Once one of Asia’s most high-flying cities, Hong Kong now struggles with deep pessimism.

The stock market is in trouble, house prices have plummeted and emigration is causing a brain drain. Some of the most popular restaurants, spas and shopping centers that locals flock to are located across the border in the mainland Chinese city of Shenzhen.

“It pains me to say that Hong Kong is over,” wrote Stephen Roach, an economist and former chairman of Morgan Stanley Asia, long known for his optimism about the city, in a recent commentary in The Financial Times.

The government needs to revive Hong Kong’s economy and boost its global image, but has instead focused largely on national security. On Tuesday, the country moved with unusual speed to pass a package of updated and new security laws aimed at curbing foreign influence and dissent, with penalties including life imprisonment for treason and other political crimes. The legislation could deter even more foreign companies, which are already shrinking, from investing in Hong Kong.

The malaise hanging over Hong Kong is partly a result of the city’s status as a bridge between China and the West, with the city’s growth held back by the mainland’s sputtering economy and Chinese tensions with the United States.

But at the heart of Hong Kong’s problems is an identity crisis, as the city’s Beijing-backed officials push the once free city away from the West and embrace the top-down political culture and nationalist fervor of President Xi Jinping’s China.

“People are very unhappy for all kinds of reasons,” said Emily Lau, a veteran pro-democracy politician and former lawmaker who now hosts an interview program on YouTube. “Of course the authorities won’t admit this publicly, but I think they know it.”

Hong Kong, a former British colony, had promised a degree of autonomy from Beijing after returning to Chinese rule in 1997, with freedoms unseen on the mainland. But after massive anti-government demonstrations engulfed the city for months in 2019, Beijing imposed a sweeping national security law on Hong Kong in 2020, which authorities used to brutally crush pro-democracy opposition.

According to the Chinese Communist Party, the protests were sparked by Western forces seeking to undermine Chinese sovereignty. John Lee, the city’s Beijing-backed leader and former police officer, has described Hong Kong as still under siege by subversive foreign forces.

says Mr. Lee the new security laws will eliminate such threats and “provide the strongest foundation for Hong Kong’s prosperity and stability.”

Mr Lee and Chinese officials have argued that such laws are long overdue. The Basic Law, the city’s mini-constitution, calls on Hong Kong to maintain its own political and economic system for 50 years, but also requires the country, under Article 23, to adopt its own internal security laws. The government first tried to enact such Article 23 laws in 2003, but withdrew after hundreds of thousands of residents took to the streets in protest, fearing the legislation would restrict civil liberties.

With security laws in place, officials now say, the government can focus on other needs, such as reviving the economy.

But it is unclear whether Hong Kong can maintain the dynamism and vitality that drove its prosperity at a time when Beijing’s control is so overt. The new rules also raise questions about how the borders have shifted.

“Xi Jinping knows that Article 23 will damage Hong Kong’s reputation as a financial center,” said Willy Lam, an analyst of Chinese politics at the Jamestown Foundation in Washington. “He knows that Beijing needs Hong Kong for foreign investment, foreign exchange and stock market listings. But he is a completely ideological leader. It is much more important for him to demonstrate his power, flex his muscles and negate all opposition in Hong Kong.”

If you visit Hong Kong today and scratch beneath the surface, you will see a city very different from the vibrant, sometimes raucous political culture that existed before the current crackdown.

Now government critics and opposition lawmakers are languishing in jail. Jimmy Lai, a pro-democracy media mogul, is on trial on national security charges. Independent news organizations have been forced to close. Public school officials and teachers are being told to take loyalty oaths and take national security tests.

In this new environment, even sports cannot escape politics. Last month, a protest broke out in Hong Kong after football star Lionel Messi sat out a practice match against a team of local players due to injury. The government had promoted the Inter Miami match, which sold many tickets for hundreds of dollars each, as a way to create excitement in the city.

But when Messi was left on the bench, disappointing fans, officials and Chinese state news media suggested he had been used by the United States in a plot to embarrass Hong Kong. Mr Messi later posted a video clip on social media in which he denied the allegations and expressed his affection for China. According to some internet users, the images looked like a hostage video.

One of the most strident voices criticizing Mr Messi was Regina Ip, a senior adviser to the Hong Kong government and a veteran pro-Beijing lawmaker.

“Hong Kong people hate Messi, Inter-Miami and the black hand behind them, because of the deliberate and calculated criticism of Hong Kong,” she wrote on X, formerly known as Twitter.

The Messi controversy was a prominent example of an increasingly testy official atmosphere – but it was far from the exception.

Ms Ip also criticized Mr Roach, the economist, for his “Hong Kong is over” comment in The Financial Times, saying he ignored the real causes of the financial center’s economic problems, which she attributed to US policies , such as federal policy. interest rate increases. Other top officials accused Mr. Roach of scaremongering.

(In response to the backlash, Mr. Roach wrote a commentary for The South China Morning Post, a Hong Kong newspaper, arguing that the city lacked the momentum to withstand Beijing’s increasing political grip, geopolitical tensions with the United States and overcome a long-term decline in the Chinese economy. Chinese economic growth.)

“The energy and unbridled optimism that was once Hong Kong’s most distinctive feature and greatest asset have been sapped,” Mr. Roach wrote.

City officials now routinely lash out at foreign governments, diplomats and the news media for criticizing Hong Kong’s policies. Even voices from the Hong Kong establishment are not spared the invective.

When a pro-Beijing lawmaker complained that police officers were handing out too many fines, Mr. Lee, the city’s leader, reprimanded him for what he called an act of “soft resistance.”

The authorities have used this term to describe an insidious, passive resistance to the government. According to Mr Lee, this backlash also includes complaints that Hong Kong is too focused on national security.

The Article 23 legislation is intended to eradicate such ‘soft resistance’, civil servants have saidand fill the gaps left by the national security law that China directly imposed. The laws focus on five areas: treason, insurrection, sabotage, outside interference and the theft of state secrets and espionage.

Legal experts and trade groups said the broad and often vague wording of the laws posed potential risks for companies operating or looking to invest in Hong Kong. The government was forced to scramble this month to deny reports that it was considering banning Facebook and YouTube as part of the legislation.

