Remember Stephen Roach? Yep, the former Morgan Stanley Asia chairman who not so long ago declared “Hong Kong is finished.” Well, he’s done a proper about-face and is now waving the China flag, much to everyone’s surprise. Recently, in his Project Syndicate piece, he spotlighted how China’s investment in scientific R&D has leapfrogged to match the US, warning that American government support is falling way behind. If you think the US still has AI in the bag – not so fast. China’s catching up, and fast.
After declaring “Hong Kong is finished,” Roach has now become “China’s best friend.” Lately citing data, he notes that China’s investment in scientific R&D has reached parity with the US, and government support for basic research is far greater than in America. While the US still leads in AI, China is set to overtake.
Trump’s Budget Axe: Making It Easy for China
In his article, Roach points out that while the US kicked off the AI arms race, it doesn’t mean it’ll have the last laugh. There’s more to winning than just powerful chips; talent, strategy, and software matter big time – and China’s been getting its long game on. The “2024 Global Innovation Index” backs this up: China’s now ranked 11th (that’s up 32 slots in 15 years!), while the US holds onto 3rd. Roach warns that the critical bit – basic scientific research – is precisely where Trump’s slashing funding. US federal support for foundational R&D has plummeted from over 30% in the late ’70s to around 10% by 2023, with Trump aiming to cut it even further to levels not seen since 2002. Not exactly a winning strategy.
Roach says Trump’s deep cuts to federal basic research funding have rolled it back to 2002 levels, handicapping scientific innovation and surrendering the lead to China.
Meanwhile, China isn’t just resting on its laurels. By 2023, Chinese spending made up 28% of global R&D—almost neck-and-neck with America’s 29%. Given Beijing’s momentum, Roach suggests China likely hit parity last year – and it’s poised to surge ahead. He even cites Jimmy Goodrich (Center for Strategic and International Studies) who argues that Trump’s decisions are basically handing over America’s long-held research lead to China.
Swapping Tunes: Roach’s Change of Heart
If you’re wondering why Roach sounds so different these days, here’s the tea: After his infamous “Hong Kong finished” call, he faced some serious blowback. Realizing you don’t mess with the financial gravity of mainland China and Hong Kong, he started laying the groundwork for a dramatic turnaround. Now he likes to quote John Maynard Keynes: “When the facts change, I change my mind.” That’s not flip-flopping, he says—just smart thinking. Unlike “China collapse” prophets like Gordon Chang, Roach claims he’s always been Team China.
So, what do we make of Roach’s latest? It’s simple: China’s gunning hard in the AI race, thanks in no small part to America’s own self-inflicted wounds. As Roach tells it, the US should be genuinely worried.
Lai Ting Yiu
What Say You?
** The blog article is the sole responsibility of the author and does not represent the position of our company. **
As the Year of the Horse approaching, Hong Kong BNO holders in the UK are bracing for a gut punch. The festive season brings no joy—only anxiety. Mid-February marks the deadline for the UK government's consultation on raising permanent residency thresholds, and the verdict on whether BNO holders get a pass is about to drop.
The Home Office floated immigration reforms that would keep the "5+1" rule intact—five years of residence before you can apply—but the bar just shot up, with higher English proficiency requirements and stable income. For many, these hurdles are insurmountable.
Mahmood's stonewalling to BNO holders' demands signals bad news. The February verdict looms.
Hong Kong BNO holders fired off "five demands" to the authorities, pleading for relief. Home Secretary Shabana Mahmood's response was ice cold. Zero acknowledgment of their demands. Her dismissive tone signals one thing: exemptions for BNO holders look dead in the water.
If the final call goes all the way, thousands who waited five years will crash at the finish line. A return wave to Hong Kong is inevitable. The Hong Kong government needs to get ready.
The Dual Knockout Blow
The UK government didn't just raise the bar—it installed a double gate that slams shut on 60,000 people. First gate: English proficiency must hit B2 level, equivalent to A-Level, practically university standard. Second gate: annual income over the past three to five years must reach at least £12,570, with tax records to prove it.
Surveys by Hong Kong migrant organizations paint a grim picture: if these "dual requirements" become reality, 30% of BNO holders—roughly 60,000 people—will fail to qualify and get filtered out. No wonder panic is spreading.
While anxiety mounts, the UK government plays coy. Ambiguous statements. Equivocal attitudes. Nobody can read their hand. Now, with just one month until the announcement, BNO holders are reaching peak agitation. A group of Hong Kong voters in Mahmood's constituency drafted a joint letter, restating the "five demands" and requesting a face-to-face meeting to apply pressure.
Mahmood responded quickly—but only to say Hong Kong BNO holders could apply for permanent residency after five years. As for the "five demands"? Crickets. Instead, she reiterated that those granted permanent residency must meet three criteria: being "well-integrated," "economically self-sufficient," and "committed” to the communities they join.
Mahmood Goes Silent
One Hong Kong BNO holder who signed the petition decoded those three phrases: "integration" and "commitment" are code words for English proficiency and income levels. Translation: BNO holders applying for permanent residency must also clear these two hurdles.
These Hong Kong residents sent a follow-up letter to Mahmood, requesting a meeting to present their case in person. Her response? Radio silence. Phone calls to her constituency office go unanswered. She's clearly ducking any face-to-face encounter.
Mahmood is stonewalling, and nobody can do a thing about it. Frustrated BNO holders vent to yellow media outlets, angrily branding her "heartless." But here's the reality check: the Labour government's approval ratings are tanking. Reform UK is breathing down their necks on immigration. Immigration policy will err on the side of restriction, not relaxation. Naturally, they're inclined to treat BNO holders the same as everyone else. No special treatment. No "sentiment." The "five demands" might as well be whispers in the wind.
Two Paths Forward
Friends living in the UK lay out the scenario: if the UK government announces "no relaxation" next month, BNO holders who can't meet the requirements face two choices.
First option: return to Hong Kong and start over. After all, life in the UK hasn't been entirely rosy—living day after day in anxiety. "Returning home" might actually be a relief.
Second option: continue to "temporarily reside" in the UK on a BNO visa, becoming long-term temporary residents. But they'll remain in an unstable state, which won't be comfortable.
There's also a thornier complication: some BNO families migrated to the UK with their parents, and one spouse hasn't worked or earned any income for several years. If these family members don't meet the criteria for applying for permanent residency, it could trigger family separation or force the entire family to return to Hong Kong. They'll face an agonizing decision. Quite a mess.
No exemptions? Brace for the return wave.
My friend predicts that if the worst-case scenario materializes, a return wave is sure to come. For Hong Kong, there will be upsides and downsides. Either way, the government needs to get ready and figure out how to handle it.
