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The China Model Delusion and the West’s Useful Idiots—Former Hong Kong Apple Daily Columnist Simon Lee

“Jimmy [Lai] once told me, ‘The fight for freedom is a very lonely pursuit … You have to be prepared to be very lonely.’”

Simon Lee was a successful businessman in Hong Kong and a columnist at Jimmy Lai’s Apple Daily newspaper for over a decade before he was forced to escape Hong Kong.

We discuss Hong Kong’s future and the deadly illusion of “the China model.” From draconian zero-COVID lockdowns to a real estate bubble collapse worse than the 2008 financial crisis, Simon Lee breaks down what he sees hidden between the lines of Beijing’s propaganda messaging.

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Jan Jekielek:

Simon Lee, such a pleasure to have you on American Thought Leaders.

Simon Lee:

It’s my honor.

Mr. Jekielek:

Simon, you’re from Hong Kong, and you worked for Apple Daily. What are your thoughts right now about what is happening in Hong Kong?

Mr. Lee:

Wow. Long story short, for a very long time, everyone said Hong Kong was the most free place on earth and we never pondered the question of why Hong Kong is the most free place on earth. I’ve been thinking that in Hong Kong, freedom is actually very fragile. It was under very unlikely circumstances that Hong Kong became the free place that we know. When the circumstances changed, that reality changed. We had this saying a long time ago, Hong Kong is a borrowed place on borrowed time. Perhaps that overdrawn credit has been recalled by China, unfortunately.

Mr. Jekielek:

Let’s talk about Jimmy Lai. Of course, as we speak, he’s in jail.  You probably have other friends who are in prison for not following rules that did not even exist just a few years ago.

Mr. Lee:

Jimmy once told me the fight for freedom is a very lonely pursuit. He said you have to be prepared to be very lonely. There is another thing I vividly remember him saying when I was leaving Hong Kong. I sent Jimmy a text message, and I told him, “Sorry, I don’t feel safe staying in Hong Kong. I’m leaving and I’m not writing anymore, because I don’t see the point.”

“If I cannot change Hong Kong through writing, then why should I write? And I am putting people in danger, just because of what? I cannot find a reason to keep on writing. I’m giving up and I’m leaving Hong Kong. I’m sorry.” And Jimmy was actually quite supportive. He said, “No, you should leave. It is not safe.” I asked him, “Why are you staying?” He said,  “I cannot leave, because that would send a very wrong message to the world that Hong Kong people are giving up. I cannot give up.” In some other interviews, he shared the sentiment that Hong Kong had given him everything, and it was time to give back to Hong Kong.

Mr. Jekielek:

This is very interesting. He understood that he was a symbol for people, and that he had to be true to that.

Mr. Lee:

He knew it very well. He knew that in every movement, there are some things that you cannot give up. You cannot give up the fight, and you cannot give up the moral high ground. Jimmy said repeatedly, “It has to be peaceful resistance. It has to be civil disobedience. You must not be on the wrong side of history.” If I have to think of a bright side to this story, I will say that in the 17 years that I worked with the gentleman, he was almost always ahead of the times on so many things, especially in business. When he had these brilliant ideas, he was usually ahead of the times. So much so that the technology was not even available at the time. I remember in 2008 he said, “Everyone will be fascinated with virtual reality and 3D animations. We have to have the capability to create these 3D-generated icons, so that people can represent themselves in videos with these icons.” So, he spent a crazy amount of money to create a 3D animation studio.

That was in 2008. Only 13 years after what he had imagined, Meta came up with this plan to create the Metaverse, which basically was Jimmy’s conception of the future of the internet. So, the guy was always ahead of the times. And I should have hope that he is also right this time and by not too far a margin, just hopefully a few years ahead of the time when this resistance will bear fruit.

Mr. Jekielek:

You say that he was always ahead of the pack, so to speak. Is it fair to say that Hong Kongers in general didn’t really understand what the CCP’s end game was, ultimately?