“Unhindered information flow is crucial for the city to maintain its status as Asia’s financial center,” wrote Wang Xiangwei, an associate professor of journalism at Hong Kong Baptist University, in an editorial published Monday in The South China Morning Post published. he was once editor-in-chief.

The uncertainty has led some foreign companies to treat Hong Kong as if it were the mainland. They have started using burner phones and restricting local employees’ access to their companies’ global databases.

Hong Kong native Mark Lee said the more his city looked and felt like the mainland, the greater the temptation to emigrate abroad.

The 36-year-old personal trainer said that in recent years about a quarter of the 200 people who used to belong to his WhatsApp group for organizing group runs and training sessions have left Hong Kong. He is hesitant to have a child because he is concerned about Hong Kong’s public school system, which requires national security education.

“If Hong Kong is no longer my city, I will have to leave,” Mr Lee said. The changes, he added, felt like “death by a thousand cuts.”

Keith Bradsher And Olivia Wang reporting contributed.

Even as China’s growth falters, Xi Jinping appears absolutely confident he has the right roadmap to surpass Western rivals.

The Chinese economy has slowed down. The population is shrinking and aging. Its rival, the United States, has built a lead in artificial intelligence. Mr. Xi’s statement several years ago that “the East is rising and the West is in decline” — that his country was on the right track while American power was shrinking — now seems premature, if not downright hubristic.

The problems have led to growth talking abroad that China could reach its peak before fully becoming a superpower. But Xi appears unyielding as he insists that his policies, with expanded party control and state-led industrial investment in new sectors such as electric vehicles and semiconductors, can secure China’s rise.

In a show of that confidence, his government announced last week that China’s economy is likely to grow by about 5 percent this year, almost the same pace as last year, according to official statistics. And Mr Xi emphasized his ambitions for a new phase of industrial growth driven by innovation, acting as if the setbacks of the past two years were an aberration.

“Faced with a technological revolution and industrial transformation, we must seize the opportunity,” he told the delegates at the annual Chinese legislative meeting in Beijing, which were shown on television applaud him heartily.

He later told another group during the legislature that China had to “win the battle for key nuclear technologies,” and he the People’s Liberation Army said officers to build “strategic capabilities in emerging areas,” which, the officers indicated, include artificial intelligence, cyber operations and space technology.

Mr Xi’s optimistic attitude may be partly for show: Chinese leaders, like politicians around the world, are reluctant to admit mistakes. And some officials have privately admitted that the economic malaise is keeping China’s ambitions and swagger in check, at least for now.

Ryan Hassthe director of the Brookings Institution’s John L. Thornton China Center visited China late last year, said he came away with the feeling that “the Chinese are even a little bit chastened compared to where they were a year ago. The trajectory in which China’s economy will overtake America’s in the coming years is being pushed further into the horizon.”

Yet Mr Xi’s determination to stick to his long-term ambitions appears to be more than a show. “Xi and his team still believe that time and momentum remain on China’s side,” said Mr. Hass, a former director for China at the U.S. National Security Council. “Now that Xi is in power,” he added, it is difficult to imagine “any significant recalibration in China’s overall trajectory.”

Since taking office in 2012, Mr Xi has tightened the Communist Party’s grip on Chinese society. He has expanded state control of the economy, expanded the security apparatus to eliminate potential challenges to party rule, and confronted Washington on technology, Taiwan and other disputes.

According to Xi’s critics, his centralizing, hardline tendencies are part of China’s problems. He did not cause China’s risky dependence on the real estate market for growth, and he has worked to end it. But many economists argue he has been too heavy-handed, stifling business and innovation. Critics say Xi has also unnecessarily antagonized Western governments, pushing them to restrict access to technology and deepen security ties with Washington.

Since last year, the Chinese government has taken measures to ease these tensions. It has taken steps to revive confidence among private companies. Mr Xi has also sought to reduce tensions with the United States and other countries.

Such moderating gestures point to what Mr Xi has described as the “tactical flexibilityhe expects from Chinese officials in difficult times. But Mr. Xi said even as officials implement easing measures, they must stick to his long-term goals. He and his loyal subordinates have been defends his policy in speeches and editorials, which suggests that the doubters are short-sighted. Chinese officials and scientists have also made their moves denunciations of the West Analysts predict that China is entering an era of decline.

Mr Xi has emphasized that economic and security priorities must go hand in hand, even as China struggles with slower growth. Mr Xi is also betting that investments in manufacturing and technology can deliver new “high quality” growth by expanding industries such as new clean energy and electric vehicles.

The mantra of China’s leadership seems to be: “We are not going to grow as fast as we used to, but we are going to gain more influence over trading partners by controlling crucial parts of the global economy,” said Michael Beckley. , an associate professor at Tufts University, who has argued that China is a ‘peak power’, that is, a country whose economic rise has slowed but not yet stopped.

Some economists argue that China’s progress in these select sectors will not be enough to offset the burden caused by a decline in consumer confidence and by debt-burdened developers and local governments. China’s broader fortunes will depend heavily on whether Xi’s bet on technology can pay off.

“They see technology as the solution to every problem they face – economic, environmental, demographic, social,” he said Nadege Rolland, a researcher at the National Bureau of Asian Research who studies China’s strategic thinking. “If they cannot make sufficient progress in this area, it will be very difficult for them.”

Scholars in China and beyond who hope the country will take a more liberal path sometimes look to history for examples of times when party leaders made bold changes to defuse domestic and international tensions.

The last time China found itself in such a painful confluence was after the June 4, 1989, crackdown on pro-democracy demonstrators. The bloodshed prompted Western countries to impose sanctions on China, exacerbating the economic shock. Within a few years, however, Deng Xiaoping, then leader of China, sought to repair relations with Washington and other capitals and bring about market changes that revived growth and lured back Western investors.

Now, however, China faces much deeper-seated antagonism from other major powers. Zhu Feng, a prominent foreign policy scholar at Nanjing University in eastern China said in an interview. For example, rising Chinese exports of electric cars – which have benefited from extensive government subsidies – could revive trade tensions as the United States, Japan and Europe fear losing jobs and industrial power.

The economic and diplomatic tensions pose “the biggest challenge for China” in decades, Professor Zhu said.

Yet China’s leaders seem to believe that whatever their problems, their Western rivals face increasingly dire problems that will ultimately humiliate and break them.

