This is humiliating for Xi because he can't get the Hongkees to have an extradition treaty with China even though HK has an extradition treaty with its arch enemy, the US as well as its former colonial master, the UK and its rival city, Singapore.
HERE IS WHAT THE NEWSPAPERS DID NOT REPORTHONG KONG: Hong Kong Chief Executive Carrie Lam on Wednesday (Sep 4) said that she will officially withdraw the extradition Bill that triggered months of protests so the Chinese-ruled city can move forward from a "highly vulnerable and dangerous" place and find solutions.
The announcement came after Reuters reports on Friday and Monday revealed that Beijing had thwarted an earlier proposal from Lam to withdraw the Bill and that she had said privately that she would resign if she could, according to a leaked audio recording.
In my opinion, the Hongkees have not much to lose by their protests. But the rich tycoons who run the city do. Let me explain. The tycoons own most of the land in HK. So it is in their interests to increase the value of land and properties. This makes it expensive for the average Hongkee to buy property.
Only 51% of Hongkees own their own property as compared to 91% in Singapore. For many Hongkees, they do not have much to lose. So they are willing to fight for the only thing they have - their freedom, which Xi wants to take away.
But the reality for HK's poor is even worse than what the 51% number reveals. Hundreds of thousands living in "coffin cubicles":
Very cramped bedrooms.
Toilets and Kitchens merge.
This is how I diagnose the situation. Polybius, the Greek historian wrote about the cycle of political systems. According to him, there were three types of government in ancient Greece - monarch, aristocracy and democracy.
In a monarchy, one man has most of the power. As time goes on, he will abuse his power to serve himself and his family and then gets thrown out. Replacing one man rule is the aristocracy, where a few people have most of the power. When they abuse their power to enrich themselves or whatever, they will be thrown out and replaced by a democracy.
HK is in the second phase where the rich tycoons run the country. (The tycoons are the modern equivalents of the aristocrats in Polybius' day.) So of course, they use that power to enrich themselves at the expense of others. These tycoons want to see property prices go higher and higher, making living conditions worse. That is why the Hongkees are so persistent in their protests. For many, they have nothing to lose but their freedom.
One more thing, Polybius said. In a democracy, the common people will have most of the power. Whey they abuse their power to oppress the others, the system will also collapse. The emergence of the unsustainable welfare state is the prime example of this. This leads to huge debt, high taxes and capital flight. It is the "aristocratic" class (ie In modern times, they are the job creators and successful entrepreneurs )that get oppressed by higher taxes.
He warned that when the system becomes nonviable, a dictator (monarch in his day) will emerge and the cycle starts again. This happened in Chile where Pinochet took over and in Venezuela where Maduro took over. The former was a capitalist dictator while the latter is a Socialist dictator. The former succeeded in restoring prosperity and democracy with his free market policies. The latter will fail since his Socialist policies are the exact opposite of Pinochet's policies.