GroundTruth

HONG KONG – In the bleak morning light of my first full day here, the stock markets in Hong Kong and on mainland China began reeling the moment they opened. News of the Monday meltdown on Wall Street hit hard and hit fast.

Monday had been a banking holiday here, a day to worship ancestors. So while the crisis ensued in New York, the people of Hong Kong and China were taking a long weekend and celebrating the mid-harvest festival by lighting candles to remember the spirit of their loved ones who’ve passed on.

The lights could be seen flickering in lanterns in some homes the night before. But in the glaring light of this Tuesday morning, the future of Asia’s economy — the stunning collapse of two iconic firms on Wall Street — was in sharp focus. And it was the topic of just about every conversation in Hong Kong.

I am here to meet with our Asia editor Matt Driskill and to begin a recruitment drive of a dozen correspondents across Asia for Global News Enterprises, our new, web-based international news organization that is set to launch in January of next year.

Of course, it dawned on me that these are dark days for the global economy and that that may perhaps not bode well for our little start-up. We are a destination site, which means we will be a free site relying on on-line advertising as one of our key revenue streams.

Our concerns represent a drop in the ocean compared to the tidal wave of economic crisis sweeping the world, leaving thousands of people without jobs and tens of thousands more with uncertain futures. Jittery investors were left worried that if a firm as iconic as Lehman Brothers can fall, than anyone can. In the big picture, our concerns were miniscule.

But, like all entrepreneurs, I am tightly focused on what all this might mean for us. We are by global standards a small company with a business plan that calls for $10 million in investment. That will allow us to hire the team we need in Boston and 70 correspondents in 50 countries.

Approximately $8.5 million of that money is already raised, and we have a short list of other investors who are extremely interested in what we are doing. The short answer to the question of whether we should be worried, my co-founder and our CEO Phil Balboni, assured me is this: “We’ll be fine.”

“Of course, I’ve thought about it and we should think about it. But the truth is I am not worried. We are very fortunate to have solid individual investors who can withstand a downturn in the market,” added Balboni, calling me from our offices on the Boston waterfront.

And from an editorial standpoint, this turmoil in the world markets only seemed to underscore the urgency of our mission at Global News. With events like these, Americans need a new kind of web-based international news organization like ours that is seeking to build a stellar team of correspondents focused on global news and how the stories they cover are interconnected.

This is exactly the kind of crisis upon which we hope to shed light through our correspondents hard work as reporters and storytellers going out in the world to unravel the complex stories that affect us all. We will have stories that go deeper than the alternately dry and shrill and always pat standups of business reporters. They cover the economy like its a sports match with clear winners and losers when it is infinitely more complex and more layered.

Nothing proved the inter-connectedness of our global economy — the delicate economic web that holds us all together — than the news rocking the world markets.

As the markets opened, Matt Driskill and I headed for the office of the former Chief Executive of the Hong Kong Special Administrative Region (SAR) of the People’s Republic of China. We had scheduled a meeting with the former Chief Executive, Tung Chee Hwa, and as it turned out it was an interesting morning to hear his views on the economy and the future of China – US relations.

Bank of China in Hong Kong (Wikipedia Photo)

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We climbed the stairs of the grand Colonial style building where he has his offices. Perched on a hill, its wide terrace once looked out at the harbor. But now the view is obstructed by the towering Bank of China and other shiny, new steel skyscrapers sprouting across Hong Kong.

At age 71, Mr. Tung Chee Hwa, or “C.H.,” as he is known by friends, has the grand bearing of a shipping tycoon which is exactly what he was before he got involved in politics and became the first Chief Executive of Hong Kong and was caught in the frothy cross-current of the 1997 handover from British rule to Chinese rule.

The SAR is an arrangement that was put in place to give Hong Kong limited autonomy and some independent governance from the central government in China. The balancing act between the central government and the unique and entrepreneurial spirit of Hong Kong has been more and more difficult to maintain in the decade since the Chinese took over.

Over a cup of Chinese tea, we jumped into the conversation by asking Mr. Tung about the economic turmoil on Wall Street and what it would mean for China.

“Export is very important for China. And so the bad news in America will definitely have an impact on China. The two economies are interconnected,” he said.

But he then carefully spelled out that they are less connected then they used to be, that China has carefully developed a domestic economy for its goods as well which is a balance of trade that is a big part of what makes it such a superpower.

“In the old days, they used to say when America sneezes, the world catches a cold… If you sneeze once now, well, it will be alright in the world economy … But you yourself America, don’t go catching a cold,” he said.

Very quickly, Mr. Tung offered a list of complex problems the US, China and the world are facing beyond the perils of the financial markets. He listed climate change, limited water resources, the spread of disease, the rising inequality in income across the world, the food crisis and energy demands.

“All of the issues we face are connected. The issues are really complex. We don’t have solutions immediately. We need to work together. We are in this thing together, the US and China. We need to work together to find the solutions,” he said.

He now heads up a new China-United States Foundation that seeks to promote better understanding between the two countries. He offered a long and candid assessment of China – U.S. relations, but explained that he prefers to keep a low profile and asked that most of it be on background. We agreed. And he promised to provide an in-depth interview with us down the road and Matt plans on following up on that.

After walking down the hill from the mansion, we went back to the hotel. There we met Anson Chan Fang On Sang. She is a woman whose elegance and sophistication and passion and love for order and the rule of law seems to embody the personality of Hong Kong.

She was eight years old when her parents moved from Shanghai in 1948 to Hong Kong. She was a member of the Legislative Council of Hong Kong and before that was the head of Hong Kong’s civil service. She is out of politics these days, but still an active agent of reform and constantly challenging the status quo in the central government on mainland China and trying to help Hong Kong keep its edge, and some sense of its independence.

She too sees the chaos of Wall Street as directly connected to the economic health of China. But she saw something else that is not as openly discussed among the pundits analyzing the impact of the fallout in the stock market from the bankruptcy of Lehman Brothers.

“There is a political impact to this in China as well,” she said.

She said the crisis occurs at a time when there are literally hundreds of small civil protests across China which go largely uncovered by the media. She says small villages are fed up with the collusion between government and big business.

She also cited the protests by outraged parents who lost their children in the earthquake. They have spoken out passionately about the corruption that led to the collapse of shoddily built schools and killed their children during the hurricane. She says if an economic downturn coincides with this unrest, that there could be an unpredictable result.

“This is inherently very destabilizing,” she said.

“These are very uncertain times,” she added.