Those concerned about the political chaos and economic collapse in Hong Kong (myself included) breathed a sigh of relief on Nov. 24, 2019, when pro-Democracy voters scored a major electoral victory in Hong Kong’s local elections.

By itself, the local pro-Democracy officials don’t have much leverage versus Beijing. But the result showed that everyday citizens in Hong Kong are squarely on the side of protesters and opposed to the Communist dictators in China.

The hope was that the pro-Democracy politicians could provide a platform for reconciliation talks with Beijing that could ensure freedom and some autonomy for the Hong Kong people at least until 2047, as promised in the 1997 treaty that set up the current Special Administrative Region (SAR) in Hong Kong. Don’t bet on it.

The election results were alarming to Beijing and redoubled its determination to squash the demonstrators. Beijing not only fears the demands for democracy in Hong Kong. They also fear that such sentiments could seep into mainland cities such as Wuhan, Nanjing and Chongqing in ways that Beijing could not control.

It’s just a matter of time before Beijing strikes a decisive blow against the protesters. This article describes how China has set up a military command center on the mainland side of the border with Hong Kong to direct a full-scale military intervention when the time is right. This military command center is designed in part to bypass existing civilian political liaison channels that have been used to communicate between Beijing and Hong Kong in the past.

The crackdown on Hong Kong is coming. The financial chaos we’ve seen so far is just the beginning. It’s not too late for investors to get out of Hong Kong and Chinese stocks and bonds before the meltdown gets much worse.

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