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Philippe Metoudi: Why China’s billion dollar investment in Israel is only going to grow

Guest speaker Philippe Metoudi on Israel's relationship with China Guest speaker Philippe Metoudi on Israel’s relationship with China

China’s two-way trade with in Israel has gone from zero to US$4bn in the last three years, as the mainland seeks to position itself at the cutting edge of technological development, according to Philippe Metoudi, guest speaker at the October 25 club lunch.

Hong Kong’s Li Ka-shing has the largest investment in the Middle Eastern country – with more interests there than he has in the U.S. – but it appears online shopping giant Alibaba is also looking to invest significantly in Israel after owner Jack Ma bought Visualead, a QR code generator created in Tel Aviv. In fact, a growing number of China’s state-owned enterprises are acquiring Israeli tech companies, Metoudi said.

Why? In part because Tel Aviv is now widely considered second only to Silicon Valley in terms of its development of technology. And China’s powerful manufacturing capability at low cost is an attractive prospect for many Israeli firms, he said.

Metoudi, co-author of Israel and China: From Silk Road To Innovation Highway, recounted the long relationship between China and the Jewish state, a relationship set to prosper even further under President Xi Jinping’s plan to connect China with Eurasia – the so-called Silk Road Economic Belt – a feat Metoudi said could not be achieved without going through Israel. He said even Cathay Pacific was, from next year, going to introduce a new route to Israel for the first time.

But as far as Hong Kong’s tech start-up scene was concerned, the outlook wasn’t so rosy. Asked whether Hong Kong could catch up to Tel Aviv or even Silicon Valley, Metoudi said it was unlikely.

“There are two things lacking in Hong Kong. One is the mix of engineers. In Israel you get British engineers, Russian, French…” He said of the second: “A lot of people would be reluctant to be in Hong Kong due to the proximity of China.”

Having presented slides showing the China’s growing investment in Israeli companies, Metoudi concluded: “This is only the beginning. In five years I can guarantee that all the numbers I have shown you will be higher.”

Keith Richburg: In this digital age we need to get back to good, old-fashioned journalism

Keith Richburg recalls pivotal moments from his long career during the club lunch Keith Richburg recalls pivotal moments from his long career during the club lunch

Put down your devices, get out reporting and speak to real people: that was the advice of renowned foreign correspondent and former FCC president Keith Richburg as he addressed members at a lively club lunch exploring the internet’s effect on press freedom.

The former Washington Post Beijing bureau chief, who is now director of the Journalism and Media Studies Centre at HKU, said that while the digital revolution brought huge benefits in terms of instant access to news events, it also meant that journalism was suffering. Trying to be first with news is affecting the basic tenets of journalism, such as fact checking, he said.

“Lack of time is the enemy of journalists,” he told a packed meeting.

In a career spanning four decades, Richburg spoke of the rise of social media and how it had changed the way in which news organisations operate. He said that ‘people power’ uprisings in South East Asian countries including the Philippines during the 1980s had led him to form the opinion that other less open countries would follow. As the internet held democracies to account around the world, so it would also happen in China, he thought.

“But I was wrong,” he admitted.

Keith Richburg at the FCC. Keith Richburg at the FCC.

Richburg returned to Hong Kong in time for the handover in 1997. He was also FCC president at the time. As it turned out, the fear and angst of before the handover faded and, for a journalist, the lack of drama meant the handover story also faded quickly.

“The story of 1997 turned out to be the beginning of the Asian Economic Crisis,” he said. “It quickly led primarily to currency devaluations and a loss of faith in governments across the region. It also led to an upsurge of the kind of people-power movements that I thought I was going to see earlier [following People Power in the Philippines].

“You will recall it led to huge street demonstrations in Jakarta which eventually led to the fall of Suharto and the Reformasi movement in Indonesia; in Thailand it led to an outpouring of protests against the government of Chavalit Yongchaiyudh. He was toppled and the people pushed for what became known as the people’s constitution that was going to institutionalise change in Thailand.

