Cathay Pacific Airways Chief Executive Officer Rupert Hogg has resigned, a week after the Hong Kong-based carrier received a safety warning from the Civil Aviation Administration of China.

The board appointed Augustus Tang, 60, as Cathay’s new CEO, according to a statement from the company on Friday. Hogg, 57, resigned as a way of taking responsibility amid recent events, said the airline.

The airline also said Paul Loo had resigned as chief customer and commercial officer, to be replaced by the head of its low-cost arm Hong Kong Express, Ronald Lam.

This is regrettable as we have always made safety and security our highest priority. We therefore think it is time to put a new management team in place who can reset confidence and lead the airline to new heights

Cathay Chairman John Slosar

Cathay Chairman John Slosar said recent events had called into question Cathay’s commitment to flight safety and security and put its reputation and brand under pressure.

“This is regrettable as we have always made safety and security our highest priority,” he said in a statement. “We therefore think it is time to put a new management team in place who can reset confidence and lead the airline to new heights.”

Hogg said these had been “challenging weeks” for the airline and it was right for Loo and him to take responsibility as leaders of the company.

Hogg took the helm at the 72-year-old carrier just over two years ago, tasked with one of the toughest turnaround jobs in Asian commercial aviation. He was previously an executive with the Swire Group, the Hong Kong conglomerate and Cathay’s largest shareholder.

China’s aviation authority issued a warning to Cathay last Friday after the airliner reportedly continued to allow a pilot charged with rioting to fly.

The authority said on Thursday that the carrier has since complied with its demands following the warning.

Cathay’s stock hit a 10-year low Tuesday.

Summer 2019 will go on record as the hottest summer recorded history, but it will also be remembered as a summer of madness, with protests everywhere and violence on the boil.

Who would have expected South Korea to be quarreling with Japan? Or India taking away the autonomy of Jammu/Kashmir for direct rule by Delhi? Or the Argentinian peso dropping 30 per cent in one day? Why did the US put every one of their major trading partners, including Singapore, Malaysia and Vietnam on their watchlist of “currency manipulators”?

Nearer home, the biggest headlines go to the protests in Hong Kong, which shut down the airport and tanked the economy.

When I was a young man, I had a wise mentor who told me that I was hopeless, helpless and useless. Of course I was very indignant, but as I grew older, I realised that he was right. In the realities of life, most of we are but by-standers in the greater order of things, hopeless in the face of daunting change, helpless to make an impact, and useless as individuals to influence the complex evolution of local events that reverberate at a global scale.

The world looks like a total mess. Can anyone solve what is clearly a systemic problem?

The easiest thing to do is to blame someone else. But the blame game gets us nowhere. Escalating the blame game polarizes and hardens the position of both sides which makes compromise and return to normalcy harder.

Cooler heads and warm hearts are required to get to the next stage.

My old mentor, who was a hardened journalist, taught me that in order to understand the world, one has to read not what the news says, but what the news does not say. By doing so, you get a more balanced picture of what is going on.

With the rise of social media algorithms directing news, communities everywhere are being polarised because today’s news and social media paints everything in terms of black and white. Each side sees what they like, and shuts out what they do not like.

We see this trend in the US where the President openly calls the press that opposes him Fake News. We have arrived at a global situation like the bad joke describing the 2008 banking crisis: on the right hand side of the banks’ balance sheet, nothing is right, and on the left hand side, nothing is left.

No one seems to be in charge in this escalating multilateral disorder, heated up by climate change and local unrests.

Why have we arrived at this case of false binaries that life is only black or white, without understanding that reality is a million shades of grey? In protesting for freedom, the Hong Kong protestors do not appreciate that the worst freedom may be to eventually destroy their own freedoms. This is like the apocryphal US major during the Vietnam war who famously said that “it became necessary to destroy the town in order to save it”.

Can we rationally arrive at a compromise with irrationality? Or vice versa without violence?

