The Wall Street Journal - 07.09.2019 - 08.09.2019

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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.


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



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-
New drivers of growth for


China Turns to Banks to Spur Growth



Source: CEIC Data








 ’ ’ ’ ’

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-
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-

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


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
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
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.



The ‘good chap’
theory ofgovernment
expects leaders to
do the decent thing.
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