“We were all swept up in this idea that the economic crisis was going to change the Southeast Asian political landscape.”

Richburg said that at the end of 1997 he wrote: ‘Just as democracy swept through Latin America and the former communist states of East Europe… East Asia too is in the midst of what many are calling a slow but steady move towards pluralism and openness.’

“I was wrong,” he said. “And a lot of what I wrote about has now been reversed in some countries – Thailand for example.”

When Richburg first went to China in 2009, through blogs and Weibo coverage he heard an obscure story about an entrapment operation looking for illegal taxis. So he went to Shanghai and found thousands of people protesting which led to the government backing down.

“I remember thinking ‘something has changed in China’; evidenced by the fact that I could hear about this hundreds of miles away and that the government actually responded to the Weibo pressure,” he said.

This led Richburg to focus on what was happening in China’s online world. “There’s the story of the blogger who looked at official photos where he focused on their wrists to see what watch they were wearing; pricing them and then matching that to officials’ salaries – disciplinary action followed for the officials.” Another blogger did the same for officials carrying handbags and brief cases into the National People’s Congress.

“It was sort of a people’s campaign against corruption,” he said. “I consider this as the free and open Weibo period where people could speak out to power and news could filter through. I thought it was never going to change back again – I was wrong.”

He cited two events in 2011 as having such a profound effect on the Chinese government as to give birth to Internet censorship as we know it today. The Arab Spring, which unfolded on social media as much as it did on an international news level; and the Wenzhou high-speed train crash, which the Chinese government moved to censor as soon as it happened; were two events that led to the government taking a hard line against Internet use.

“This really shook up the regime in China. What I did not anticipate was how effective they would be at this [censorship],” he said of the government’s Great Firewall and the many thousands of people it employs to ensure free speech is stunted, and its own propaganda is spread to “occupy the heights, to occupy this space”.

Richburg thinks his early predictions that the Internet would bring democracy to China and Hong Kong were most likely incorrect because “what’s happening here in Asia does not fit any model that we have had here before. A growing middle class makes countries more democratic was the model I studied. However,  China, and Thailand for that matter, has turned that around, where the new middle class want stability rather than democracy”.

Richburg said that back in 2000, President Clinton said that controlling the Internet would be like nailing Jello to the wall. “The jello is definitely sticking to the wall.”

Sticking to the theme of incorrect predictions, Richburg said that he had believed that incoming president Xi Jinping would usher in an era of less stringent controls on the people of China.

“Another one I got wrong,” he said, adding: “I remember writing that everyone was anticipating that Xi Jinping would be seen as a breath of fresh air. We all thought ‘wow, it’s going to be terrific when Xi Jinping takes over’”. Instead, he said, colleagues were lamenting the era of Hu Jintao.

When asked by an audience member what he thought of the rise of Wikileaks, Richburg said that data dumps still needed journalists to make sense of the information and put it out to the audience. He added that he thought that organisations such as the International Consortium of Investigative Journalists, which released the Panama Papers, were the future of journalism. “That is where I think we are heading. That is a model for the future.”

Richburg said that despite being wrong about the Internet in China and the notion that after 1997 it would be Hong Kong who changed China rather than the other way around – with China more interested in pushing One China rather than One Country, Two Systems – “in my defence I would say that I was in good company”.

He said that being naturally an optimist, he saw three grounds for optimism:

First, the level of political interest and engagement in Hong Kong which he hadn’t seen before, particularly the increasing engagement by young people.

Secondly, “I see all these new news websites, blogs and media platforms – not just in Hong Kong. Few are making money, but they are trying and should have our support.”

Third, the students he is teaching. “I am very excited to see so many being excited about journalism, particularly the numbers coming from the mainland – many of whom are journalists who are here to learn best practice in journalism.

“They are the ones who will be telling China’s story. So to arm them with fairness and objectivity for the future makes my decision to change hats [from journalism to academia] worthwhile.”