There are many who offer sound technical solutions. A rational solution would be to take immediate action on addressing the social discontent that led to the protests, such as reducing inequality, increasing public housing, increasing incomes, spending more on education, healthcare, raising real wages, upgrading infrastructure and communicating more.

All these are great ideas, but if they are so good, why weren’t they implemented before?

The answer is the toxic nature of adversarial electoral politics. In the US, the Republicans decided to block everything proposed by the Clinton/Obama presidencies. So when the Republicans got into power, the Democrats in turn have decided to block everything the Republicans want to do.

Adversarial politics block the execution of any good technical solutions.

The same situation has happened in Hong Kong. Hong Kong has no shortage of land, rich fiscal resources and high income levels. Yet since 1997, few public housing projects have been built because these were blocked by the real estate interests and the opposition.

In short, a hard political solution will have to be made to determine whether the Hong Kong Government can ever deliver on social housing. In other words, deliver what the citizens want in real terms. Legitimacy comes from outcomes, not promises.

Adversarial electoral politics means that even if the Pan-Democrats win big in the next Legislative Council election, they will be blocked in delivery of any electoral promises by the new opposition.

The outcome is that the public will continue to be unhappy because the current political structure has none of the advantages of effective delivery through autocratic administrative means, but all the defects of democratic politics. For the good of Hong Kong, a bi-partisan consensus is the only realistic way forward.

We should not forget that the Hong Kong protests are fundamentally a family quarrel, for which unlike Brexit, there can be no divorce. No family quarrel is settled by breaking the family furniture and antiques, let alone through violence. Freedom to protest cannot be at the expense of disrespecting other people’s economic and sovereign rights.

The first order of business is to cool down the temperature and to think through how to fix the existing structure that does not have a good feedback mechanism on how the citizens are feeling until it is too late. That includes the role of social media in helping to shape a community consensus, not a break-up.

If the community itself will not compromise, then the hard decision will be made by the sovereign parent.

No one dreamt that the Hong Kong protests could reach this stage of looming uncertainty, in which even the future of Hong Kong’s rule of law is at stake. That is why I feel hopeless, helpless and useless, watching what I pray is not a tragedy unfolding.

In times of adversity, adversarial and emotional posturing gets nowhere. A family is a community of individuals. Either every individual, young and old, takes the long road together as a community, or else there will only be a broken family.

Andrew Sheng writes on global issues from an Asian perspective. The views are entirely his own.

Washington’s planned move seriously violates the consensuses reached between the two countries’ top leaders in previous meetings, and deviates from the right track of resolving differences through consultations, the commission said in a statement on Thursday.

Calling the new tariff plan “irresponsible”, Wang Wen, chief economist at China Export and Credit Insurance Corp, said the move is totally inconsistent with the direction needed to reach a mutually beneficial deal.

At the same time, the tariff proposal shows that Washington has turned a blind eye to the tremendous efforts made by both nations in advancing their economic and trade ties, Wang said at a recent seminar in Beijing.

The US announced the new tariff threat shortly after the 12th round of high-level trade talks in late July. If the plan takes effect, the US will put additional tariffs on basically all Chinese goods coming into the US.

On Tuesday, the Office of the US Trade Representative said it will delay 10 percent tariffs on certain Chinese products, including laptops and cellphones, until Dec 15.

Yang Weiyong, an economics professor at the University of International Business and Economics in Beijing, said the US tariff delay is more out of consideration for its own interests－creating sufficient time for its consumers and trading companies to look for substitute goods in other markets.

“Besides, the US did so because of concerns over the Christmas shopping season. The government intends to reduce the potential impact of tariffs on US holiday shopping,” Yang said.

But the US plan to merely delay some tariffs by no means shows Washington’s sincerity toward advancing future consultations, Yang said.

According to a Reuters analysis, the delay may encompass around half of the $300 billion list of remaining Chinese imports. Chinese imports subject to the tariffs as of Dec 15 totaled about $156 billion last year, Reuters said, citing US Census Bureau information.

