Hong Kong

Selected by Beijing in 1996, Tung Chee-hwa’s tenure shaped post-handover Hong Kong during a turbulent political era.

Hong Kong has given a state funeral to Tung Chee-hwa, its first post-colonial leader, only the third time the city has granted such an honour since Britain returned it to Chinese rule in 1997.

Senior Chinese and Hong Kong officials bid farewell to Tung at the Hong Kong Funeral Home in North Point on Sunday, a day after a public vigil that drew dozens of political and business figures.

Tung, Hong Kong’s first chief executive, died on September 8 at the age of 89.

Members of the public could pay their respects by signing condolence books at three community halls until Sunday noon.

The funeral committee, made up of 87 members, was chaired by Shi Taifeng, a senior Chinese Communist Party Politburo member and vice chairman of the Chinese People’s Political Consultative Conference (CPPCC), the top political advisory body, underlining the level of official backing from Beijing.

Shi attended the funeral alongside Xia Baolong, Beijing’s top official for Hong Kong and Macau affairs; current chief executive John Lee; former chief executives Leung Chun-ying, Carrie Lam and Donald Tsang; and other political and business figures, reported government-funded Radio Television Hong Kong (RTHK).

Lee and Leung were among the pallbearers who carried Tung’s coffin, draped in China’s national flag, from the hall to a hearse, which headed to Cape Collinson Crematorium.

A shipping tycoon with little political experience, Tung was selected in 1996 by a Beijing-appointed committee to become Hong Kong’s first leader after the 1997 handover from Britain.

Tung led the city through the 1997 Asian financial crisis and the 2003 SARS outbreak, and mass protests that year forced him to shelve proposed national security legislation.

He was re-elected unopposed in 2002 but resigned in 2005, midway through his second term, citing poor health, in a move widely seen as driven by Beijing’s loss of confidence in him.

He went on to serve as a vice chairman of the CPPCC until 2023.

Two business leaders, industrialist Ann Tse-kai and tycoon Henry Fok, who both served as vice chairs of the CPPCC, were given state funerals in 2000 and 2006, respectively.

Chinese state media described Tung as a “renowned patriot”, while his successor, Tsang, called him “an easy-going, gentle and refined man with a broad-minded outlook and far-reaching vision”.

Critics recalled his tenure as marked by governance struggles and public discontent that never fully recovered after the financial crisis.

Court also acquits Dow Jones on the charge of dismissal over Selina Cheng’s leadership role with the Hong Kong Journalists Association.

A Hong Kong court has convicted Dow Jones for trying to deter a journalist from taking a union role, but also acquitted the publisher on the charge of dismissal over the role, in a case that raised concerns about media freedom in the city.

Selina Cheng, who was fired by the Wall Street Journal (WSJ) in July 2024, had accused the newspaper’s publisher Dow Jones of unlawfully terminating her employment over her role chairing the Hong Kong Journalists Association (HKJA) and of trying to prevent her from standing for a union position.

The court found the company guilty on Thursday of trying to prevent Cheng’s right to run for the union chairmanship.

However, the judge sided with Dow Jones’ argument that she was made redundant because of corporate restructuring, and not due to her role as HKJA chair.

The right to take part in a trade union is protected by Hong Kong’s labour laws. An employer found guilty on “prevent or deter” charges could be fined up to 100,000 Hong Kong dollars ($12,755).

“If reporters’ employment rights are not sufficiently safeguarded, or when their rights are violated and not enforced in law, then we can no longer work safely as reporters,” Cheng told reporters outside the court after the ruling.

The judge said the company’s requirement that Cheng seek prior permission to take a union role was an “unjustified deterrent” of her rights.

Dow Jones said it disagreed with the ruling and was evaluating next steps.

“The Wall Street Journal has a long and proud history as an employer in Hong Kong. Throughout that time, we have remained deeply respectful of its labour laws and supportive of our employees’ rights, while publishing excellent, impartial journalism about the region,” a spokesperson said.

Sentencing is expected to be handed down at a later date.

