Daily Archives: 31 December 2020

Investing in the PRC

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For good or ill, the People’s Republic of China has decided change the regulatory rules regarding Alibaba Group Holding Ltd’s banking activities. The company has lost

almost all its stock-market gains this year, just days after [PRC] regulators signaled a major change in their posture toward the e-commerce behemoth and its finance affiliate, Ant Group Co.

Notice that: the regulatory change does not cover the PRC’s banking or finance industries—it’s explicitly targeted at Alibaba’s subordinate, Ant. The PRC’s

central bank released a harshly worded statement Sunday criticizing Ant’s business practices and instructing the financial-technology giant to shift its focus back to its mainstay—and less lucrative—digital-payments business.

Notice that, too: the ruling is not the outcome of any sort of investigation, followed by trial in court to assess whether anything wrong actually was being done, followed by a court ruling based on the presented evidence. No, the order is government diktat.

Investors, unwarned by the existence of an investigation or subsequent existence of a court trial, have lost heavily. The only warning investors had was a Christmas Eve announcement of an investigation—and then came the diktat.

Alibaba’s swift comedown has led investors to reassess the regulatory risks faced by [PRC] internet companies…
The hard part is figuring out “how much of the recent regulatory moves against Ant and Alibaba is politically based, how far it will go, and when it will be over,” said Alex Au, managing director at Alphalex Capital Management, a Hong Kong-based hedge fund.

Yewbetcha.

This is what rule by law does, as compared to rule of law. This is why it’s foolish, potentially to the point of violating fiduciary responsibility, to invest in PRC businesses.

Remember this for the coming year.

In Which the Supreme Court Gets One Right, Sort Of

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The Supreme Court has ruled, for now, that the Trump administration’s policy of not allowing census-counted illegal aliens to be included in States’ post-census Federal Congressional reapportionment decisions can stand.

Following its ruling earlier this month that allowed the Trump administration to remove illegal aliens from the 2020 Census count, the Supreme Court on December 28 threw out two lower court decisions that went the other way, that barred the government from eliminating that population from the process of allocating congressional seats and Electoral College votes that officially determine the presidency.

The two tossed cases were Trump v Useche and Trump v City of San Jose. Notice that these address two separate, albeit related, matters. One is counting illegal aliens during the census itself; the other is whether State populations of illegal aliens can be used in setting the seats each State is allocated in the Federal House of Representatives and from that each State’s Electoral College representation.

California Attorney General and Joe Biden’s wish for HHS Secretary Xavier Becerra (D) insists,

[a] complete, accurate census is about ensuring all our voices are heard and that our states get their share of resources to protect the health and well-being of all of our communities. We remain committed to the core principle that everyone counts.

This, too, addresses two separate matters. Becerra is right, of course, about one of those matters, just not in the way he thinks. All of our voices—the voices of all of us who are citizens of the United States and of the particular State in which we reside—should be heard. Our voices should not be drowned out, or even diluted, by the voices of illegal aliens. Illegal aliens are not citizens; they’re not entitled to Federal government representation, and they shouldn’t be allowed to water down the representation of us citizens.

The other matter is this. Illegal aliens not being excludable from the census itself has perhaps legitimate implications for Federal transfers to the States for Medicare and other welfare fundings. It may be that taxpayers shouldn’t be held liable for the upkeep of those who announce from the jump their disrespect for our laws by breaking into our nation. On the other hand, we have our Judeo-Christian obligation to help those less well off—including those illegal aliens who have come from far direr straits: the difference between stealing a loaf of bread because the thief can, and stealing the loaf to feed his family.

Of course, the liberal, Living Constitution Says What We Say It Says wing dissented. Justice Stephen Breyer’s dissent in Useche, joined by Justices Sonia Sotomayor and Elena Kagan, and carried forward into this dismissal centered here:

The plain meaning of the governing statutes, decades of historical practice, and uniform interpretations from all three branches of Government demonstrate that aliens without lawful status cannot be excluded from the decennial census solely on account of that status.

That dissent does not address the use of populations of illegal aliens in apportioning State representation, only whether the illegal aliens can be counted in the first place. The dissenters will get their chance to argue again, though: the Supremes rejected the lower courts’ rulings on technical grounds, not on the merits of the issue.

Be heads up.

The Supremes’ order can be read here.