assets,” Bacon wrote in a letter to clients viewed by CNBC.
“Disappointing results of these funds of the last few years obviously inform this decision but our long term record is one we remain proud of,” he continued. “Intense competition for trading talent coupled with client pressure on fees has led to a challenging business model for multi manager funds such as ours.”
Moore has delivered a net annualized return of 17.6% and a cumulative return of over 21,000% since inception for its flagship Remington funds but has returned low-single-digit gains this year, the manager noted.
Bacon, who founded Moore in 1989 with a $25,000 inheritance from his mother, is considered one of the most successful traders of his era. Bacon popularized trading on a “macro” basis, making bets on everything from U.S. equity to European bonds and Asian currencies based on what he expected from the global macroeconomy.
In Moore’s first full year, his wager that Saddam Hussein would invade Kuwait generated an 86% return, according to a letter Bacon wrote to document his firm’s first 20 years. The letter also said that 13 years later, Bacon’s accurate predictions on the market events surrounding the Iraq war would buoy fund returns 35%.
His fund also successfully bet against Japanese markets in the early 1990s and at one point managed more than $10 billion.
The most recent decade, however, proved tougher for Bacon, who scrambled to match his historical returns thanks to persistently low interest rates. A Moore fund managed by Bacon reportedly declined almost 6% in 2018 amid two spikes in market volatility; another company fund overseen by other managers fell 3.3%, according to the Financial Times, which first reported Moore’s impending closure.
“Challenging trading conditions and muted returns for our macro multimanager funds of late masks a vibrant success at Moore in our Long/Short Equity platform, our Private Equity and Venture group, our Real Estate and our Speciality Lending businesses,” Bacon wrote in the letter to investors.
But he isn’t the only fund manager who has struggled in recent years.
Billionaire Leon Cooperman announced the closure of his Omega Advisors in summer 2018, telling clients that he doesn’t “want to spend the rest of my life chasing the S&P 500.”
Fellow billionaire Jeffrey Vinik, who made a name for himself running Fidelity’s Magellan fund, told CNBC last month that he was closing his hedge fund less than one year since its relaunch.
“It has been much harder to raise money over the last several months than I anticipated,” Vinik said in a letter dated Wednesday to investors.
“The climate for raising long-short equity hedge fund assets has been far more difficult than I expected, and performance of the VAM funds, while good … has not provided the necessary momentum to bring in our desired level of investments.”
— CNBC’s Leslie Picker contributed reporting.
Vietnam exporting more to US, but still isn’t a full China substitute
A mechanic works at factory in Hanoi, Vietnam.
Chau Doan | LightRocket | Getty Images
Vietnam may have appeared to replaced China in selling certain goods to the U.S., but the Southeast Asian country still has a long way to go before it can fully substitute China as a manufacturing hub for the world.
In the first nine months of this year, U.S. imports from Vietnam jumped 34.8% year on year, accelerating from a 5.8% gain in all of 2018, according to a Thursday note by consultancy IHS Markit. In comparison, U.S. imports from mainland China shrank 13.4% year on year in the January-to-September period, the note said.
Tariffs were a major reason behind the decline in U.S. imports from China, said Michael Ryan, IHS Markit’s associate director of comparative industry service, who wrote the note.
He added that Vietnam’s fastest growing export categories to the U.S. are computers, telephone equipment and other machinery.
Those products were among the U.S.’s top imports from mainland China, Mongolia and Taiwan in 2018, according to the United States Trade Representative. That suggests that Vietnamese exports of those goods to the U.S. may have replaced the reduction in flows between China and America.
Challenges for Vietnam
Vietnam is often named as one of the largest beneficiary of the trade war because of an increase in its exports to the U.S. In addition, Southeast Asian country has seen a jump in foreign direct investments from manufacturers looking to circumvent elevated tariffs between the U.S. and China.
But the U.S. has not invested in Vietnam in a big way, noted Ryan. He pointed out that American investments into Vietnam only accounts for 2.7% of total FDI the Southeast Asian country received.
One reason is the U.S. doesn’t have a free trade agreement with Vietnam and the broader Association of Southeast Asian Nations, according to the IHS Markit report. But that’s just “one of many factors tempering the pace and magnitude of supply-chain diversification” into Vietnam, Ryan said.
Vietnam is also faced with a shortage in skilled labor, he said. The country’s talent pool has not been able to support the influx of inquiries, as many multinational companies are looking to relocate parts of their manufacturing supply chain outside of China, he explained.
“Simply, demand is outpacing the current ability to supply,” he said, adding that infrastructure in Vietnam is not yet up to standards for many international firms to establish shops.
Specifically, that means finding local business partners and fulfilling government requirements to obtain permits could be major obstacles for foreign companies, according to Ryan. In addition, Vietnamese roads were poorly built and ports are already congested, which add to the time needed to travel and move goods around, he said.
“Taken in combination, these factors are lengthening the delivery cycle to consumers and point to a drawn-out process of extricating operations from mainland China’s orbit,” said Ryan.
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