The Wall Street Journal - 07.09.2019 - 08.09.2019

A6| Saturday/Sunday, September 7 - 8, 2019 ** THE WALL STREET JOURNAL.**

China for trial—that sparked

the initial protests. Mrs. Lam

refused to meet another of the

protesters’ demands, which

now number five, including an

independent inquiry into how

police have handled the pro-

tests. The city’s leader said

that a continuing investigation

into complaints by a pre-exist-

By tradition, Queen Elizabeth II

is expected to act strictly on

the advice of the government.

CARL COURT/PRESS POOL

Brexit Spat Tests Tacit Dictum:

Never Put the Queen on the Spot

ing police investigations body

would be adequate.

On Friday evening, demon-

strators gathered with trade-

mark umbrellas, a few dozen

wearing gas masks and hel-

mets, in front of the subway

station in the northern Kow-

loon area. They faced off with

police, who unfurled signs

JUSTIN CHIN/BLOOMBERG NEWS

WORLD NEWS

the world’s second-biggest

economy are increasingly un-

certain as output weakens and

business confidence sours.

Trade trouble with the U.S.

is Beijing’s foremost concern,

including new tariffs to make

its exports more expensive that

went into effect this past week

even as the two sides agreed to

restart talks in October.

China’s slowdown—testing

the government’s 6.0% base-

line for gross domestic prod-

uct growth this year—stems

from over-investment during

previous boom years. While

considered necessary by au-

thorities, the trade fight and

other challenges have hit

harder than expected, includ-

ing a major disruption in the

supply of China’s staple food,

pork, and turmoil in its tradi-

tional bridge to global mar-

kets, Hong Kong.

In a speech this week that

analysts said captured the

mood as the Communist Party

gets set to mark its 70th year

in power, President Xi Jinping

used the word “struggle” more

than a dozen times.

Plans to reduce the reserve

requirement ratio were sig-

naled by the government’s pol-

icy setting State Council,

which it cited as a near-term

response to the increasingly

complicated and challenging

external environment. The

State Council cited plans to al-

locate more money for voca-

tional training and to issue

bonds for construction, for ex-

ample to build railways.

Friday’s half-point reduc-

tion in the reserve require-

ment was the third such move

this year and lowered to 13%

the amount of reserves China’s

largest banks are required to

set aside. Smaller banks have

lower set-aside requirements.

The last time the rate

touched this level for China’s

biggest banks was just before

the global financial crisis in

2008, during a period when

the central bank had raised

the rate 16 times over about

two years in a bid to control

lending, according to records

published by the Bank for In-

ternational Settlements.

For some financial institu-

tions, the rate eventually

reached 20%. As the economy

has cooled more recently, the

central bank has been cutting

reserve requirements, and Fri-

day’s is the seventh in two

years. “This is the govern-

ment’s response toward a re-

cent series of weak data and

escalating tariffs,” said Jian

Chang, chief China economist

at Barclays.

—Lin Zhu, Chao Deng

and Liyan Qi

contributed to this article.

SHANGHAI—China added
fuel to its economy, releasing
billions of dollars to banks as
authorities struggle to revive
business sentiment in the face
of a protracted trade battle
with the U.S.
The technical measure by
the People’s Bank of China re-
duces the amount of money
commercial banks are required
to set aside and not lend—its
reserve requirement ratio.
The central bank on Friday
said 900 billion yuan ($
billion) will be freed up, an en-
ticement for lenders to finance
projects that might spur con-
struction and sustain employ-
ment.
New drivers of growth for

BYJAMEST.AREDDY

China Turns to Banks to Spur Growth

China’scentralbankadjusts

howmuchcommercial

bankscanlendbyrequiring

thatapercentageof

depositsissetaside.

China'srequiredreserveratio

Source: CEIC Data

22

12

14

16

18

20

%

 ’ ’ ’ ’

Friday’s reduction

in the reserve

requirement was the

third this year.

threatening to fire tear gas, in

a standoff that has become

commonplace at many demon-

strations.

Several demanded police

release surveillance footage

and said there were claims cir-

culating online that some

demonstrators had gone miss-

ing following the subway-sta-

tion clashes on Aug. 31. Some

had set up a makeshift memo-

rial with flowers and lights

near one subway entrance.

The government has said there

were no deaths.

The city’s subway stations

have increasingly become bat-

tlegrounds during this sum-

mer’s demonstrations.

Shortly before 9:30 p.m. on

Friday, police fired rounds of

tear gas canisters to disperse

the protesters at the subway

station. Dozens of riot police,

some followed by police vehi-

cles, then made their way

down streets leading from the

station, banging shields as

they went.

Further protests were

planned for the weekend, in-

cluding one that could again

disrupt traffic to the city’s air-

port.

