The Slow Death of Hong Kong

Hong Kong has long been Asia’s great entrepot, home to hundreds of thousands of foreigners, including more than 100,000 Australians. But veteran correspondent Keith B. Richburg describes a city in terminal decline, as China moves to crack down on democratic dissidents and tramples on the ‘one country, two systems’ formula that has underpinned the success of the former colony in the years since Britain departed in 1997.

As China’s Communist leaders prepare to impose a draconian new national security law on supposedly autonomous Hong Kong, officials in Beijing and locally have been trying to assuage the city’s anxious and angry residents that nothing much will change.

The law, approved by the National People’s Congress (NPC) on Thursday, will only apply to a tiny number of “terrorists” and their foreign backers, they say. Local police and courts will still be in charge. The new restrictions will actually make Hong Kong safer and more stable for overseas investors. And besides, every Western country has its own version of a national security law, so criticism from foreign capitals amounts to hypocrisy and fear-mongering.

But the view voiced by Hong Kong’s elected pro-democracy politicians, academics, lawyers, journalists and overseas business groups is precisely the opposite; everything will change.

After a steady series of erosions, they say—the kidnapping of five Hong Kong booksellers, the expulsion of a Financial Times journalist, China weighing into local court decisions—the national security law will mark the final death blow to Hong Kong’s autonomy, and to the unlikely dream of “one country, two systems.”

The only remaining question for many now is how long this freewheeling, capitalist enclave can continue to thrive as a global financial centre and multinational business hub once Hong Kong becomes just another Chinese city, subject to the same kind of repressive controls used to stifle dissent on the mainland.

While Hong Kong’s political future is now being dictated from Beijing, the city’s economic future might be decided by actions taken in Washington.

Hong Kong’s international standing could be further eroded now that the United States seems poised to implement new sanctions in reaction to the anti-subversion law. Following Secretary of State Mike Pompeo’s move to de-certify Hong Kong as enjoying its promised freedoms, the Trump administration could revoke Hong Kong’s special trade status. Trump could then impose on Hong Kong the same kind of punitive tariffs on exports and controls on sensitive technology as he has on China.

Sunrise over Victoria Harbour. Image credit: coloursinmylife, Shutterstock.

One prominent American businessman here predicted trade, technology and the overall business climate in Hong Kong could begin to diminish rapidly. He said the financial sector could be less immediately affected given the strength of the Hong Kong stock exchange, the world’s third largest behind New York and London, with over 2,000 listed companies. But that could change, too, if overseas talent becomes harder to attract, if faith in the legal system wanes and if the market manipulation common on the mainland takes hold here.

Hong Kong is already less vital to China than it was 23 years ago at the time of the handover, when the city’s economy accounted for nearly 16 percent of mainland China’s gross domestic product; now that figure is barely three percent. Ships now bypass Hong Kong for mainland ports in Shenzhen and Shanghai.

But Hong Kong remains important. Most of China’s foreign direct investment comes through Hong Kong, contracts are signed in Hong Kong because of its reliable legal system, information—vital to capital movements—still flows freely, and Hong Kong’s dollar is a convertible currency pegged to the U.S. dollar. All of that could now be in danger. An immediate rush to the exits is unlikely, but one future beneficiary is likely to be Singapore, which is perceived as a safer and more stable long-term bet.

There are still too many unknowns to be certain of any outcome. The national security law is still being written in Beijing, and will not likely be implemented here for several more months.  And in Washington, Pompeo’s statement decertifying Hong Kong only begins a process, leaving Trump with many options, with much depending on how hard he wants to try to punish Beijing.

Will people arrested in Hong Kong for violating the new anti-subversion law be tried in Hong Kong courts, where defendants enjoy more rights, including under international human rights covenants? Or could they be shipped over the border to mainland courts where prosecutors have a 99 percent conviction rate?  Will enforcing the new law be primarily the job of the local police, or will agents of China’s feared Public Security Bureau take charge?