Sun Lipeng, a research fellow with the China Institutes of Contemporary International Relations, said the US won’t be immune to the effects of its own trade bullying behavior.

Washington’s new tariff plan will further burden US consumers and dampen companies’ confidence in investment, dragging down the US economy, Sun said.

Non-oil domestic exports (Nodx) fell by 11.2 per cent in July, according to Enterprise Singapore data on Friday (Aug 16). Bloomberg pollsters had expected worse, tipping the Nodx drop at 15.4 per cent.

On a month-on-month basis, July exports reversed June’s 7.8 per cent fall with growth of 3.7 per cent.

Exports had plunged a revised 17.4 per cent year on year in June – the biggest drop since shipments sank 33.2 per cent in February 2013.

CIMB Private Banking economist Song Seng Wun said that June’s plunge could be “the bottom of the current cycle, but double digit declines might persist over the next few months”.

“Leading indicators such as orders are still weakening,” he said.

Year on year, electronic exports shrank by 24.2 per cent in July, following the 31.9 per cent drop in June, while non-electronic exports declined 6.6 per cent in July, easing from the 12.6 per cent fall in June.

The fall in non-electronic exports was led by pharmaceuticals (-32.7 per cent), specialised machinery (-31.3 per cent) and primary chemicals (-30.9 per cent).

Exports to all of Singapore’s top 10 markets fell as well, except to the United States. Leading the decline were falling shipments to Japan, Malaysia and Hong Kong.

Exports to emerging markets also declined by 29.6 per cent last month, following a 17.0 per cent fall in June.

Selena Ling, head of treasury research and strategy at OCBC Bank, said the US market remains insufficient to buffer the Nodx declines in the other major markets. She noted that the driver for Nodx to the US market came from non-electronics exports (+18.3 per cent) whilst electronics exports remained weak (-8.8 per cent).

Going forward, she said the “macro headwinds remain intact for now”, referring to the ongoing US-China trade war stalemate, heightened uncertainties over the tech cycle, the rising risk of a no-deal Brexit and persistent protests in Hong Kong.

Said Ling: “Nodx has already contracted 10.7 per cent year on year for the first seven months of this year and we expect Nodx growth to remain weak around -8.1 per cent to round up the full-year 2019 Nodx growth to -9.7 per cent. If this materialises, it will be the worst full-year Nodx performance since 2009 when Nodx fell 10.5 per cent.”

Enterprise Singapore on Tuesday slashed its full-year Nodx forecast to -9 to -8 per cent from -2 to 0 per cent after Singapore’s export slump deepened in the second quarter, with Nodx contracting by 14.6 per cent.

Online retail sales surged 17.8 per cent year-on-year in the first half, accounting for nearly 20 per cent of the overall retail sales of consumer goods, official data showed.

The healthy data are a reflection of the country’s increasing consumption power, the department of electronic commerce and informatization at the Ministry of Commerce said during a media briefing in Beijing.

The significant growth in online retail sales has largely been driven by the booming business-to-consumer online retail business, blossoming e-commerce business in rural areas and the fast-growing cross-border e-commerce sector, according to the ministry.

During the first half, B2C online retail accounted for about 75.8 per cent of the online retail market, a 4.1 percentage points rise from the same period last year. Specifically, sales of consumer goods such as cosmetics, smart homes and healthcare products increased rapidly, with year-on-year growth exceeding 30 per cent.

Chinese major e-commerce platforms continued to break records in online sales during this year’s June 18 shopping festival held from June 1 to 18. JD said sales for the 18-day festival period hit a staggering 201.5 billion yuan, compared with 159.2 billion yuan in 2018.

Alibaba also reported strong sales for the annual shopping event, with more than 110 brands on its Tmall platform reporting a turnover of over 100 million yuan.