Cheng launched a private prosecution last year for illegal termination, after filing a complaint with the Labour Department that did not result in a prosecution.

Founded in 1968, the HKJA is Hong Kong’s longest-established journalists’ organisation and one of the last remaining groups advocating for media rights in the city.

Although Hong Kong was once known for its independent news outlets, media freedom has come under strain and many outlets have disbanded since Beijing imposed a 2020 national security law following sometimes violent pro-democracy protests, according to international rankings and HKJA surveys.

Shares in fast-fashion giant Shein fell as much as 10% on their trading debut on Hong Kong’s stock market on Tuesday, before recovering some of their losses, following years of delay to the company’s plans to list publicly and regulatory setbacks in Europe and in the US.

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Shein’s initial public offering opened on 24 August, with the final share price set a week later on 31 August. Trading began the following day, on Tuesday.

The gap reflects standard IPO process, as investors placed their orders over about a week, the banks running the deal then fixed the final price and decided who got shares, and trading opened a few business days later once the exchange gave the final go-ahead.

The listing marks the end of a long search for a stock market willing to take Shein after plans to list in New York and London stalled amid scrutiny over its Chinese supply chains, forcing the company to turn to Hong Kong instead.

New US and EU tariffs on low-cost parcels from China, along with rising shipping costs from the war in Iran, have contributed to Shein’s swing from a $395 million (€340mn) profit to a $99 million (€85mn) loss in the first quarter of this year.

Shein raised about $1.7 billion (€1.46bn), pricing shares at HK$48.56 (€5.33) each, in one of the city’s biggest share sales this year.

“Shein’s Hong Kong listing marks a new starting point,” said Leigh Gui, Shein’s chief financial officer, in a short speech at its listing ceremony.

But in early trading, the shares fell to below HK$44 (€4.83) before losses narrowed.

Tariffs squeeze profits

Shein has built its appeal to customers on ultra-fast, affordable fashion, delivered from China to the West within days.

However, the end of “de minimis” tariff exemptions in the US and the European Union has raised duties on low-value parcels from China, including Shein’s products. Higher logistics costs, driven partly by the war in Iran, have also squeezed the company’s low-price business model and profitability.

Tariff costs have forced Shein to raise prices, “cutting into its main advantage,” said Jacob Cooke, CEO of WPIC Marketing + Technologies.

Back to its roots

Shein, pronounced “she-in,” earlier explored listing its shares in New York and London, and moved its headquarters from China to Singapore in 2021.

But increasingly strict scrutiny by Beijing and by regulators in the US and Europe led it to embrace its Chinese roots and switch to a Hong Kong listing.

Launched in 2012 in China, much of Shein’s operations were in the southern province of Guangdong before it moved its corporate headquarters out of the country.

“Guangdong is Shein’s roots, and the starting point of our journey,” founder Sky Xu said in a speech in February.

Pivoting its focus back to China also highlighted the advantages Shein derives from a supply chain system that “only exists” in Guangdong, said William Ma of GROW Investment Group, referring to its small-batch, fast-response manufacturing model.

Shein has hit other roadblocks in expanding in Europe. In February, the EU launched a probe into the company with a focus on “illegal” products, including alleged child sexual abuse material.

In May, Shein acquired San Francisco-based eco-friendly clothing retailer Everlane, a move some analysts said was not the best fit.

Hong Kong’s IPO boost

The company’s market value was roughly $27 billion (€23.2bn) as it listed in Hong Kong, a fraction of its peak valuation a few years ago.

“Shein has probably missed its golden listing window due to the shift of momentum toward AI and tariffs, which can affect valuations and profitability,” said Gary Ng, a senior economist for Asia Pacific at French bank Natixis.

Still, Shein’s listing is welcome news for Hong Kong, as the Chinese territory makes increasing efforts to hold onto its role as a global financial hub following a downturn in 2023.

Hong Kong’s stock exchange has had a strong year for IPOs, raising more than $40 billion (€34.4bn) so far.

There is also a backlog of companies seeking to list there, said Lorraine Tan at investment research firm Morningstar.