Tag Archives: government

Foreign Investment Risk

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The People’s Republic of China seems about to illustrate one form of this risk.

The State Council, China’s cabinet, will soon announce new measures that subject many overseas deals to reviews of “strict control,” according to people with direct knowledge of the matter and documents reviewed by The Wall Street Journal.

Targeted for particular scrutiny by the pending measure are “extra-large” foreign acquisitions valued at $10 billion or more per deal, property investments by state-owned firms above $1 billion, and investments of $1 billion or more by any Chinese company in an overseas entity unrelated to the investor’s core business.

This is nothing but an overt attempt to restrict capital flows across the PRC’s borders.  Restricting such flows from one nation to another, no matter the rationale, elevates the risk of foreign investment.  The investor, whichever the nation of his domicile, cannot count on a reliable income flow from his investment or even being able to get his money back from that investment at the expiration of the arrangement.

Separately, it demonstrates an attitude toward law and government that’s been extant in the PRC and its antecedents for thousands of years: “I don’t like what you’re doing—this investment plan of yours—here’s a nice ex post facto law that makes your activity illegal.”

Freedom’s Just Another Word

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…as far as the PRC is concerned.

The good citizens of Hong Kong had elections for their representatives in the city-state’s Legislative Council, and two folks who participated in protests two years ago against PRC intrusion into Hong Kong government affairs were elected.

Never mind the voice of the people.  They have none wherever the PRC can reach.

The Standing Committee of China’s National People’s Congress said people elected to the city’s legislature cannot retake their oaths of office if their first attempt was invalidated for being insincere, not solemn, or deliberately misread.

Naturally, the ones who decide whether an attempt was insincere, not solemn, or deliberately misread are those of the PRC’s government and their puppets allies in the Legislative Council.  And so, Yau Wai-ching and Sixtus Leung are being barred—by the PRC—from taking their oaths of office, after their first attempt was blocked by the Council’s leadership because the two were too lippy to suit them, and before a Hong Kong court could adjudicate the matter.

So much for freedom in PRC satraps.  So much for the PRC’s commitment vis-à-vis Hong Kong, made as part of Great Britain’s handover of Hong Kong.

Mao-ist China Returns?

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People’s Republic of China President Xi Jinping has been consolidating his power and centralizing control of the PRC in his hands for a while.

Now he’s seizing more direct control of the nation’s economy.  Xi has removed Lou Jiwei, the PRC Minister of Finance from office.  Lou was “reform-minded” (read: more open and freely operating domestic markets with a more rational tax régime), but that conflicted with Xi’s demand for more government control over those same domestic markets.  Xi has reassigned Lou to run the nation’s pension fund.  The fund is in a disastrous condition; this is simply a move to set Lou up for failure and removal from government altogether.

Look for Li Keqiang, the PRC’s Premier of the State Council (so far) and nominal number two in the government, to go next.

All that’s remaining is to see whether these folks go into peaceful “retirement” or they’re given reeducation coursework to complete in a quiet rural environment.

Nor does this bode well for the PRC’s international behavior generally, nor does it indicate any interest in Xi’s improving relationships with American government officials.  This consolidation simply makes it easier for him to pursue his economic warfare against us through his government’s cyber attacks and cyber spying against our businesses, our nation’s economic infrastructure, and our nation’s government.

Right on the Law

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Great Britain’s High Court has ruled that Prime Minister Theresa May may not and can not trigger, on her own initiative, Article 50 and begin negotiations with the European Union about the mechanisms and details of Great Britain’s going out from the EU.  The Parliament must first vote in favor of invoking the Article.

Great Britain’s Supreme Court likely will hear an appeal of the ruling.  Upholding the High Court’s opinion likely will spell the end of Brexit for the near future and possibly permanently and the end of May’s government.  The former is because a majority of MPs want to stay in the EU and so can be expected to vote against invoking the Article.  The latter is because May (who opposed Brexit, also, but said she’d abide by the people’s vote) would be forced, if she’s a lady of her word, to seek a new set of MPs by dissolving her government and forcing early elections in an effort to get a collection of MPs more favorably disposed.

Likely, the High Court is right on the law.  The EU is a collection of treaties which Great Britain’s Parliament has ratified, and only the Parliament, not a popular referendum, can abrogate the treaties.  But the High Court is not right on law, and it’s not right on justice.

The people have spoken.  The courts may be bound by the letter of the law (though not as tightly so as American courts are, in theory at least), but the Parliament, if it must vote, would do well to remember that they work for the people, and so the MPs should vote accordingly rather than on the basis of their own petty opinions.

A Couple of Litmus Tests

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The two major party Presidential candidates have them.  All Presidents and candidates who wish to nominate Supreme Court Justices have them; some are more or less legitimate than others.

Democratic Party Presidential candidate Hillary Clinton’s wants:

The kind of people that I would be looking to nominate to the court would be in the great tradition of standing up to the powerful, standing up on behalf of our rights as Americans[.]

Read that again.  Clinton wants Justices who put social agendas ahead of the actual law before them, ahead of the text of the Constitution, ahead of the Justices’ own oaths of office, which swear them to uphold and defend the Constitution, not ignore it, or “reinterpret” it.

Republican Party Presidential candidate Donald Trump’s wants:

[Justices who would] interpret the Constitution the way the founders wanted it interpreted.

Notice that.  Justices who will do the opposite of what Clinton’s choices will do: rule on the basis of what the law and the Constitution actually say, rather than on what the Justices might wish had been said.

There’s just one more litmus test that I would add, one as general and carefully nonspecific as Trump’s: lose deference to the other branches of the Federal government.  The founders also wrote the Judicial branch as the equal of the Legislative and Executive branches.  No deference is owed, no deference is legitimate.  Deference subordinates what is intended to be a coequal branch of the government to the other two.  Besides, a law is Constitutional, or it is not; that does not depend in any way on who says it.   Further, a matter before the Court comports with the law and the Constitution on its merits, or it does not; that does not depend on who is bringing or defending the matter.

One of these two will be nominating Justices in the next term—at least one, likely three, and maybe four or five.  The next President will determine the tenor of the Court and the viability of our legal system for generations.

It’s clear which set of choices are better for the present and long term health of our nation.