Mr. Lee:

CCP has its own end game, which is very different from how Hong Kong people see that end game. I’ll give you just one example. For a very long time, whenever people mention one country, two systems, they thought it was intended to make Hong Kong people feel comfortable about becoming part of China again. You will have your two systems, so don’t worry, but we must insist on one country. That was most Hong Kong people’s understanding of the idea. But after these 2 or 3 years, my understanding is that one country, two systems is a firewall protecting the one country and the one system that they have.  At the same time, they can have access to the international capital market through Hong Kong. That is the other system that they need. So, it is a firewall that protects China from changing itself, because most of the time, if you need to access to the international financial market, you have to change your rules.

But under one country, two systems, China does not need to change anything. So what happened is China successfully transformed its state-owned sector, and modernized it without changing the totalitarian culture of the nation. Actually, it became even more totalitarian than before. All thanks to the one country, two system policy. This firewall protected the China system, but gave them the resources from the international capital market. That is the one country, two system. Now, the reason why they say, “The one country, two system policy has to change,” is because they changed the game plan. And Hong Kong people were still believing that one country, two systems was about the 7 million people’s comfort zone. No, it had nothing to do with your comfort zone. It is their comfort zone that matters.

Mr. Jekielek:

On this show, we often talk about how the progressive vision of the world or the communist vision of the world redefines terminology to mean something completely different, even the word racism, for example. You believe you’re talking about stereotyping people based on race. But no, actually, the progressives are talking about something completely different when they say the word racism. This is the exactly what happened with the meaning of, one country, two systems. I have never heard it described this way.

Mr. Lee:

The Chinese Communist Party sees things very differently from the world. Let’s take COVID as an example, because everyone has experience with COVID. When COVID started, China was only concerned about one thing—how could they capitalize on this crisis to show the world that China’s system is superior to the rest of the world. At the early stage of COVID, at the first or second wave of COVID, China built a quarantine hospital in a week. Then, they propagandized the achievement as being this Chinese efficiency. When other countries locked down, they said, “No, our way is the way to go. We know how to control this virus from spreading. You countries in the West should learn from us on how to manage this virus” So, whenever other countries locked down and failed, China said, “Look, this is the failure and the weakness of the Western democratic institutions, because you cannot get things done.” This is how they see things. 

Mr. Jekielek:

There’s a huge irony in this, because these lockdowns are the absolute worst possible policy that you could enact to deal with this virus in the first place. So it’s kind of fitting what you are describing here. But somehow they fooled the rest of the world. Maybe some people wanted to believe that this was a good way to go.

Mr. Lee:

In the later stages, the rest of the world began to ask questions like, “Hey, where does the virus originate from to begin with?” China was so delusional that they tried to put out this fake news and propaganda campaign about the U.S. troops joining the Military World Games in 2019 and spreading the virus. There were all kinds of fake news coming from China’s official state-owned propaganda machine. 

Fortunately, the world didn’t buy into this BS. Then, what happened was China insisted on the new zero-COVID policy. This is how I see zero-COVID. China insisted on zero-COVID, because they want to tell the world that if you have people dying from the virus, it was because your government is incompetent. But look at what China has done. We have zero-COVID. So, it is possible to have people surviving this virus as long as you have a strong government. They still insist on promoting this authoritarian framework to the world. I think the world has learned some lessons. The world is now not only immune to COVID, the world is actually more immune to this crazy idea that you need a strong government to keep people healthy.

Mr. Jekielek:

I hope you’re right. 

Mr. Lee:

Yes, I hope I’m right.

Mr. Jekielek:

A lot of people believe that this type of policy was the right way to go. They were actually inspired by what the Chinese communist party did, and thought it was the right way to go. Of course, with time we can see the real cost of these policies in human terms. Increasingly, there is more awareness that this type of authoritarian policy destroys society with these school closures, and I could go on down the list of many more harmful policies that were enforced. But we’re not quite there yet. There’s still a lot of society in Canada, and in many other countries that think this was a good way to go. And maybe we should even go back to it, if there’s another wave. The real threat is less and less every day, but that’s where we’re at.