Recent reports from institutions under China ruling party, army And ministry of state security point to the rancorous polarization in the United States in the run-up to the next elections. No matter who wins, Chinese analysts argueAmerican power will likely continue to be plagued by political dysfunction.

Chinese scholars have also focused on the fault lines in the Western Bloc over Russia’s war in Ukraine. Beijing’s relations with the United States and European governments have been under severe strain because of Xi’s partnership with President Vladimir V. Putin. But as the war enters its third year, the burden of supporting Ukraine is widening rifts and “fatigue” in the United States and the US. Europe.

“The US foreign intervention cannot handle everything it tries to juggle,” said Chen Xiangyang, a researcher at the China Institutes of Contemporary International Relations in Beijing, which falls under the Ministry of State Security. wrote last year. “China can exploit the contradictions and use them to its own advantage.”

China’s real growth agenda

China announced an official growth target of around 5 percent on Tuesday, which already appears difficult to achieve. The world’s second-largest economy is facing headwinds, from a consumer slowdown to weak investor confidence and a trade war with the West.

But the growth target tells only part of the story of how Beijing is rethinking economic policy.

Omitted from the statements: a stimulus package. Investors are watching the annual meeting of the National People’s Congress, the country’s parliament and a parallel meeting of China’s top policy-making body, for clues about the government’s priorities. Spending is expected to remain at about last year’s levels, suggesting no major boost is on the horizon.

That’s not good news for Western brands, which have seen massive growth in Chinese consumer spending in recent years. Apple has reportedly seen sales of Chinese iPhones plummet this year.

The growth target is also in line with that of last year, when the economy grew by 5.2 percent after the lockdown. (Some analysts say the real growth rate is much lower.) Global investors must accept that slow growth is the new normal. says Yu Jie, a senior fellow on China at Chatham House, a think tank. “Beijing wants to draw a line under the economic model of the past, which focused on infrastructure and real estate,” she told DealBook.

Beijing’s real focus is reforming the economy. The government knows it faces a host of challenges, but Chinese leader Xi Jinping is trying to move away from debt-fueled sectors like real estate and focus on strategically important industries. The terms it uses are ‘high quality development’ and ‘new productive forces’, including electric vehicles, climate technology, life sciences and artificial intelligence. The latest moves to achieve that: Premier Li Qiang, China’s second-highest official, said on Tuesday the government would increase spending on science and technology research by 10 percent.

More state-led investments are the priority, instead of “other types of more politically painful reforms,” George Magnus, a research fellow at the University of Oxford’s China Center and a former chief economist at UBS, told DealBook.

It could also mean more pressure on private companies to toe the party line bankers are ordered to be more patriotic and developing a “financial culture with Chinese characteristics.”

HERE’S WHAT’S HAPPENING

Donald Trump is expected to score a big victory in the Super Tuesday contests. Voters in fifteen states, including California and Texas, are going to the polls. A landslide Trump victory in the Republican primaries could force Nikki Haley to drop out. Elsewhere, the outspoken billionaire Mark Cuban endorsed President Biden in the general election, and supporters of the third-party initiative No Labels fear the group is no longer politically viable.

The White House tackles ‘corporate fraud’. The Biden administration said Tuesday it was creating a “strike force” to coordinate federal combat efforts “unfair and illegal prices.” It’s part of Biden’s efforts to keep rising prices at bay – a concern among voters which cost him a lot politically – partly about greedy corporations, a topic that will surely come up again during his State of the Union address on Thursday.

Nelson Peltz publishes his full case against Disney. The activist investor shared his white paper outlining his recommendations to turn around the media giant; among them are finding a partner for Disney’s TV broadcasts and scrapping plans to introduce a new ESPN streaming service that would replace ESPN+. Peltz’s 133-page filing comes less than a month before Disney shareholders vote on whether to give him control of two board seats.

How hard will the new EU law bite Apple?

European antitrust authorities have finally cracked down on Apple, fining the iPhone maker $2 billion for trying to thwart music streaming competition. A bigger test of the EU’s ability to curb tech giants is yet to come.

The Digital Markets Act, intended to ensure competition between popular digital platforms, comes into force on Thursday. But skeptics think tech giants like Apple will find ways to avoid being boxed in.

The DMA represents an aggressive attempt to control digital competition. Monday’s fine related to the narrow issue of Apple seeking to thwart rivals like Spotify in music streaming. The new law is intended to prevent ‘gatekeepers’ of major platforms – including Amazon, Apple, Google and Meta – from using their market power to exclude newcomers.

The costs of non-compliance are high: DMA violators could be forced to pay 10 percent of their global turnoveror up to 20 percent for repeat violations.

Apple says it will comply with the law, offering multiple options to app developers that it says could reduce their costs. Several of these require Apple to pay a per-download fee once their apps reach a million downloads per year.

But critics say Apple has tried to circumvent the new rules. In the Netherlands and South Korea, which both passed legislation requiring app store owners to allow alternative payment systems, the iPhone maker agreed to open its app store. But it began charging a 26 percent commission to those who used non-Apple payment methods, a move the Korean government said undermined the law.

In a letter to the European Commission Published last week, three dozen companies argued that Apple was taking a similar approach to the DMA. “Apple has a history of skirting these rules.” Daniel Ek, Spotify’s co-founder and CEO said after the EU fine was announced on Monday. “It will continue to act as it has been acting.”

Apple has the resources to fight. The company said it planned to appeal Monday’s ruling and could contest the charges under the DMA. It’s worth noting that the tech giant is still fighting other government penalties, including a €13 billion tax bill handed down by the European Commission in 2016..

The battle over the SEC’s new climate mandate

The SEC will vote tomorrow on a new rule requiring companies to disclose their business’ climate risks, a key part of the Biden administration’s green agenda.

When the proposal was introduced two years ago, Gary Gensler, the chairman of the SEC, said it would help “tens of trillions of dollars” of investors’ money. But climate experts and former SEC commissioners expect the measure will have been watered down amid intense corporate lobbying and broader conservative opposition to agency power.

The rule was intended to help investors assess climate risks. Money flowing into companies that prioritize environmental, social and governance principles has exploded in recent years, providing a huge profit driver for Wall Street. But ESG investors have begun to pull back recently amid concerns about greenwashing, red state boycotts and regulatory uncertainty.