Statistics from the Ministry of Commerce showed online retail sales in rural areas reached 777.13 billion yuan in the first half of this year, up 21 per cent year-on-year. Agricultural products’ online retail sales amounted to 187.36 billion yuan in China in the first half, with a year-on-year increase of 25.3 per cent.

According to the ministry, cross-border e-commerce maintained rapid growth in China. In the first half, major cross-border e-commerce platforms witnessed over 20 per cent year-on-year increase in sales of online retail imported goods. The top three countries from which China imported goods are Japan, the United States and South Korea. And some of the country’s top imported goods are cosmetics, cereals, oils and foodstuffs, and daily necessities.

Eastern China topped all other areas in online retail sales, followed by the central, western and northeastern regions, according to the ministry. Large cities have seen a significant jump in retail sales of fresh food, cosmetics and pet supplies. The retail sales of clothing, auto supplies and household appliances increased rapidly in small- and medium-sized cities and rural areas.

“In recent years, consumers in China have been seeing rising incomes, catapulting millions into the new middle-income group,” said Monica Peart, senior forecasting director at research firm eMarketer.

According to eMarketer’s recent worldwide retail and e-commerce forecast, China is poised to surpass the US to become the world’s top retail market in 2019. The report said China’s overall retail sales will rise 7.5 per cent to $5.64 trillion, compared to US$5.53 trillion retail sales.

Peart noted in the report that the result has been a marked rise in purchasing power and average spending per person.

EMarketer said e-commerce is a major driver of China’s retail economy. E-commerce sales are estimated to increase more than 30 percent to $1.99 trillion in China this year, accounting for 35.3 per cent of the country’s retail sales. The US lags far behind, with only 10.9 per cent of its real sales occurring online.

Peart said relative newcomers and multichannel retailers will continue to take share from Chinese e-commerce giants Alibaba and JD.

“The mature players have set their sights on further international expansion. Smaller local players are finding their niche in the Chinese e-commerce market by integrating WeChat and using online-to-offline data to better target consumers.”

China has to resort to counter measures if the US imposes a new 10 percent tariff on $300 billion Chinese imports, the Customs Tariff Commission of the State Council said on Thursday.

http://www.chinadaily.com.cn/a/201908/15/WS5d5527fea310cf3e35565fc1.html

“Persons are also restrained from attending or participating in any demonstration or protest or public order event in the airport other than in the area designated by the airport authority,” it said.

The airport resumed normal operations on Wednesday, rescheduling hundreds of flights that had been disrupted over the past two days as protesters clashed with riot police in a deepening crisis in the Chinese-controlled city.

Ten weeks of increasingly violent clashes between police and pro-democracy protesters angered by a perceived erosion of freedoms have plunged the Asian financial hub into its worst crisis since it reverted from British to Chinese rule in 1997.

About 30 protesters remained at the airport early on Wednesday while workers scrubbed it clean of blood and debris from the night.

Check-in counters reopened to queues of weary travellers who had waited overnight for their flights.

It was unclear whether the airport would again be targeted later on Wednesday, according to Agence France-Presse.

Police condemned violent acts by protesters overnight and said that on Wednesday, a large group had “harassed and assaulted a visitor and a journalist”. Five people were detained, bringing the total number of people arrested since the protests began in June to more than 600, police said.

Hong Kong’s Airport Authority said on Tuesday that operations at the city’s international airport had been seriously disrupted, as riot police used pepper spray to disperse thousands of black-clad protesters.

The Hang Seng stock index fell to a seven-month low on Tuesday and embattled Hong Kong leader Carrie Lam said the city had been pushed into a state of “panic and chaos”.

China condemned some protesters for using dangerous tools to attack police, saying the clashes showed “sprouts of terrorism”. The protests represent one of the biggest challenges for Chinese President Xi Jinping since he came to power in 2012.

Demonstrators say they are fighting the erosion of the “one country, two systems” arrangement that enshrined some autonomy for Hong Kong when it returned to China in 1997. The protests began in opposition to a now-suspended Bill that would have allowed the extradition of suspects for trial in mainland China, but have swelled into wider calls for democracy.