Mr. Lee:

History repeats itself. I don’t want to point fingers at individuals like Anthony Fauci. Lenin would say he is kind of the useful idiot that promotes something that he personally does not even know about. He thought he was defending against the virus, but he is introducing the ideological virus of totalitarianism to the nation. At the end of the day, it is a scientific issue. Whether people can develop immunity, and whether your healthcare system can cope with the virus is a very objective, scientific issue. How you can achieve those measures is another matter. They have to distinguish the means from the ends. At the end of the day, what is a healthy society? A healthy society does not mean the Chinese zero-COVID policy of no one ever dying. Cost-benefit issues need to be looked at in determining public health policy.

I’m not saying human lives do not matter. Personal responsibility matters. My kids ask me what I think about mask mandates. I say, “If you think a mask can protect you, you should be free to choose to wear a mask or not. You should be free to choose the people that you associate with, whether they choose to wear a mask or not. It is up to the venue or the school to decide what they need to do.” I’m pretty sure some people will make mistakes, but if you mandate it from top down for the whole nation, believing that no one will die, that is the biggest mistake you can make. This is what we have learned from the past two-plus years. Fortunately, because we are still living in a free, open society, we can still learn.

Mr. Jekielek:

Let me build on this. You describe how the CCP operated during this pandemic. Their ideology trumps all semblance of reality. Ideology first, and then to hell with everything else. I’m worried their mindset and approach is seeping into our free world. What are your thoughts?

Mr. Lee:

There are always useful idiots, right? The important thing is having people like you working on real stories and letting people know—I won’t say about reality, that’s too big of a word.

Mr. Jekielek:

Yes.

Mr. Lee:

You are certainly letting people know different perspectives. Sometimes it is more important to see the wrong side of the story, than to see the right side of the story. Because sometimes we can’t determine what is right, but we definitely know what is wrong. I always look for the positive side. Whatever China does, it’s a great opportunity for us to see a government that can give you everything and can also take away everything from you. China is showing us what a totalitarian country is. For those people who believe in the China model, I do have one suggestion for them. Go there. They will welcome you. 

Mr. Jekielek:

This is where the conversation becomes somber, because we can see what happens when a free society is forced to become like China under the Communist Party. That is happening in your home city.

Mr. Lee:

During the resistance movement there are few things that we learned. There are few things that we hold really dear. Number one, it is not really about us overthrowing the Communist Party. This has never been what we wanted to do, because at the end of the day, the nation probably chose the Communist Party for the wrong reason. And they didn’t even choose it consciously. Over a hundred years of revolution and the World War, even if it hadn’t been the Communist Party, and if it had been the Nationalists who took over, then probably we would have ended up with some kind of totalitarian regime. We might have had a mild form of totalitarianism, but it still would be a authoritarian-totalitarian mix.

What happened in Hong Kong was that we just wanted to be left alone. It was never about overthrowing a regime governing 1.4 billion people. We totally understood that. We were rational. But at the end of the day they thought that Hong Kong, a small place with a whole bunch of people who just wanted to be left alone, was a threat. That was the message to the world. If Hong Kong can be seen as a threat by the CCP, then the United States is a much bigger threat. And guess what the Chinese Communist Party wants to do with the United States? Do you think they will leave the United States alone? No, they cannot. It is in their nature to destroy everything that represents freedom. They want to destroy the freedom of their own people and of the people of other nations, consciously, and intentionally.

For people who are interested in the topic, please check out a term called, The Beijing Consensus, which has been promoted since 2004 by other useful idiots who believed that the world could be run differently under an authoritarian regime that is more efficient than one with Western democratic ideals. I suggest people that look up the whole story about The Beijing Consensus, because that is when China started to be more assertive about their position in the world. It didn’t even start with Xi Jinping. It preceded Xi Jinping. Xi Jinping is a creature of the system. Xi Jinping did not create the system, he was created by the system.

