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With unrest in Hong Kong escalating, Beijing is weighing up the cause for forceful intervention. This article uses the cases of Soviet Union interference in Hungary in 1956 and Czechoslovakia in 1968 to claim that this would be a mistake. It would ruin Jinping’s image as a peacemaker amongst the Chinese and his long-fostered hopes for international leadership. Restraining from intervention, on the other hand, would have long-term benefits such as increased stability and a much-needed boost in confidence among Hong Kong citizens.
Why does this matter? With the unrest escalating in Hong Kong, now blocking roads and airports, sending in the troops is becoming increasingly appealing. We agree that the potential economic fallout between Hong Kong and Beijing would be devastating. We still predict some intervention, but it is likely to be milder, for example stationing Chinese police officers from a neighbouring province to work alongside HK officials.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)