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Hung Ho-fung
Translated by SC
The National People’s Congress (NPC) has forcefully implemented the Hong Kong version of the National Security Law. In 2003, Beijing shelved Article 23 legislation under strong public pressure, but it tried to revive the bill every now and then for 17 years. Recently, we have heard from the news that Beijing asked the Hong Kong government to relaunch the Article 23 legislation. This proves that it was not until recently that Beijing has been urging Hong Kong to make the law on its own and limit the freedoms which Beijing sees dangerous to national security. If so, it would be difficult for other countries to cease the recognition of the autonomy of Hong Kong.
Now Beijing has bypassed Article 23, the Hong Kong government and the Legislative Council and directly passed the law through NPC. It is a drastic change in mindset which reflects that Beijing, after its failure in putting forward the Fugitive Offenders Ordinance amendments due to the huge social backlash and the lack of active support from and even implicit or explicit opposition from its business allies in Hong Kong (Article 23 legislation failed) this way. Therefore, Beijing has lost its confidence in Hong Kong, including civil servants, the business sector and even pro-establishment political parties, and it cannot afford the enormous risk of another failure of Article 23 legislation. The implementation of national security law means that the model of indirect rule over Hong Kong through Cantonese-speaking loyalists is now bankrupt.
Technically speaking, the implementation of the national security law by Beijing is flawless, but in the broader contexts of global politics and economics, it is a high-stakes bet. The moderate pan-democrats call for compromises with the Communist Party of China because even if they can make any progress, they can at least protect the remaining freedoms under “one country, two systems”. Young people who support full-fledged resistance have attacked and ridiculed this view for years. According to them, no matter how careful the moderates are, the remaining freedoms of Hong Kong have already vanished, so people must fight for their rights within the limited time and space and maximize the pressure on the totalitarian regime.
After the Umbrella Movement in 2014, the arrests and imprisonments of moderate leaders, the disqualification of legislators and candidates, and the proposed amendments to the Fugitive Offenders Ordinance last year have eroded the influence of moderate protesters and raised support for valiant groups, and even led to the emergence of “mutual destruction” rhetoric. Now since Beijing asserts full control of Hong Kong directly, it undoubtedly makes the moderates who are still finding space for freedom within the framework of “one country, two systems” look even more ridiculous.
Beijing may believe that police brutality has successfully contained the protesters and that a tougher crackdown will not lead to chaos. I am afraid this view is just self-deception. Beijing dared to push for amendments to the Fugitive Offenders Ordinance last year probably because it thought the post-2014 crackdowns had weakened the opposition. As a result, the proposed amendments to the Fugitive Offenders Ordinance last year, to the surprise of Beijing, triggered a powerful revolt. Beijing uses its heavy fist to eliminate the space for moderate democrats through national security law, and continues to push public opinion in the direction of the protesters. It is still unknown if this will intensify new waves of resistance, which have already been building up after the epidemic subsides, and make Hong Kong ungovernable like Palestine or Northern Ireland in the past.
Beijing may think only Hong Kong will lose if “mutual destruction” occur, so Beijing is not afraid. On the contrary, protesters who support the “mutual destruction” rhetoric believe that it will only escalate the spiral of resistance and repression: It may force the international community, especially the United States, to impose sanctions on Hong Kong or even cancel the status of Hong Kong as an independent customs territory. As a result, it may jeopardize Hong Kong’s status as China’s only offshore financial centre and region which can import sensitive advanced technologies. Thus, Chinese enterprises, the government and the rich and powerful may bear the cost.
Despite the escalation of protests and police brutality last year, the performance of the real estate and stock markets has yet to lead to “mutual destruction” regardless of how chaotic the situation was. However, the United States immediately enacted the “Hong Kong Bill of Rights and Democracy”, adding provisions not directly related to democracy and human rights in Hong Kong which can prevent China from using Hong Kong to bypass US export controls. Thus, the US may be ready for China’s suppression of Hong Kong by changing its policy, and is prepared to damage the status of Hong Kong as an international financial hub.
US-China relations have long been deteriorating rapidly. During the global pandemic, anti-China sentiment in the US is soaring to an all-time high. China will be a key theme in the US presidential election this year, as candidates will attack each other for taking a soft line on China and will portray themselves as staunch fighters against China. In advance of the US State Department’s annual report on Hong Kong and China’s announcement of implementing national security law in Hong Kong, U.S. Secretary of State Mike Pompeo has made unprecedentedly clear that Beijing’s crackdown on Hong Kong is making it increasingly difficult for the U.S. to certify Hong Kong’s autonomy status, sending a strong signal that the U.S. may change its policy towards Hong Kong. Last week, the White House even released the “U.S. Strategic Approach to the People’s Republic of China” report, indicating an end to the friendly engagement with China in the last four decades and a shift to the all-out containment. Hong Kong makes a good focus for the United States.
Recently, the US Congress is considering new regulations against Chinese companies listing in the US. The Senate passed the bill as unanimous bipartisan consensus was reached. The bill is now moving to the House of Representatives. With the new regulations, many Chinese giants listed in the United States fear that they may be delisted very soon. Chinese companies that may be about to lose access to U.S. financial markets will rely more on Hong Kong as an offshore financial centre. The economy of China may not just suffer a small hit if the United States stops recognizing Hong Kong as an independent customs territory.
Of course, in response to Beijing’s preparations for direct rule in Hong Kong, the United States may not change its policy towards Hong Kong completely in one go. Instead, the US may warn Beijing by imposing partial sanctions on Hong Kong. For example, Washington could extend export controls that prohibit the export of sensitive high technology to mainland China to Hong Kong. This will have little impact on the living standard of Hong Kong people. High-tech companies which set up window companies and laboratories for importing or researching on restricted technologies, software and hardware may have to close if the backdoor of Hong Kong is closed. This approach is also very much in line with the current American policy of blocking Chinese high-tech enterprises, like Huawei, in full force.
Politically, Beijing’s crackdown on Hong Kong, with or without the national security law, has become increasingly stifling. The difference is whether the crackdown is carried out by the Hong Kong police, who are out of control in the eyes of many people, or by Putonghua-speaking national security officers, whom many people believe are already operating covertly in Hong Kong.
However, economically speaking, it is uncertain if it would be a disaster or blessing to the general public of Hong Kong if the United States were to cancel Hong Kong’s status as an independent customs territory one day and Hong Kong were to lose its status as China’s offshore financial centre. For a long time, one of the root causes of Hong Kong’s livelihood problems has been its over-reliance on the monopoly of financial and real estate sectors as a unitary economic structure. The rich and powerful from China used to come to Hong Kong for its identity and jump ship for the West via Hong Kong. Without the dirty money coming to Hong Kong for laundering and the hot money which speculates in real estates and stocks, the housing prices and rents in Hong Kong may fall. After some economic pains, Hong Kong’s economy may transform into one which focuses on autonomy, grassroots and local consumption similar to that in southern Taiwan which many in Hong Kong long for.
Beijing’s heavy-handed full governance over Hong Kong seems dark, but its attack on Hong Kong may also be a desperate act. If Hong Kong people are steel-willed and have optimistic collective awareness, Hong Kong will not sink into the chaos, but rise again.

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