HONG KONG—Thousands of
protesters gathered outside a
subway station Friday evening
where police beat people inside
a train carriage last weekend,
the first significant demonstra-
tion since the city’s leader be-
gan offering conciliatory mea-
sures earlier in the week.
Protesters hurled abuse at
police and demanded the re-
lease of surveillance footage
from the episode on Aug. 31,
in which riot police stormed
the Prince Edward subway sta-
tion following a mass demon-
stration that the police had
ruled illegal.
The latest protests signal
that concessions from the
city’s government this week
won’t fully quell street pro-
tests, following months of
demonstrations and fierce
clashes between protesters
and riot officers.
On Wednesday, Hong Kong
Chief Executive Carrie Lam an-
nounced the full withdrawal of
a bill—which would have al-
lowed the extradition of crimi-
nal suspects to mainland

BYDANSTRUMPF
ANDMIKECHERNEY

Hong Kong Activists Press Police on Subway Attack

Demonstrations continued on Friday in Hong Kong’s Central district, despite a concession from the city’s chief executive.

LONDON—Britain’s centu-

ries-old rules of government

have a sacrosanct tradition:

Don’t drag the monarch into

politics.

Amid the political ferment

of Brexit, even this golden rule

risks being bent.

Last month, a group of se-

nior politicians from Prime

Minister Boris

Johnson’s gov-

ernment qui-

etly met with Queen Elizabeth II

at Balmoral Castle in Scotland

to request she suspend Parlia-

ment for a month, a move

aimed at curtailing opposition

lawmakers from disrupting Mr.

Johnson’s Brexit strategy.

The queen complied, as is

the norm. But her decision un-

leashed a wave of criticism,

with some arguing the queen

should have denied the prime

minister’s request.

“The queen is never in-

volved, the queen will not be

involved,” says Brian Walker, a

constitutional expert at Uni-

versity College London. But

most of all, he says, “the

queen must never be embar-

rassed.” Buckingham Palace

declined to comment.

The royal snafu is just one

of several ways that Britain’s

opaque system of political

rules of engagement is being

stretched by Brexit.

Unlike in the U.S., the Brit-

ish constitution isn’t con-

tained in a single document

and the courts can’t be asked

as a last resort to interpret it.

Instead, it is uncodified,

wrapped up in a complicated

set of statutes, conventions,

and precedents, and guided by

one principle: Parliament is

sovereign. It is known as the

“good chap” theory of govern-

ment, according to historian

Peter Hennessy, where leaders

are expected to do the decent

thing and not rock the boat.

But what if the prime min-

ister ignores the will of Parlia-

ment? And what if the queen

ignores the prime minister of

the day? These questions are

emerging in large part because

of an anomaly in the British

political system: Mr. Johnson’s

government doesn’t have a

majority.

Normally Britain’s winner-

takes-all electoral system pro-

duces a strong government

with clear parliamentary back-

ing. After a series of defec-

tions over how to honor the

2016 referendum to split with

the European Union, the ruling

Conservative Party commands

only a minority in Parliament.

As a result, Mr. Johnson is

left trying to push through his

bold strategy—leaving the EU

on Oct. 31, even without an

agreement that would smooth

the split with Britain’s biggest

trading partner—against the

will of the legislature, which

has opposed a so-called no-

deal Brexit.

Referendums have a hazy

status in British law, given the

primacy of Parliament. Brexit

added a further complication:

While the British people voted

to leave the EU in 2016, they

weren’t asked how. That has

been left up to lawmakers who

have squabbled over this for

three years.

“Referenda do create prob-

lems for parliamentary democ-

racies, always,” says Murray

Hunt, director of the Bingham

Centre for the Rule of Law, a

nonpartisan research institute.

On Friday, the House of

Lords completed the parlia-

mentary approval, against Mr.

Johnson’s wishes, of a law to

force the government to delay

Brexit by three months if a di-

vorce deal with the EU isn’t

ratified by mid-October.

However, London must se-

cure an agreement with the

EU to ratify the extension—

something Mr. Johnson says

he won’t ask for.

If Mr. Johnson refuses to

comply with the law, he could

quit or he could wait for the

House of Commons to force

him out with a vote of no-con-

fidence. A refusal to respect

the law could lead to Mr.

Johnson being punished, al-

though it is unclear what pen-

alty he would face.

Alternatively, Mr. Johnson

could advise the queen—who

acts strictly on the advice of

government ministers—not to

sign the bill, thereby prevent-

ing it from becoming law.

Mr. Johnson argues that

Parliament must respect the

will of the people to leave the

EU, as expressed in the 2016

referendum. He says it is the

people who are ultimately sov-

ereign, not Parliament.

Following the English Civil

War in the 17th century, Par-

liament gained supremacy

over the monarch. But the

monarch still had significant

sway. Queen Victoria person-

ally suspended Parliament reg-

ularly between 1837 and 1854.

Even today the monarch still

has to rubber-stamp laws.

The last monarch to refuse a

law presented by Parliament

was Queen Anne in 1708. Royal

assent is considered a formality

if the queen is advised to sign a

law by her ministers. There has

been much debate among con-

stitutional experts about what

would happen if the current bill

isn’t presented to the queen to

sign or if Mr. Johnson advises

her not to sign it. The courts

may have to intervene.

BYMAXCOLCHESTER

ANDJASONDOUGLAS

ANALYSIS

The ‘good chap’

theory ofgovernment

expects leaders to

do the decent thing.