Mr. Jekielek:

Why is this little Hong Kong being a free city such a huge threat to the CCP? 

Mr. Lee:

First, Hong Kong provided an alternative to Chinese people. Hong Kong shows that the Chinese can live in a free society and prosper. When Chinese in authoritarian regime do not prosper, then everyone will ask the question, “Why can’t we be more like Hong Kong?” The same logic goes for Taiwan. Taiwan shows that Chinese can have an open, functioning, democratic society and have a civil society that advocates for the people. When things are not going well in China, like now with people protesting because of the implosion of the economic real estate bubble, people will ask, “Why can’t we be more like Taiwanese, and have a humble, but free life?” First and foremost, Hong Kong and Taiwan show people in China that they deserve better. Secondly, it shows the world what is possible for China. China has to eliminate Hong Kong and Taiwan, so that at least they can tell the world that there is only one possibility for Chinese society. I don’t agree. There are many different possibilities for China, and for the Chinese. Communism and  totalitarianism are not the only answer.

Mr. Jekielek:

You can take that to a larger scale. The CCP is saying it can only be the one system for Chinese, although on a bigger scale, that there can only be this one system for everyone.

Mr. Lee:

Thank you for asking this question. This is exactly what Xi Jinping wants to project to the world when he says he is building not only a rejuvenation of the nation, but also building a collective destiny for the whole human race. He is telling the world that the China model is more superior. In their rhetoric, they keep saying how superior the China model is, and how inferior the Western model is . Sometimes I don’t know if all this propaganda outside China was meant for consumption by the Chinese, but they are saying all these things. There might be a few outside of China believing this propaganda and saying, “Yes, China is doing the right thing.” In what way?

From time to time, I find people who are very dissatisfied with the status quo in America and they say, “Yes, maybe we should learn from China.” And then I ask them, “In what way?” They say, “No, China is actually free.” I reply, “Really? In what way?” I challenge all these people who think China is more free than America. I’m doing these things right now here in America, and saying these things. If they can openly do the same thing in China, then I will keep my mouth shut for the rest of my life. This is what I can promise them— if they can do that freely and openly, and also speak in Chinese, please.

Mr. Jekielek:

That is one of the biggest challenges in the West right now. A whole lot of people believe that America is fundamentally and irrevocably bad in all sorts of ways. Of course, there’s a whole ideology that underpins this. This is very dangerous. I don’t know if they’re thinking that the China model is the good replacement. Frankly, I don’t think they have a replacement in mind. I have had the privilege of living and working in many different places, and under many different systems. A lot of people here don’t really understand what they have, imagining that it’s so terrible.

Mr. Lee:

I don’t think there is heaven on earth. There is no perfect system. You only have the least worst system, so to speak. I do not think what is going on in China is better than the rest of the world, by any standard. Just go and ask an Chinese citizen that if they had a choice, what would their world would be like? I don’t think they will say, “I like what we have now in China. Don’t change anything.” I don’t think anyone will say that. Of course, in America, you do have people who want to change things, but please don’t make America more like China. You can make America be anything. You can make America more like Switzerland, but please, not like China. You can make America more like Hong Kong was in the past. You can make America more like anything that you can imagine, but just not like China.

Mr. Jekielek:

We were talking about these lockdown policies in Shanghai and other places, millions-upon-millions of people locked down. The economic cost of that is obviously exacerbating the economic realities that you have been describing in the real estate market. A previous guest mentioned that somehow Xi Jinping and the Communist Party has made the zero-COVID lockdown policy the success story of the Communist Party. They linked those two things together. This was what was suggested. That’s the reason that they cannot get off of this policy, irrespective of the massive cost that it’s bringing to the country as we speak. What are your thoughts? This is the thesis.