Some fear muted SEC rules could hamper transparency. Another problem: California And Europe have sophisticated aggressive disclosure mandates, which may require large companies to navigate a hodgepodge of regulations.

What is expected to disappear? The most controversial aspect said to have been abolished these are so-called Scope 3 discharges, which relate to the majority of a company’s emissions. But measuring Scope 3 involves an expensive examination of the entire value chain from supplier to customer.

Scope 3 is a “centrally important metric for investors” and critical to preventing greenwashing, Allison Herren Lee, the former acting chair of the SEC, told DealBook. (In 2021, she pushed for this requirement.)

What’s probably in it? Scope 1 and Scope 2 emissions, which measure a company’s direct carbon footprint, are expected to be part of the new rules, but only if they are considered ‘material’. This qualification leaves companies some room for maneuver.

“If the SEC ultimately leaves climate disclosure decisions to corporate executives, it is a policy choice with an unfortunate history,” said Satyam Khanna, a former SEC climate adviser.

Even watered-down rules can spark a legal battle. Business groups have repeatedly challenged the Biden administration’s environmental agenda in court.

The SEC will be sued “as surely as the sun rises in the east,” said Joseph Grundfest, a professor at Stanford Law School and former SEC commissioner.

“This will get to zero faster than my wallet when my Wendy’s paycheck comes in.”

— 96 Phoenix, member of the online community WallStreetBets, on Reddit’s IPO plans. Reddit has capitalized on the enthusiasm among its users, but some are instead expressing reservations.

Musk’s lawsuits are piling up

More than a year after Elon Musk completed his $44 billion acquisition of Twitter (now X), challenges – and lawsuits – are piling up.

Musk, who filed his own blockbuster lawsuit against OpenAI last week, has previously faced a mountain of legal troubles. But these distractions come at a particularly difficult time for the billionaire. Musk is struggling with one exodus of investors from Teslahis electric vehicle maker, and the banks that loaned him billions to buy Twitter two years ago reportedly met with him to discuss refinancing terms.

Former Twitter executives are the latest to join. One of Musk’s first acts after buying the company was to fire him Parag Agrawal, the CEO; Ned Segal, the CFO; Vijaya Gadde, head of legal and policy; and Sean Edgett, general counsel. They sued Musk for $128 million on Monday, accusing him of withholding severance payments and stripping him of unvested stock when he took the company private in October 2022.

Musk believes he fired them “for good reason.” The lawsuit quotes Musk as telling biographer Walter Isaacson that he would “hunt” the executives until the day they die.

“This is Musk’s playbook: keep the money he owes other people and force them to sue him,” the executives’ lawyers wrote. “Even if he is defeated, Musk can impose delays, hassles and costs on others who can less afford it.”

The case puts Musk’s many lawsuits back in the spotlight. Here are a few more:

READING THE SPEED

Offers

Policy

The best of the rest

We want your feedback! Send your ideas and suggestions by email to dealbook@nytimes.com.

Finally it seemed like everything was back to normal.

As nearly 3,000 delegates filed into Beijing’s Great Hall of the People on Tuesday for the opening of China’s annual legislative assembly, no one wore a face mask. Officials crowded together to shake hands and pose for photos. Around them, reporters and diplomats from around the world milled around the cavernous lobby, many invited for the first time since the outbreak of the coronavirus pandemic four years earlier.

It was one of China’s most prominent political stages, and the message sent was clear: the country’s long isolation was over, the country was once again open to the world and ready for business.

But normal has a different meaning in today’s China than before. And beneath the veneer of openness were signs of how much China has changed in the past four years: It is more insular, more disciplined and more closely tied to the one-man rule of its top leader, Xi Jinping.

To gain access to the Great Hall, where China’s most important political meetings take place, attendees still had to take a government-arranged Covid test. Unlike previous years, when a report detailing the government’s annual economic growth target was made public at the start of the opening ceremony, this year it was initially shared only with delegates and diplomats.

In perhaps the biggest departure from previous years, officials announced that China’s premier, the country’s No. 2 official, would no longer answer questions at the end of the weeklong legislative session. It was the end of a three-decade tradition, one of the few opportunities for journalists to interact with a top leader.

“That’s where the prime minister’s press conference used to be,” a Chinese man in a suit pointed out to another in a low voice on Tuesday as they walked through the room.

Guides with that kind of insider knowledge are important at Chinese political events like this, where the events are so tightly choreographed that a casual observer might not know that things haven’t always been this way.

At 9 a.m., as a light sleet fell outside, dozens of delegates sat in neat rows on the stage, against a backdrop of towering red curtains. Together with the other delegates sitting below them, they sang the national anthem.

When the Prime Minister, Li Qiang, then took the stage to give his summary of the government’s achievements over the past year, they dutifully pored over their paper copies of his report. This year, reporters did not receive copies of the report until halfway through Mr. Li’s speech.

Above the stage, the venue’s expansive balconies were filled with Chinese and foreign journalists positioning cameras, taking notes and peering through binoculars at the officials far below.

But many of the foreign journalists were only allowed into the country on temporary visas because China has been slow to issue or deny long-term visas to many Western news organizations. In 2020, many American journalists were deported, and last year even some foreign journalists with valid long-term visas were not allowed into the legislature.

In Mr. Li’s nearly hour-long speech, he repeatedly paid tribute to Mr. Xi, who sat in the center of the second row. Mr. Xi, unlike everyone else on stage, barely touched his copy of the work report. Every now and then he sipped from one of the two teacups ready for him. (For most of his early years in power, Mr. Xi had just one cup at the opening ceremony, as did the other delegates. But in recent years, Mr. Xi, who has steadily consolidated power around him, has had two had.)

Mr Li acknowledged the challenges China faces, including a debt-laden real estate sector and weak consumer demand. This is all part of why China is now so keen to project openness, as it seeks to attract foreign investors and reassure domestic entrepreneurs.

“We must communicate the policy to the public in a targeted manner to create a stable, transparent and predictable policy environment,” Mr Li said.