Check-in operations at the airport were suspended late on Tuesday afternoon, a day after an unprecedented shutdown. Thousands of peaceful protesters swarmed the arrivals and departures halls earlier on Tuesday, chanting, singing and waving banners.

However, some protesters used luggage trolleys to blockade the doors to customs checkpoints. Protesters also scuffled with police later in the evening and several police vehicles were blocked amid heated scenes, according to Reuters witnesses.

This is the first time police have shown up at the airport during multiple days of sit-in protests, which have been largely peaceful.

The interruptions follow a weekend of violence that saw police fire tear gas into a subway station and shoot rubber bullets at close range.

Lam warned on Tuesday that the city risked sliding into an “abyss” as continuing unrest weighed on the economy.

The US unilateral and groundless labelling of China as a “currency manipulator” indicated the escalating Sino-US trade friction, but the Chinese economy’s strong resilience, rooted in its huge domestic market and complete industrial sectors, will support it, they said at a seminar in Beijing.

“A fundamental change in the Chinese economy is that its growth is mainly driven by the domestic market nowadays. The Chinese economy ran smoothly during the first half of 2019 with the balance of international payments, checked financial risks, and a stable renminbi exchange rate,” said Wen Bin, chief analyst at China Minsheng Bank.

“It is neither necessary nor likely that China will use the exchange rate to cope with trade disputes.”

The renminbi’s exchange rate against the US dollar will likely move within a reasonable level with two-way fluctuations, he added.

Zhang Xuechun, deputy director of the research bureau of the People’s Bank of China, said the US labelling of China as a “currency manipulator” contradicted criteria of its own and basic economic principles, and went against the International Monetary Fund’s assessment of the RMB exchange rate.

The latest report by the IMF said that in 2018 the exchange rate of the Chinese yuan had been broadly in line with sound economic fundamentals for the medium term and that China’s monetary authorities had barely intervened in the foreign exchange market.

Since the US escalated trade friction with China, the global economy has been suffering, Zhang noted, adding that as long as China runs its own affairs well, including deepening supply-side reform, the Chinese economy will continue to develop healthily.

“No country will quit a huge market with 1.4 billion people so long as the fundamentals of our economy are stable, and we are firm with our strategies and keep opening up in an orderly manner,” she said.

Wen also said China needs to further deepen reform and its opening-up to pursue high-quality economic development against the backdrop of possible punitive measures by the US in the future.

In the short term, it is important to adhere to a proactive fiscal policy and prudent monetary policy, and enhance policy coordination and flexibility, he said.

Policymakers should work on reducing real interest rates in order to promote investment and consumption and boost domestic demand, he said.

Martin Petch, senior credit officer at Moody’s Investors Service, said while the “currency manipulator” designation is unlikely to have a material effect on China’s foreign exchange policy, it is expected that the positions of both countries on the trade dispute will harden.

“More broadly, worsening trade and currency tensions between the US and China will curb global growth. Market expectations of further declines in the renminbi may also lead to devaluation in other currencies, particularly those which have strong trading ties with China,” he said.

“Such an escalation would increase risk aversion and could lead to an abrupt repricing of risk assets globally. Tighter financial conditions, notwithstanding the US Federal Reserve’s more accommodative policy stance, would drag global growth significantly lower. Spillovers on investment and through the global production chain would be much larger.”

According to a statement issued by the Airport Authority on Wednesday at 8.30am, the injunction order prohibits any person from unlawfully and wilfully obstructing and interfering with the proper use of the airport.

The authority is in the process of obtaining sealed copies of the injunction order, it said.

In a press statement, Hong Kong International Airport said all check-in service for departure flights had been suspended since 16:30 pm. “Other departure and arrival flights for the rest of the day will continue to operate, and airlines will provide arrangements for passengers who have not completed the departure process,” reads the statement.

