Hello Hong Kong: No such thing as Communist capitalism

There is also no such thing as peaceful coexistence with Communists. And there is no such thing as a compromise with Communists. Any appearance of compromise is a stalling tactic on the part of Communist negotiators.  

Which is to say that Beijing has gotten many Hong Kong residents into the untenable position of demanding 'concessions.' Once you're in the position of handing out concessions, that means you rule.

So any further concessions that Beijing might make to the Hong Kong protesters only hasten the day when it becomes unavoidably obvious that any freedoms in Hong Kong are a managed illusion to salve the conscience of foreign investors,  boards of directors for Western global businesses, and non-Chinese consumers who defend freedom on the one hand and buy Chinese-made goods with the other.  

As to whether panicked money flight from Hong Kong might at least wring concessions that would hold for 15 minutes, I see the Drudge Report linked to a lengthy article today at the Wall Street Journal that tries to examine just how much capital outflow has been happening:

[...]

The monetary authority said there was no noticeable outflow of funds from the Hong Kong dollar or from the banking system, based on their latest statistics and the financial-market situation.

Comprehensive official data on capital flows is available only with a delay of several months.

And any outflows would follow many years of funds moving the other way. In March 2018 the monetary authority said the city had seen some $130 billion in inflows since the U.S. began quantitative easing, or loosening monetary policy by buying assets, in 2009.

However:

[...]

TransferWise—a London-based company that facilitates international bank transfers, primarily for individuals and small businesses—said it has seen a significant pickup in outbound flows from Hong Kong since the protests began.

The ratio of money moving into and out of Hong Kong was fairly consistent until a few months ago but has climbed as protests in the city intensified. TransferWise said that for every $1 that customers moved into Hong Kong in August, about $2.64 left the city.

[...]

The biggest worry for investors, as the WSJ article details, is the weakening of the Hong Kong dollar. 

[...]

 Ken Cheung, chief Asian foreign-exchange strategist at Mizuho Bank, said the weakening of the Hong Kong dollar against the U.S. currency, despite their respective interest rates, was a worrying sign of capital outflows. He said a falling stock market could indicate some people were shifting money abroad.

The Hong Kong dollar has been pegged to its U.S. equivalent since 1983. The de facto central bank, the Hong Kong Monetary Authority, lets the U.S. dollar trade between 7.75 and 7.85 Hong Kong dollars, and buys or sells greenbacks to keep the currency pair within those bounds.

The Hong Kong dollar traded at 7.8399 Friday, near the weak end of the band, even though interbank borrowing rates in Hong Kong are higher than their U.S. counterparts, which would usually help buoy the currency.

[...]

So if you're looking for signs of gale-force warnings, you'd want to watch the price of the Hong Kong dollar. The caveat is that you'd need a pretty special barometer given Beijing's skill at currency manipulation. But if the outflows got big enough, the currency traders would have to throw in the towel and this would be the leading indicator to gauge how much faith Chinese have in their money.  

Yet all discussion about technical financial factors masks the fact that Hong Kong's freedom defenders are still stubbornly trying to pound the square peg of Capitalism into the round bottomless hole of Communism. They're getting plenty of help in sustaining their delusion from Westerners who are happy to do business in Hong Kong but wouldn't be caught dead living under Communist rule.

********