But you only had to step outside the room to see why many are suspicious of such promises. Information about and from the government has become increasingly limited as China has expanded its definition of espionage to include even routine interactions with foreigners as potentially dangerous. Restrictions on both the Chinese and foreign press have been tightened.

Days before the opening ceremony, the Foreign Correspondents Club of China said a journalist from Dutch broadcaster NOS was pushed to the ground by police officers in a city in southwestern China while interviewing people there; so was the incident captured on camera. In the days before the rallies, police cars with flashing lights regularly appeared on street corners across Beijing, and volunteers wearing red armbands kept watch for potential troublemakers.

On Tuesday, officials had organized a series of question-and-answer sessions with a number of pre-selected deputies and ministers — sessions that, officials said, helped justify the cancellation of the prime minister’s traditional press conference. In the lobby of the Great Hall, these officials answered carefully worded questions from state media on topics such as how Chinese-made cars could be promoted abroad and how the Chinese people had benefited from government investments in water conservation infrastructure.

One of the elected delegates came from Henan province, home to a major archaeological site called Yinxu. When he had to ask a question, a reporter from a Communist Party newspaper asked him, “Recently, Yinxu’s achievements in archeology have attracted a lot of attention. Do you have any special feelings about the protection of cultural artifacts?”

Outside this carefully curated context, attempts to interview delegates were far less successful. Several officials, approached as they entered or left the chamber, refused to answer even simple questions, such as whether they had introduced legislative proposals this year, or even where they were from.

A typical conversation with a delegate whose name tag identified him as Wang Wenqiang, from Hebei Province, went as follows:

“Excuse me, have you made any proposals this year?”

“Not this year,” Mr. Wang replied as he walked toward the auditorium without breaking stride.

“Have you submitted proposals in the past?”

“Yes, last year.”

“What was it about?”

“People’s livelihood.”

“Can you be a little more specific?”

‘There’s someone waiting for me there. Sorry,” Mr. Wang said. And with that he disappeared.

Siyi Zhao contributed research from Seoul.

Beijing was abuzz with politics on Tuesday. China’s annual legislative gathering — the National People’s Congress, where Communist Party leaders promote their solutions to national ills — opened for business.

The event is a chance for leaders to set the direction of the economy and outline how and where the government will spend money in the coming year.

But while they aimed high, they offered little. Officials indicated they were not ready for dramatic steps to revive an economy ravaged by a real estate crisis, loss of consumer confidence and financial pressure from indebted local governments. Despite their reluctance to spend, China’s top leaders expect the economy to grow by about 5 percent this year.

The growth target and other policies were laid out in a report presented to the annual session of the Legislature. It was presented by China’s No. 2 official, Li Qiang, and is the culmination of a weeklong meeting dominated by officials and party loyalists.

Everyone agrees: the objective is ambitious.

There was one word that economists universally used to describe China’s 5 percent growth target: ambitious.

That would never have been the case. For decades, the Chinese economy has been synonymous with much higher growth, sometimes even double digits. But three years of strict pandemic restrictions took their toll, and a deepening real estate crisis has led to the collapse of dozens of developers. With insufficient action from Chinese leaders, some experts are now skeptical that China will achieve 5 percent growth this year.

“It’s not surprisingly an unrealistic set of targets,” said Logan Wright, director of China Market Research at Rhodium Group, a firm that specializes in China research.

It was still possible that the housing crisis would ease this year, Mr. Wright said, “but the policy measures outlined here won’t have much to do with it.”

Wait, no bazooka?

Some people believed – or at least hoped – that Tuesday’s reports would show that China is willing to take bigger steps to revive the economy, such as bailing out local governments, rescuing the real estate companies that haven’t collapsed, or by distributing alms to households. to stimulate spending.

Instead, the government said it would make a similar amount available as last year in the form of special bonds for local governments. No new measures for the real estate market were proposed and only the need to increase consumer confidence was discussed.

“They could have done more and the support could have been greater,” said Tao Wang, chief China economist at UBS. “They need greater explicit support from the central government,” she said.

Not only economists were disappointed. Investors who hoped China would bring in the big guns were also disappointed. In Hong Kong, where foreign investors can bet on China’s biggest companies, the Hang Seng Index fell 2.6 percent.

“Anyone looking for the policy bazooka will be disappointed,” said Andrew Polk, co-founder of Trivium China, a research and consulting firm. “But,” he added, “that die was cast some time ago.”

When it comes to the military, there is money to spend.

China’s top leaders outlined plans to expand military spending by 7.2 percent to about $231 billion by 2024. The percentage increase was the same as last year and continued a decades-long expansion of Chinese military spending, now the second largest in the world after the United States.

China’s spending on warships, fighter jets and other weapons is largely about projecting power in Asia, including by tightening the country’s grip on the disputed South China Sea and threatening Taiwan, the self-governing island democracy that Beijing says is his territory.

In his report to the legislature, Mr. Li reiterated China’s long-standing warning against “separatist activities aimed at ‘Taiwan independence,’” adding that Beijing would be “resolute in advancing the cause of the reunification of China.”

Mr. Li’s vague comments reflect how China’s leaders are waiting for Taiwan’s newly elected President Lai Ching-te to take office in May before considering major steps, including more military operations around the island, Ou Si-fu said. a researcher at the Institute for National Defense and Security Research, a Taipei think tank under Taiwan’s Ministry of Defense.

But China’s continued heavy spending on its military showed that Xi Jinping would continue to fight for potential conflict, if only to show Washington that it was serious about asserting its interests.

“Since the relationship with the United States is not good, China naturally cannot show too much weakness,” Ou said.

Come join us. Sorry, the press conference has been cancelled.

China invited journalists from all over the world and handed out visas that in most cases have become difficult to obtain. For many foreign correspondents, this year’s National People’s Congress marked the first time since the pandemic that the Chinese government allowed them to enter China to report.

Yet the party also made an abrupt change in the way it would communicate at the conference. On Monday it said it was scrapping a long-standing tradition: the prime minister’s press conference. It was one of the few opportunities for journalists to communicate with top officials. The decision to abolish the press conference, announced on the eve of the legislative conclave, was seen by many as another step away from transparency.

During Shuang Xuetao’s early teenage years, he wondered for a long time what hidden disaster had befallen his family.

His parents, proud workers at a tractor factory in the northeastern Chinese city of Shenyang, stopped working and the family moved into an empty factory warehouse to save money on rent.

