• + A New Security Law was passed by Xi and applied to the island; Hong Kongers were not part of the process. 
• + Crimes of subversion, succession, terrorism, and collusion are now punishable directly by the mainland, crushing the opposition in the Island. 
• + Chinese Secret Police Commission will now monitor Hong Kong, dismantling basic civil liberties and freedom of speech. 

Why is Xi´s heat level Blazing?

Answer: His new security law has changed the reality of Hong Kong´s rule of law, just as he wanted. 

On July 1st, 2020, Xi’s government introduced a new security law for Hong Kong that has effectively ended the territory’s autonomy from China. Initially announced in May, the new law, which was drafted in its entirety in Beijing without any referral to the legislative or administrative branches in Hong Kong, has been described as one of the biggest assaults on liberal society since the Second World War.

In 18 pages, which were darker than predicted, the Chinese law covers crimes of subversion, secession, terrorism, and collusion with foreign powers on the island. Blatant and ambiguous, the law shows Xi’s indiscriminate move against the opposition in Hong Kong. Unfortunately for the freedom of the island, he has the power to do so.

With the new law, the local police in Hong Kong will investigate the crimes of subversion, secession, terrorism, and collusion; however, the law goes a step further, setting up a  new Chinese National Security Commission (aka Chinese Secret Police station) in the island. This commission, directly governed by the central government in Beijing, now has the authority and mandate to “collect and analyze national-security intelligence”. 

Senior advisor to Hong Kong’s central government, Lau Siu-kai, stated that the law aims to “kill a few chickens to frighten the monkeys”; basically, to detain a few high-profile sentences instead of swooping massive arrests. Reality might be different. The first arrest, on July 1st, was a man merely carrying an “independent Hong Kong” banner. The same day, a crowd of protesters was arrested, many of them under the new law. It is as scary as it sounds. 

The law is said to comply with important principles of the rule of law and international human rights, however, this is unlikely. The law gives China immense new powers. It gives the legislative in Beijing the capacity to overrule any judgments of Hong Kong’s courts, thus drifting away from the rule of law. Judges will now be government-appointed, and they will be allowed to dispense juries and try cases in secret. Additionally, more “complex” and “serious” cases will be judged in the mainland. Executions are not out of the question. 

To add to the legal uncertainty, the definition of sedition, subversion, terrorism, and collusion with foreign powers is highly ambiguous, meaning it can be applied to basically anything. It all depends on what the regime takes as a “serious” threat to Chinese security. It could range from voicing independentists’ views or resisting authoritarianism. Lobbying foreign governments or publishing anti-Beijing viewpoints could now be punished by life imprisonment. Pro-democracy protesters have long feared extradition to China due to their political stance. Now, this is a reality. People are rightfully afraid. 

Who is changing Xi’s temperature?

What elements are changing Xi’s decision. 

Answer: No one, Xi is blazing and the law is unchallengeable. 

With Hong Kong’s authorities and civil society shielded from drafting and applying the law, which was unilaterally and unequivocally imposed by Xi, there is little to nothing in his way. The only path forwards is fear. Joshua Wong, a 23-year-old famous activist, announced his withdrawal from Demosisto, a small pro-democracy party, out of fear. Soon after, the remaining leaders of the organization also abandoned it, leading to its disappearance. Other small organizations have also taken this path to avoid the legal hell that would await. 

Booksellers, journalists, and press are deleting content, closing down, and shutting up. An expected result from the bill. Writers in many press outlets such as InMediaHK, a pro-democracy site, have taken down their articles in fear. Hong Kong’s freedom of speech, existent and well-nourished in comparison to the mainland, now seems to be heading into oblivion. 

External resistance to the law is not helping either. While most powers agree China is violating their promise to keep Hong Kong autonomous, not everyone coincides. The new law was widely condemned in the United Nations this week. However, a group of 50 nations, led by Cuba, actually supported Xi´s law and highlighted the non-interference principle in international relations. Still, the major powers are all critical of China’s action even though there is little they can do. 

The UK, the former colonial power in Hong Kong, believes China is breaching their word under the “one country, two systems” arrangement. As a response, Boris Johnson announced Hong Kongers could migrate to Britain through a visa regime, making it easier for around 3 million citizens to move to Britain. Australia is considering a similar migratory arrangement. 

The US has also condemned the adoption of the new law by removing Hong Kong’s special trading status, which halts exports and restricts the territory’s access to high-tech. Hong Kong would not be the economic powerhouse it once was without this access to technology. Like the UK, the US has decided to now treat Hong Kong as “one country, one system” or as one with China.

The autonomy of Hong Kong has now disappeared in the US eyes as Secretary Mike Pompeo declared that the “facts on the ground” prove Hong Kong is no longer autonomous. Additionally, on July 2nd the US House of Representatives passed the Hong Kong Autonomy Act to penalize banks that do business with Chinese officials. 

What is driving Xi? 

Answer: Protests were getting too loud. 

The imposition of the law comes just ahead of the anniversary of the handover of Hong Kong from British rule to China in 1997. During the handover, China promised a transitional 50 years period during which Hong Kong’s way of life and political freedoms would be conserved. China had agreed to give Hong Kong a “high degree of autonomy” which included impartial courts and freedom of speech and, more importantly, free internet. Hong Kong has since then become a hub for academics, journalists, and dissidents of the Communist Party. It was supposed to last until 2047. This is no longer true. However, why did Xi break his word?

The objective of this law was to stop the mass protests and civil unrest that has taken over the streets of the city since 2019. From an extradition bill to freedom of election of officials, the citizens in Hong Kong voiced strong anti-Beijing and pro-democratic stances in intense protests lasting for months.

Xi had enough of it and COVID 19 helped. As noted in a previous RAIA article, there were several arrests during the pandemic. Xi took COVID 19 as an opportunity to squash the protests given the need for social distancing. However, with this law, he is going a step further, ending any possibility for the opposition in a now highly monitored, silenced, and prosecuted Hong Kong.  

What does this mean for you? 

Answer: Fear is overarching and markets are within its reach. 

While every aspect of Hong Kong society is bound to change, the market is also reacting with fear to this blatant move by China. On May 22nd, right after the announcement of the new law, Hong Kong’s stock market fell by 5.6%, its biggest drop in 5 years. Unfortunately, the economic damage caused by a crackdown on Hong Kong’s freedom is a price the Peoples Party is willing to pay. While the Hong Kong market is very strategic for Beijing, it is not crucial.  Since 1997, the percentage of Chinese GDP coming from Hong Kong has diminished from 18% to only 3% in 2020, as Shanghai rises tremendously. 

 No rule of law is inevitably going to deter business from Hong Kong. Hong Kong has been a perfect conduit between global capital markets and China’s inward-looking financial system. However, it is no longer a legal safe harbor next to China; it’s China now. This is less attractive for business.  
Moreover, it’s not only markets that will suffer from this new law.

As Pompeo stated, Hong Kong’s autonomy is de facto gone. China’s breach of its promise to keep Hong Kong independent is both infuriating and sad. It marks the end of “one country, two systems”. The system aimed to demonstrate that Hong Kong could peacefully reincorporate into China without losing its characteristic and profitable liberty. This illusion of liberty has faded now, “one country, two systems” is downsizing to one, one.