And will the law be retroactive, meaning someone can be arrested and prosecuted for a statement or a tweet made last year before the law was in force? That prospect has many Hongkongers now trying to scrub their social media accounts, as well as downloading virtual private networks (VPSs) which are illegal in China, though commonly used to bypass censors.

The only template to suggest how the new national security law might be implemented in Hong Kong is to look at how it is used in mainland China. That view paints a terrifying picture.

In China, journalists, scholars, lawyers, human rights activists and workers with non-government organisations (NGOs) have all been detained under the mainland’s draconian national security law, usually charged with the catch-all crime of “subverting state power” or “inciting to subvert the state”.  Trials are typically closed if they involve “national security”. Many documents, from mundane economic statistics to the number of people executed for capital crimes, are classified as “state secrets” and reporting them, or possessing them, can lead to prison. Criticism of the one-party state or calls for multiparty democracy amount to crimes of incitement.

Chinese officials and backers of the new law for Hong Kong say it will only be applied to crimes like treason, subversion, foreign interference and secession, but with no clear legal guideposts on what those vague terms mean.

Can Hong Kong academics currently researching mainland trends run afoul of the new law? Can a university hold a symposium on Tibet or Taiwan and invite all sides to participate? If a journalist published an interview with Tibet’s spiritual leader, the Dalai Lama, or Taiwanese President Tsai Ing-wen, could that be deemed a crime? And how broadly will the new law define “foreign interference”, which could mean the normal activities of American or Australian NGOs, like human rights or labor groups, providing funding or training for local partners?

In China, attacks on the Communist Party and its symbols are not tolerated.  But in Hong Kong, slogans and banners mocking the Party, the Chinese flag and Xi Jinping are common features – would those be outlawed in the future? Already, the local legislature, controlled by pro-Beijing forces, are trying to ram through an unpopular bill to make it a crime to disrespect the Chinese national anthem, “March of the Volunteers”.

Local pro-China figures have already hinted that under the new law, the annual 4 June vigil commemorating the hundreds of pro-democracy students massacred in 1989 at Beijing’s Tiananmen Square could be outlawed.

Just as with Beijing, much is unknown about the next steps coming from Washington.

The US is looking to hold China to account for rolling back Hong Kong's freedoms. Image credit: Alexandros Michailidis, Shutterstock.

Unusually in the US, with its divided and divisive politics, there is a strong and unusually bipartisan consensus to hold China to account for its internal human rights abuses and for rolling back Hong Kong’s freedoms. On the same day Pompeo issued his statement decertifying Hong Kong as still autonomous, the US Congress sent to the White House a bill to sanction Chinese officials for their brutal suppression in Xinjiang, where more than a million ethnic Muslim Uighers have been sent to concentration camps for “re-education”.

Trump lately has been agitating to punish China for its early lack of transparency over the initial outbreak of the deadly coronavirus pandemic which started in Wuhan, most likely at a wildlife and seafood market not far from a secretive virology laboratory. But Hong Kong’s economic fate could also be tied in with the broader US-China trade war. If Hong Kong loses its special trading status and becomes subject to the same punitive tariffs, the economic blow—coming as the city is already reeling from months of protests and the COVD-19 pandemic—could be devastating.

The new anti-subversion law, and the coming crackdown it presages, is the dramatic result of a collision between Hongkongers’ aspirations for genuine autonomy and the Chinese Communist Party’s imperative to impose its control over a restive former British colony that never fully accepted being incorporated into the mainland.

After months of protests, many Hong Kong activists and outside observers were hoping, optimistically, that China’s rulers would not risk tarnishing this city’s global brand as a financial centre, or the approbation from the wider world, with a complete crackdown, and that some compromise might be reached. But it now appears that for China’s leadership, most important was controlling Hong Kong through force and crushing it as a source of dissent that might spill over the border.

Before 1997, when Britain handed over sovereignty of their longtime colony, Hong Kong’s fate was debated and decided in two distant capitals, London and Beijing, with its people left on the outside with no say.

History appears to be repeating itself. Hong Kong’s future is now being shaped by decisions made in Beijing and Washington. And once again, Hongkongers are on the outside looking in.