But they rarely talked about what happened, and Mr. Shuang worried that only a special shame had befallen his family.

Only later did he learn about the mass layoffs that swept northeast China in the 1990s, during the country’s shift from a planned economy to a market-based economy. The region had been the industrial heart of China, but suddenly millions of workers found themselves unemployed. Crime and poverty increased. Even today, the region, also called China’s Rust Belt, has not fully recovered.

The legacy of that common suffering animates the writing of Mr. Shuang, now 40 and one of China’s most celebrated young authors. For his short stories about the economic decline of his hometown and the mass disillusionment that followed, he has been praised for drawing attention to a time and people that China’s public imagination had long written off.

His stories also address the isolation of individuals within that collective experience. His characters disappear from their neighbors’ lives without saying goodbye or, in one of his signature magical realist twists, trek through the heavy snowstorms of the Northeast and end up in a cell at the bottom of a lake.

Mr. Shuang describes himself as both a participant in that era and a bystander – making him perhaps the ideal person to introduce it to a new generation of readers.

“That was my childhood,” Mr. Shuang said during an interview in Beijing, where he now lives. “So I was part of what was happening, but I didn’t necessarily understand it either.”

The question of how to understand the region’s history has become particularly relevant recently, as a wave of art about the northeast, known in Mandarin as Dongbei, has gained widespread popularity. A television drama about a faded factory town it was China’s top-rated show last year, and songs by Dongbei musicians have gone viral. Mr. Shuang published a new collection of short stories in February, and a star-studded film adaptation of one of his novellas is planned this year.

Cultural commentators have proclaimed a “Dongbei Renaissance.” Some have suggested that young people see a resonance between that time and China’s current economic slump.

Many stories set in the Northeast, including Mr. Shuang’s, have a raw aesthetic of huge chimneys, blinding snow and snow. and surrounding despair. When Mr. Shuang began writing, he rarely saw that face of the region represented.

Yet Mr. Shuang now worries that these characteristics are being interpreted as stereotypes, or worse, as gospel truth.

“Now that people have paid attention, I think we should remind them: this is not the real Shenyang,” he said. “It’s mine.”

Shenyang, where Mr. Shuang was born in 1983, was the largest city in China’s most urbanized, prosperous region. State-supported factories produced steel and heavy machinery, and their workers basked in the promise of lifelong job security. Mr. Shuang’s parents dropped him off at the factory’s kindergarten every day; the 7,000 employees enjoyed a factory hospital, cinema and auditorium.

When Chinese leaders began allowing private companies to compete with state-owned giants in the 1990s, that idyll collapsed. Mr. Shuang’s mother started selling tea eggs on the street.

Determined to earn a steady income, Mr. Shuang studied law at university and then went to work at a bank. But he soon got bored. As a teenager, he had found solace in the lost young men of Ernest Hemingway and JD Salinger. He began writing secretly at night about his own lost young men.

At first, Mr. Shuang wrote about Shenyang because that was all he knew. But when he found an audience – by winning several major writing competitions – a sense of responsibility developed. “I said, OK, I want to help others better understand this place of ours. I want to leave a record of these people.”

Many of his stories feature a recurring cast of characters: tea egg sellers, police officers, former employees who try to reinvent themselves with varying degrees of success.

The three novellas in “Rouge Street,” the first collection of his work published in English, are set in a tough neighborhood full of young dropouts, “heads hanging, smoking all the time, still not starving.”

Mr. Shuang’s prose is vernacular, and he doesn’t shy away from the unsavory choices his characters make to survive. There are murderers and drunkards. But he also lingers on the connections they forge, even if they are ultimately fleeting.

Religion is another motive. Itinerant preachers spread hope to single mothers, and churches serve as local landmarks. Mr. Shuang’s best-known work is a 2015 novella called “Moses on the Plain.”

On the surface, it’s a murder mystery. The characters quote from the book of Exodus as they ponder revenge and redemption. In one scene, retired workers protest plans to replace a statue of Mao Zedong with a gaudy golden bird. The gathering is eerie, almost ritualistic: “A group of old people in work uniforms walked down the middle of the road in a somewhat ragged formation, completely silent.”

Mr Shuang is not religious, but said he was fascinated by believers’ search for meaning. He had seen a similar quest in his parents’ embrace of socialism. During the layoffs, he said, “it is not only their source of income that collapsed, but also a kind of faith.”

Jia Hangjia, the pseudonym of an essayist from northeastern China, said “Moses on the Plain” rediscovered a period that many would have preferred to forget.

“It’s not like people processed what happened and then moved on. They just buried it,” Mr Jia said. “To dig these things up again and push for some kind of venting, I think that was very courageous.”

Mr. Shuang is hardly the first writer to examine China’s historical traumas. Renowned authors such as Mo Yan, the first Chinese citizen to win a Nobel Prize for Literature, have written about the scars of Mao’s failed collectivization campaigns or the country’s one-child policy.

Yet the experience of Northeast China had received less literary attention in the 1990s. Censorship has also become stricter — and only more so since Mr. Shuang began writing.

A commentary on the success of Mr. Shuang and other northeastern writers published in a Chinese Communist Party newspaper called their works “sincere.”

“But to wallow in this kind of writing,” the piece continued: “is what we don’t want to see. We need reflective literature, healing literature, literature that looks to the future and is full of power.”

A film adaptation of ‘Moses on the Plain’, which was set to premiere in China in 2020, was postponed without explanation. It’s now expected this year, with a more secular title: ‘Fire on the Plain’.

Mr Shuang said he thought fiction writers still had considerable leeway, due to their relatively small audience. Only one line was removed from “Moses on the Plain,” he said: a character asking, “If Mao Zedong were alive, would they dare?”

And Mr. Shuang is not an activist. His stories focus heavily on individuals and make little mention of the government.

Some critics have said they don’t go far enough in exploring the roots of the pain of that period. “He doesn’t talk about the why of history, the deeper historical meaning,” said Nie Zinan, associate professor of literature at Shenyang Normal University.

But for Mr. Shuang, the expectation that he will write about the Northeast at all has become a burden. In the decade since he left Shenyang, his visits have become less frequent. He now finds the city largely unrecognizable.

