Hong Kong is the battleground in a US-China cold war

By imposing a draconian national security law on Hong Kong, China’s leaders have clearly decided that stamping out dissent in the territory is more important than preserving its status as Asia’s premier financial centre.

That title is now under direct threat after the Trump administration said on Wednesday that it no longer considered the former British colony to be autonomous from mainland China.

This ruling opens the door for more sanctions that could punish individuals and companies and remove a range of special trade and investment privileges. Hong Kong could be left with very little to differentiate it from any other big Chinese city.

Many in the western business community are still hoping they can keep their heads down and continue to benefit from Hong Kong’s unique position in the world.

They are wrong — from a moral as well as a practical perspective.

Hong Kong is now the main battleground in an escalating cold war between China and what is left of the US-led liberal world order. Beijing’s decision to ignore the damage to its global reputation and defy its international treaty obligations under the Sino-British Joint Declaration on Hong Kong shows the Chinese Communist party already believes this.

The new law, which could be in force in just a few months, aims to “prevent, stop and punish any behaviour” that constitutes “splittism, subversion of state power, terrorism or interference by foreign countries or outside influences”.

In the rest of China, these vaguely defined crimes are interpreted broadly and are regularly used to criminalise the mildest forms of peaceful dissent.

The fact that Hong Kong will pass a law next week — on the 31st anniversary of the Tiananmen Massacre — to hand down prison sentences of up to three years for “mockery” or “disrespect” of China’s national anthem gives a small taste of what is to come.

Hong Kong officials and many in the business community have claimed for years that the city’s unique advantage lies in its rule of law and independent judiciary, which contrast starkly with the Communist party-controlled courts in the rest of China.

But the new security law appears aimed at destroying those very advantages.

Anyone who has paid attention to the rhetoric emanating from the Communist party will understand that the common law system and the separation of powers that exist in Hong Kong are precisely the problem in the eyes of Beijing. President Xi Jinping has said so himself.

“Allowing the common law system to continue in Hong Kong is akin to asking foreign monks to recite local scripture,” as one party official puts it.

The fact that only about 1,400 of the 8,500 people arrested for protest-related offences over the past year have been charged and just 60 have been convicted by Hong Kong’s courts simply hardens this view.

Anywhere else in China, close to 100 per cent of these people would already have been found guilty and punished with heavy prison sentences.

As Beijing’s definition of “rule by law” is inserted into Hong Kong’s common law system by force, international business cannot assume it will be immune from the fallout.

What happens if an analyst from a US bank writes a critical report on a state-owned Chinese company? How far will the “Great Firewall”, China’s censorship apparatus to control access to the internet, be extended to cover Hong Kong? How can anyone be sure they will not fall foul of China’s fearsome state security agents, who will now be permitted to operate openly in the city?

On an even more prosaic level, the comfortable lives of expatriate executives will probably become untenable as a result of rising resistance from ordinary Hong Kongers.

By shutting off all avenues for peaceful displays of dissent, Beijing is radicalising the Hong Kong protest movement further. Acts of violence and attacks on the authorities are on the increase. Beijing and the Hong Kong police claim the protests have already morphed into a dangerous terrorist movement.

Even those who think they can ignore the political and legal implications of all this will be unable to ignore the threat to their personal safety if those claims eventually turn out to be true.

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