Mr. Lee:

Okay. The alternative theory is that China has been in an economic decline for a very long time. China has a lot of internal economic problems.

Mr. Jekielek:

Okay. You’re going to have to qualify this, because everyone has been saying, “China is beating the U.S., and China is on top.” Simon, what are you talking about here? 

Mr. Lee:

In 2015, the stock market crashed in China and it was brutal. It was really bad. It was the worst stock market crash in China’s very short financial history. After 2015, China, as most nations would do, loosened up credit substantially, just trying to keep the capital market afloat. The unintended consequences from this loosening of credit for the Chinese capital market was the current real estate bubble. Beginning in 2016, one year after stock market crash, the Chinese government said, “We have to cool down the real estate bubble. It is not sustainable. I’m talking about 2016. This was way before COVID, and even before the trade war with President Trump. President Trump had just been elected in 2016. So, in 2016, the massive real estate bubble started to build up, especially in the second-tier and third-tier cities.

There’s a good reason for that. China’s macroeconomic policy tried to favor those rural areas, because the first-tier cities benefited from the trade and foreign exchange income, but the second-tier cities did not. The Chinese government did not want them to compete with the first-tier cities in the manufacturing industries, because they don’t want to lower the profit margin of the existing people. So, what they did was to extend credit to the second-tier cities, which is where the real estate bubble was most serious. Starting with last year in 2021, it is beginning to collapse. The Chinese Communist Party sais, “It’s out of control.” They had to restrict credit to the real estate developers in these areas. So, the real estate developers were the first to fall. Evergreen was the first to fall. It was the biggest as well, because they were over-leveraged.

It is true that they were over-leveraged. The reason you have these over-leveraged real estate developers is because the Chinese government started this economic cycle to begin with. These bigger systemic economic issues started years before COVID. I’m pretty sure the COVID lockdown had tremendous impact on economic performance. Look at what happened in Shanghai. Shanghai’s GDP in the second quarter of this year was minus 11.4 per cent, if I remember it correctly. It is by far the worst in all the world. Shanghai is the size of a mini-nation. We have to bear this in mind. We are talking about a place that is already suffering from a massive recession. We are talking about a first-tier city. And in the second-tier cities, you have a bubble collapsing. It is a financial crisis by default.

I don’t know. They will probably reverse the credit policy. Actually, the central government has been loosening credit since earlier this year, but it does not really help at all. It does nothing. The property developers cannot deliver, and people are stopping their mortgage payments. Because if cannot get your home eventually, why are you paying the mortgage for it? And the banks have suffered.  Now, you have three parties in this crisis. It is way worse than what we saw in 2008 in America, many times worse. 

Mr. Jekielek:

This isn’t the only industry that is massively over-leveraged. There are so many in China, and that’s the reality. So, are you saying this might be the perfect storm right now?

Mr. Lee:

It is, and think about this. If this coincided with a big election year, what would happen? If it were in America, pretty much you would expect a different party would come to power. But in China it will always be the same Communist Party. So, I don’t know. This is actually a year of power transition.

Mr. Jekielek:

So, do you think the Chinese people might take out their dissatisfaction in a different way, because obviously, it’s not going to be through an election?

Mr. Lee:

Yes. They cannot go to the ballot box. Then they go to their cell phones. And now they cannot even go to their cell phones, because all the cell phones are monitored and censored. They cannot go out into the street, because of these health code regimens. They cannot leave their homes. Once the local authority says, “Okay, everyone is locked down,” they send a code to your cell phone, and then you cannot leave your home. You cannot go out into the street. You cannot go onto the internet. What do you do? Some people kill themselves. But some people have this anger, but they have nowhere to vent the anger.