Zhang Yueran, Mr. Shuang’s wife and herself a leading novelist, said the Dongbei label had “brought him great benefit.” But, she continued, “when an author wants to expand to a broader stage, you naturally feel limited.”

Mr. Shuang has attempted to lift those restrictions, with some of his recent stories set in the early 20th century. Others show somber writers from Beijing.

But he is quick to emphasize that these newer stories are as representative of his current life as his previous works were. That is, maybe not at all.

“Fiction cannot be responsible for transmitting information,” he said. “As an author, I believe in telling the truth by lying.”

Siyi Zhao research contributed

One of China’s largest investment firms, Citic Trust, had a clear message to investors when it set a target of raising $1.7 billion to fund real estate development in 2020: there is no safer Chinese investment than real estate.

The trust, the investment arm of state-owned financial conglomerate Citic, called housing “China’s economic ballast” and “an indispensable value investment.” The money raised would be spent on four projects by Sunac China Holdings, a major developer.

Three years later, investors who put their money into the Citic fund have only recouped a small portion of their investment. Three of the fund’s construction projects are at a standstill or have been significantly delayed due to financing problems or poor sales. Sunac has defaulted and is trying to restructure its debts.

The unraveling of the Citic fund offers insight into the broader problems facing China’s ailing real estate sector. What started as a housing crisis has escalated into a full-blown crisis. The budgets of local governments, which relied on real estate income, have been destabilized. The shock to the country’s financial system has drained China’s capital markets.

Cooperation between the government, financial institutions and companies has boosted China’s real estate sector for years, paving the way for the non-stop construction that made real estate the largest sector of the economy. But the ties that once undermined growth are now deepening the decline as problems spread across the economy.

This month, China South City Holdings, a state-backed developer, warned that it does not have the resources to pay interest on its foreign debt, and investors agreed to restructure the debt to avoid possible bankruptcy. And Hywin Wealth Management, a major real estate investor, said it had to postpone some principal payments, citing ‘the economic downturn’.

Confidence in the investment sector was already shaky. In November, a financial giant that managed $140 billion in assets, Zhongzhi Enterprise Group, told investors it was “severely insolvent.” Zhongzhi’s asset management unit began missing payments to investors in July and said it had a financial shortfall of $36 billion.

For its part, China’s central government pledged this month to “actively and prudently resolve real estate risks” and help companies meet their “reasonable financing needs.” The problems have become so bad that it appeared Beijing, which has yet to offer lifelines to struggling developers, was finally prepared to intervene after more than 50 companies defaulted on their loans since 2021.

“Three years ago, no one could have dreamed of this number of bankruptcies,” said Andrew Collier, director of Orient Capital, an economic research firm in Hong Kong. “It’s quite staggering.”

Investors had confidence in real estate.

Trust firms like Citic are branches of China’s so-called shadow banking system, which sell investment products to corporations and wealthy individuals. They face few requirements to disclose information about their activities and manage them as a group $3 trillion of assets.

Real estate developers relied on trust companies to make loans and invest in companies that regulators deemed too risky for traditional banks. The trusts turned the loans into investment products that they then sold to Chinese companies and wealthy individuals, promising lucrative returns.

The market boomed when Citic Trust launched the Junkun Equity Fund and raised $1.7 billion for Sunac to tap. With property prices soaring and Sunac’s projects progressing and properties being sold, investors will get their money back and a share of the profits after three years. The payout for the Junkun fund, one of hundreds that Citic Trust offered, was potentially higher than a fixed-return investment, but there was also more risk.

Although Citic did not guarantee how much money investors would make, it included in marketing materials a list of Sunac’s “similar projects” that had delivered double-digit returns.

At least that’s how it should work.

Celina Zhang said that she invested about $420,000, a significant portion of her savings, into this fund in 2020 because Citic Trust was a reliable, big brand. A Citic investment manager all but assured her she would get her principal back and an annual return of more than 7.5 percent, Ms. Zhang said.

“At that time, I was quite confident in real estate,” said Ms. Zhang, 38, who lives in the southern Chinese city of Shenzhen. “Housing prices all went up.”

But from the start, developments faced challenges. The projects were a combination of residential and commercial properties in three southern cities – Chengdu, Guiyang and Shaoxing – and one in Xi’an in central China. And like the rest of the world, China struggled with Covid. Pandemic restrictions caused construction delays and negatively impacted real estate sales.

Citic Trust said in a statement that it has “robustly protected the legitimate rights and interests of its customers” and has made “some progress” in minimizing risks arising from the real estate market. It declined to comment on the Junkun fund.

Sunac did not respond to requests for comment.

The government was concerned about the market.

Also around the time the fund was established, policymakers in Beijing, worried about a housing bubble and reckless speculation, introduced new rules to curb excessive borrowing by developers. This caused money problems for many developers. In May 2022, Sunac said it had missed a repayment of the bond and warned it would not be able to make other debt payments.

The impact on Citic investments was drastic. Citic Trust was forced to suspend construction of the Chengdu project last year.

A Citic Trust official said in a November investor briefing that this happened because research showed demand would remain weak for months and that Covid lockdowns were making the situation unpredictable, according to a recording of the briefing reviewed by The New York Times . Citic said it feared sales would not keep pace with construction costs.

Preliminary sales have been slow for a mixed residential and commercial real estate project in Shaoxing, a coastal city known for its locally produced yellow wine.

Citic considered selling the project in January but struggled to find a buyer as developers scaled back, a company official said at the briefing. After sales slowed in July, Citic decided to try to find a company that would invest in the project to ease the financial burden.

In Guiyang, southwest China, Sunac started construction shortly after acquiring land use rights from the city government in May 2020 for about $245 million. But the project has been dogged by a series of stops and starts, including a month-long suspension in August due to “general financing issues,” according to a management report to investors.

When the Citic investment matured in October, Ms. Zhang said, she had received about $80,000 in payouts, although she was unclear whether that was interest on her investment or part of her $420,000 principal.

In November, Citic Trust held a briefing to calm investors and demanded an explanation for the missed payment in October. At the meeting, a company official said the projects retained some value and expressed hope that the government’s recent policies would help – even if there was currently no “clear tangible impact”.