Hong Kong’s property market could be heading for another bubble, warns guest speaker Peter Churchouse

Peter Churchouse highlighted a bleak outlook for Hong Kong's property market Peter Churchouse highlighted a bleak outlook for Hong Kong’s property market

Hong Kong’s property market could be heading for another bubble, warned real estate expert Peter Churchouse, guest speaker at Wednesday’s club lunch.

The leading property market analyst said that 2016 activity indicates ‘the heat is coming back in to this market’, and added: “The risks in these markets are that we’re heading back into bubble territory.”

Having worked in real estate in Hong Kong for more than 30 years, Churchouse described the city’s property market as the most volatile in the world. He cited factors including the dollar peg and public policy as reasons for changeability. He said Hong Kong’s government had a vested interest in keeping land prices high because up to 30% of their revenue in recent years came from real estate.

He also levelled criticism at the government for pledging 90,000 new units in the city in the next three to four years, which Churchouse said was an overestimation.

The heat is coming back in to this market

“Over the years, going back to 1972/73, their forecasts have, on average, been out by about 30%,” he said, adding: “I will be extraordinarily surprised to see 90,000 units come to fruition.”

But his biggest swipe at the government was over plans to build in the city’s country parks, which Churchouse described as ‘a cop-out’.

His pessimistic outlook for Hong Kong’s real estate market followed a series of slides that mapped out its recent history. He spoke of how, at the time of SARS, 85% of all residential sales transactions were less than HK$3 million. Today that figure is 15%.

He warned the potential of a financial crisis in China was remote but real and would have a huge negative impact on local asset prices, adding after the talk ended that he believed China would go to great lengths to prevent a meltdown in the banking system.

Another concern raised by Churchouse was that the Federal Reserve appears to be at the start of a very gradual tightening cycle, which would have an effect on Hong Kong as it is pegged to the dollar.

He called for the government to scrap double stamp duty for commercial assets, calling it ’totally ridiculous and unnecessary’, and criticised the government controls on the market. He added: “If we see property prices corrected by 30, 40, 50%, we would see every reason for the government to roll back on those controls.”

‘King of votes’ Eddie Chu hopes for democratic self-determination majority in Legco within eight years

Newly-elected lawmaker Eddie Chu gave his first speech in English to the FCC. Newly-elected lawmaker Eddie Chu gave his first ever speech in English to the FCC.

Eddie Chu, the newly-elected lawmaker who gained the largest number of votes of all of Hong Kong’s constituencies in the recent elections, spoke of his hope to achieve a majority of seats for ‘self-determination’ candidates at Legco in the next four to eight years.

Fielding some tough questions from members of the international press who had attended an October 11 luncheon at the Foreign Correspondents’ Club of Hong Kong where he was guest speaker, ‘king of votes’ Chu said the only way for the city’s residents to have real bargaining power with Beijing over potential changes to the Basic Law would be to have the majority on the Legislative Council.

Eddie Chu speaks to a packed FCC audience. Eddie Chu speaks to a packed FCC audience.

Chu, who is fighting for democratic self-determination for the people of Hong Kong, told the audience that he felt obliged to step in and fill the ‘big hole’ that the Pan Democrats, whom he described as ‘falling apart’, had left in Legco. He said he wanted to build a bigger political network to fight China’s Communist Party that will forge more connections with pro-democracy groups in Taiwan, mainland China and Thailand, where activist Joshua Wong was recently denied entry.

The incoming politician, who spoke the day before he was due to take his oath, was asked by BBC reporter Andrew Wood what he would actually do with that self determination if he did manage to achieve a majority in Legco.

“Our situation is pretty much like Taiwan, so we have pro-unification and pro-independence. Within the camp of the Pan Democrats and also self-determination we have in our platform political ideas about autonomy, preservation of the environment and social welfare.”

However, he added that foreign press are generally more interested in the struggle for democracy rather than policies.

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