So you see, China nowadays is a very angry nation. Whenever you have something go wrong, people get angry. They can be angry about anything. It is like an Orwellian nightmare with the two minute hate period every day. Every day, they find something to be angry about. It can be anything. So, it is very dangerous, psychologically speaking. It is a very dangerous situation. You have a whole nation of depressive, bipolar people ready to do crazy stuff.

Mr. Jekielek:

I hadn’t really heard it framed like this before. Where do you see things going right now?

Mr. Lee:

That is a very hard question. The other day I was thinking about the early 20th century when China was at the juncture of becoming modernized at the end of the Qing dynasty. There was a very short period of time when the Chinese thought about, “Can we be a more open, free society?” The intellectuals back then asked, “What kind of model we should adopt?” At that point in time, the most fashionable model that you could copy was either Germany or Japan. Both of them actually evolved considerably after the Second World War. China missed its first opportunity to become modernized before World War II, and its second opportunity after World War II. There were many narrow corridors of opportunity for China becoming a free, open society. In the 1980s, that was another opportunity. We missed it again at that time. I don’t know, once you miss an opportunity so many times, does that mean that you’ll never get it again? I don’t know. I just don’t have the answer to that.

Mr. Jekielek:

They did modernize technologically. They modernized technologically, but not ideologically.

Mr. Lee:

It is like giving a whole bunch of AK-47’s to the ancient Romans, what do you think they would do? They would take the guns and then kill people around them. The problem is, if you give a society something that is way advanced beyond their stage of development, it is not a good thing. You want the civilization to progress institutionally, rather than technologically. You want these two types of progress to go hand-in-hand.

We don’t want to give nuclear weapons to people living 400 years ago. That would be a disaster. If you gave a nuclear weapon to a British monarch 400 years ago, we might not have America today. They would just nuke George Washington. You don’t want that kind of thing to happen. You want the civilization to really evolve. Actually, even America has evolved over the years.

Back in the nineties, we talked about a lot of things. If you look at where we are now, we really are more technologically advanced. Some people would say technology fragments society, but I would say maybe it is a better form of society. Because you do not have one centralized ideology, and one centralized power. People can debate with each other. The world is actually moving towards a more peaceful, more prosperous status than before. But when looking at China, time and time again, they have missed the opportunity to progress institutionally.

We adopted the wrong model. Everyone makes mistakes. Japan made mistakes. Germany made mistakes. But look at where they are now, they’re doing fine. There’s one thing I want to tell the Chinese people, as well. Japan and Germany lost in the Second World War, but their nations remain. A nation is very hearty stuff. The nation does not disappear after you lose a war. Whenever they talk about the survival of the nation, remember one thing, it is not the survival of the government that matters to your nation. Your nation is something bigger. If you love your nation, you will want it to be more accepted by other people. Not like now, when the Chinese government is actually agitating people, and people are afraid of them. Actually, people love Chinese culture. People love the Chinese heritage. They are afraid of the government, which is using Chinese heritage and culture for their own political purpose. This is what I want to tell Chinese people.

I still insist, there is no perfect model. There are no perfect nations. The only way to progress is to understand what is wrong. We may not know what is the definite right answer. Whenever someone says, “I have the definite right answer for you,” be very careful. That is what the Chinese Communist Party is telling its own people and the rest of the world—it has the definite answer.

In America, what we should embrace is that we don’t know the right answer. But in America, you can experiment, and you can try. The beauty of the American system is you can have anyone in office, but he must still work within the system. No matter who the president is, if you have half the nation not agreeing with him, that is okay. That is the beauty of the system.

In China, you don’t even know how many people are not happy with the supreme leaders. That is the problem. At least we know that half the nation doesn’t like Joe Biden, and half the nation doesn’t like Trump, but that is fine. That’s the way it is. 

Mr. Jekielek:

Simon Lee, it’s such a pleasure to have you on the show.

Mr. Lee:

My pleasure.

Mr. Jekielek:

Thank you all for joining Simon Lee and I on this episode of American Thought Leaders. I’m your host, Jan Jekielek.

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