The Citic official acknowledged that “the whole market is not good right now,” but she asked for patience.

“The money hasn’t arrived yet, so everyone will definitely be worried and angry – this is normal,” she said. “But don’t be too angry.”

The United States is embroiled in an emotional debate over anti-Semitism and freedom of speech on college campuses. The latest speech debate in China is about a chef’s video of how to make fried rice with eggs.

Egg fried rice is a staple of Chinese home cooking and one of the first dishes that many Chinese learn to cook. Think mac and cheese in America. That was probably why Wang Gang, one of China’s most popular food bloggers, did this multiple recipe videos about the dish in the past five years. Are “perfect‘ Fried rice recipes attracted reviews, and reviews of those reviews.

Then one of those videos drew the ire of the official Chinese media and the Internet.

His transgression? He posted a video of fried rice on November 27, two days after the anniversary of the death of Mao Anying, son of the founder of the People’s Republic of China, Mao Zedong. Mao Anying was killed in the Korean War while, according to legend, cooking fried rice.

For more than a decade, the liberal-leaning crowd in China has been doing just that celebrated November 25 is Thanksgiving Day in China. They believe that if the young Mao had lived, China would have become a hereditary dynasty like North Korea. The Chinese Internet and official media have disputed the account of his death, which was based on memoirs by retired generals, considering it an insult to both Mao Junior and Mao Senior.

It is a precarious time for every Chinese who engages with the public: academics, writers, journalists, entertainers and social media influencers. Cooking is one of the safest topics, and Mr. Wang, who started working in restaurants at 15, sticks strictly to food on his show. Yet he was drawn into a political vortex.

On social media sites, Mr. Wang was called “a traitor,” “a troublemaker” and “the scum of society.”

Daily life in China is becoming politicized. Public expression has become impossible when too many things are taboo. It is difficult to know, and sometimes impossible to know due to censorship, what can and cannot be said in the country.

The “egg fried rice” meme emerged more than a decade ago when the Chinese Internet, though censored, was freer. Now there are hardly any dissenting voices.

To circumvent internet censorship, Chinese people are resorting to code words – so much so that academics and writers are lamenting the decline of the Chinese language. Young people often use abbreviations of Pinyin, the Romanized spelling of Chinese characters, for anything that could be perceived as sensitive or taboo. I have seen Chinese people criticize my columns about the Chinese government by saying that they loved their “zf,” short for Zhengfu, or government. Even as they defended the state, they knew they were treading on treacherous territory.

China’s sophisticated and effective censorship system paradoxically leaves people in the dark about what they are not allowed to say.

After Hu Jintao, the former Chinese leader, was abruptly escorted out of a highly choreographed meeting of the Communist Party elite last year, many people who posted about it had their social media accounts suspended. They were mostly people who did not usually talk about politics and did not know the limits of state censorship. Several people with experience in politics told me they knew to use code words or abstain altogether.

I’ve written about how new recruits at a censorship factory had to learn history, such as the Tiananmen Square crackdown on pro-democracy protesters in June 1989, in which hundreds of innocent people were killed, so they knew what to look for. for.

Around the anniversary in 2022, Li Jiaqi, China’s top livestreaming salesman, pitched his viewers on a tank-shaped ice cream cake. He was cut off in midstream and remained silent for three months.

The symbolism of the fried rice meme is much less known than that of tanks in Chinese online discourse. It does not exist in the consciousness of the vast majority of Chinese, who have been taught by their government and their parents to keep their heads down and not worry about politics.

Mr. Wang, also known as Chef Wang, was born on June 11, 1989, a week after the Tiananmen Square massacre. He grew up in a village in Sichuan and left school at fifteen. Mr. Wang, who declined to comment, likely did not have much access to information beyond what the government wanted him to know.

Mr. Wang begins each video with a greeting: “Hello, I’m Wang Gang,” speaking Mandarin Chinese with a Sichuan accent. He combines his farm boy persona with professionalism as he works behind his wok stations and cooks dishes like one farm style breakfast and Mapo tofu. His following has grown to tens of millions on Chinese social media sites, plus two million subscribers to his own YouTube channel.

He calls himself a ‘grass-roots chef’, as evident from his intros. “I am grateful for every experience, grateful for this era and sincerely hope my videos can help everyone, allowing them to step into the kitchen and fall in love with cooking.”

“Grateful for this era” is the politically correct way of saying that he does not attribute his success solely to his personal talent and efforts, but that he sees it as part of China’s success as a nation. That shows that Mr. Wang is aware of the rules to stay out of trouble.

Some nationalist bloggers pointed out that Mr. Wang had posted egg fried rice videos in the past around the same time. They said he also posted the recipes around October 24, Mao Anying’s birthday.

The fact is that Mr. Wang has posted several fried rice recipes over the years, and he is not the only one who is being attacked for it.

The Weibo report of The People’s Daily, the official newspaper of the Chinese Communist Party, was criticized for reposting Mr. Wang over fried rice on October 24, 2018. Around the same time in 2021, the Weibo report of a state-owned telecommunications company posted the dish; his account has been suspended. Last month, two primary schools in the southeastern province of Zhejiang held a fried rice competition with 1,000 participants on the same day Mr Wang posted his recipe. The schools were attacked on social media by nationalists and their posts were deleted.

The consequences can be much worse. In 2021, police in southern Jiangxi province locked up a man for 10 days after posting a comment on Weibo that read, “Thanks, fried rice.”

Mr. Wang’s experience shows how far China will go in restricting freedom of expression.

The Chinese Academy of History, a state institution, called anything that links Mao Anying’s death to the justice ‘particularly evil’.

Hu Xijing, the former editor of The Global Times, the Communist Party’s tabloid, advised everyone to avoid the topic of fried rice completely. “In the future, especially around the birthdays of the martyr Mao Anying, public debate should avoid touching the topic of fried rice,” he wrote on his Weibo social media account.

Some people pushed back on the proposal. Banning any mention of egg fried rice in October and November, they noticedis both ridiculous and scandalous.

Mr Wang deleted the video recipe and apologized.

“As a chef, I will never make egg fried rice again. I won’t make videos about it either,” says Mr. Wang with a sour face said in his apology video, which ended with a deep bow. But he also had to delete that video. Commentators said his tone was coy and sarcastic.