More than 300 flights were cancelled as of 3.30 pm Tuesday as thousands of protesters occupied the airport’s main terminal for the fifth consecutive day. After filling up two separate arrivals halls, demonstrators have streamed into the departure area despite increased security measures designed to keep them out.

Passengers struggled to get past the sitting protesters and into the immigration section.

On Monday, Beijing said protests that have swept the city over the past two months have begun to show “signs of terrorism”.

Despite the airport reopening, Hong Kong flag carrier Cathay Pacific said it had cancelled more than 200 flights to and out of the airport on Tuesday, according to its website. Cathay also said it had suspended with immediate effect on Tuesday a second officer operating flight CX216 for misuse of company information, and had also commenced internal disciplinary proceedings.

According to an Air China statement, the carrier on Tuesday cancelled six flights from Hong Kong to Beijing and other mainland cities, and seven flights from those cities to Hong Kong. China Eastern, another major mainland carrier, cancelled six flights between Hong Kong and mainland cities.

“The AA has noticed that there are calls online for public assembly in the airport this afternoon,” the authority said in a statement Tuesday. “The AA will work closely with its business partners with a view to gradually resuming normal airport operations as soon as possible.”

The Airport Authority Hong Kong started rescheduling flights at 6 am on Tuesday. The authority urged passengers to confirm if flights were on schedule before heading to the airport.

When contacted over the telephone in the morning, an Airport Authority official could not share information about measures to address the massive sit-in that may continue for another day.

Secretary for Transport & Housing Frank Chan said in a press conference Monday the decision to suspend operations at Hong Kong International Airport had been made owing to concerns over aviation safety and the safety of passengers and airport staff.

ALSO READ: All flights canceled as protesters flood HK airport

Most protesters had left the airport shortly after midnight.

“Hong Kong International Airport will implement flight rescheduling today with flight movements expected to be affected,” reads a notice published on the Hong Kong International Airport’s official mobile app on Tuesday.

Cathay Pacific said it would only operate a limited number of flights for connecting passengers. Airport flight boards showed the likes of Emirates Airline and Virgin Australia had flights scheduled to depart on Tuesday.

Beijing on Monday said protests in the Asian financial hub, which started as opposition to a now suspended extradition bill, had reached a “critical juncture”.

“Protesters have been frequently using extremely dangerous tools to attack the police in recent days, constituting serious crimes with sprouts of terrorism emerging,” said Hong Kong and Macau Affairs office spokesman Yang Guang in Beijing.

READ MORE: Lam urges public to pause and think of city’s situation

Hong Kong is the 8th busiest by passenger traffic, handling 73 million passengers a year. The airport has been filled with anti-government protesters for five days.

A Reuters reporter saw more than 100 travellers queuing up at Cathay’s ticketing counter early on Tuesday.

A woman surnamed Chan, who is a retail store assistant at the airport, told China Daily her employer asked that the shop be closed at 2:40pm due to safety concerns. The usual closing time is 11 pm.

She said the store saw few customers these days. Chan said it was not easy for ordinary people to make a living and she hoped protesters could take people’s livelihood into consideration first.

A tourist from Taiwan surnamed Lin was supposed to fly out of Hong Kong with her two children and an elderly relative on Monday. When interviewed by China Daily, Lin told the family’s flight was rescheduled to take off at 4:30 pm on Tuesday.

Lin said the family had spent the night at the airport and was eager to go home as soon as possible as people were worried about their safety back home in Taiwan.

“The way to handle last night was chaotic,” said Kate Flannery from Australia, who was travelling to Paris. “The airport authority didn’t deal with the situation. I felt like I was walking around and nobody gave us information.”

A Cathay customer officer at the airport, who declined to provide his name, said that nearly all of the airline’s flights were full.

The airport, one of the world’s busiest, blamed demonstrators for halting flights on Monday. The Airport Authority cancelled all outbound and inbound flights after 3:30 pm on Monday after a large number of protesters seriously hindered operations.

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