
Hong Kong’s security law is going to devastate its economy - partingshots
https://asia.nikkei.com/Opinion/Hong-Kong-security-law-is-going-to-devastate-its-economy
======
kyrra
Related: [https://www.wsj.com/articles/u-s-officially-declares-that-
ho...](https://www.wsj.com/articles/u-s-officially-declares-that-hong-kong-is-
no-longer-autonomous-11590596133?mod=hp_lead_pos2)

"U.S. Officially Declares That Hong Kong Is No Longer Autonomous

WASHINGTON—The State Department has officially determined that Hong Kong is no
longer autonomous from China, Secretary of State Mike Pompeo said in a
statement Wednesday that holds implications for the future of economic ties
and could lead to sanctions against China.

The State Department is required by the Hong Kong Policy Act to assess the
autonomy of the territory from China. It certified to Congress on Thursday
that Hong Kong is no longer autonomous."

~~~
Aunche
Not that I disagree with the act, but I love how politicians are trying to
frame destroying Hong Kong's economy as supporting "Human Rights and
Democracy."

~~~
ng12
In the post-nuclear world economic pressure is the only tool we have to deal
with bad actors. It's why we sanction North Korea, Iran, and Russia.

~~~
Matticus_Rex
It's a very bad tool for that particular job, as we discovered in Iraq -- it
hurts the most vulnerable members of the society, and does very little to the
elites making the policies we don't like.

~~~
firecall
True.

But it's not the point; The intention is reduce the capabilities of the
country as a global influence and generate internal state turmoil.

~~~
dnautics
After decades of sanctioning Libya the united states finally got what it
wanted by decapitating the state with violence; one wonders (global political
dynamics aside) if for the unfortunate citizens of Libya, it would have just
have been better to have gotten it over with earlier.

------
ww520
This is better understood in the context of Hong Kong's trade relating to
China.

HK import volume 2018: USD $627 billion [1]

HK export volume 2018: USD $568 billion [2]

The top 2 imports are: (see [3])

1\. Electrical machinery, equipment: US$307.7 billion (53.2% of total imports)

2\. Machinery including computers: US$66.4 billion (11.5%)

HK has only 7 million people. There's no way it can consume that much import
nor produce that much export, especially not consuming $307 billion worth of
machine equipment. Hong Kong is China's 2nd top trading partner [4]; China is
basically using Hong Kong as a trading proxy to evade sanction. Most of the
imports are purchased by China because it cannot buy them legally and has to
use HK's "autonomous" status to import. Most of the exports are routed by
China to take advantage of its tax free zone status.

Not to mention 70% of the foreign money going into China every year is via
Hong Kong. Killing Hong Kong's "autonomous" status is the stupidest move done
by China in the recent years. It allows the outside world to plug the last
gateway into China.

[1]
[https://www.tid.gov.hk/english/aboutus/publications/tradesta...](https://www.tid.gov.hk/english/aboutus/publications/tradestat/wmtimp.html)

[2]
[https://www.tid.gov.hk/english/aboutus/publications/tradesta...](https://www.tid.gov.hk/english/aboutus/publications/tradestat/wmtexp.html)

[3] [http://www.worldstopexports.com/hong-kongs-
top-10-imports/](http://www.worldstopexports.com/hong-kongs-top-10-imports/)

[4] [http://www.worldstopexports.com/chinas-top-import-
partners/](http://www.worldstopexports.com/chinas-top-import-partners/)

~~~
sangnoir
I don't believe China is currently under any trading sanctions - did you mean
they are evading _tariffs?_

~~~
ww520
Not sure it's sanctions or tariffs, just there're $307 billion worth of
machine equipment per year they cannot buy directly.

~~~
sangnoir
Did you account for value addition? It may be HK is in the middle of
electronics value chains that start and end outside of its borders - I imagine
Singapore has a similar import/export numbers it makes a lot of hard disks
(export) but doesn't make a lot of chips (import). This doesn't imply
Singapore is a front for another country

~~~
ww520
There isn't much of electronic industry in Hong Kong since the 80's.
[https://en.wikipedia.org/wiki/Manufacturing_in_Hong_Kong](https://en.wikipedia.org/wiki/Manufacturing_in_Hong_Kong)

------
m-p-3
And the real losers in this fight here are Hongkongese citizens, who fought
for their freedom and ultimately are losing it, on top of facing an economic
crisis.

~~~
supernova87a
As I genuinely asked in my comment separately in the thread, what practical
freedoms are being lost by the everyday person in Hong Kong that would not be
considered crimes in the US (or Hong Kong prior to this), for example?

~~~
jcranmer
The obvious answer is criticism of the Chinese government, which is I believe
a Chinese constitutional right that is ignored in practice. Although,
practically speaking, this has already been lost in Hong Kong ever since the
abduction of the bookseller.

~~~
ipiz0618
Also with government officials starting to describe every protest as "riots"
and "terrorism", it's feared that they are paving the way to grant Chinese
authorities power to legally "arrest" anyone anywhere. It's not yet confirmed
that the execution will be carried out by Chinese officials, but the law
grants them power to do so.

Also search warrants were originally needed for the police force to break into
private properties (not that the Hong Kong police respect any of the current
laws now though), after passing the law, they are no longer need.

The scariest part, however, is how vague the law is. One can never truly
define what is criminalized. For example, what is "foreign interference"? The
HK government has been criticizing the protests as being "influenced" by the
US. It's their say to impose a crime upon you. Most "criteria" for acting
against the "law" are speculations.

------
bitxbitxbitcoin
The sad fact of the matter is that Xi has already calculated that and deemed
it an acceptable loss in the name of "national security."

~~~
rwmj
I'm kind of wondering if he will step down next year, or find a reason to keep
going. (I don't know what the constitutional arrangements are, but assume that
he can only have a single 10 year term)

~~~
green-bottle
I doubt Xi's going away anytime soon. He got constitutional term limits on
Presidency removed.

[https://www.bbc.com/news/world-asia-
china-43361276](https://www.bbc.com/news/world-asia-china-43361276)

------
supernova87a
I read all these headlines, but when I then followup to read more about the
text of the proposed laws [1], I have a hard time seeing that aside from
freedom of speech infringements (and ability to imprison, fine based on those
-- which are clearly a bit vague in terms of enforcement, but otherwise as
bland as a lot of US legislation), these laws are not egregiously different
from what exist in some other countries.

Aside from the symbolism, can someone enlighten me why they have practical,
real worries that this is going to cause some massive political or social
change over there? Or whether companies will really shy away from doing
business when they already face laws like this elsewhere? Or that the economy
there is going to dry up because of this?

[1]
[https://en.wikipedia.org/wiki/National_People%27s_Congress_D...](https://en.wikipedia.org/wiki/National_People%27s_Congress_Decision_on_Hong_Kong_national_security_legislation)

~~~
alisonatwork
I don't think the main problem Hongkongers have with this law is necessarily
the content, but the fact it has been pushed on them by an external government
which many Hongkongers expected to remain independent from for the next 27
years. From their perspective, having their own government taking marching
orders from Beijing undermines the principle of "one country two systems".

Aside from the principle of it, there are also several aspects of the proposed
law that go beyond what many people consider to be reasonable. Most notable
for migrants and tourists is the emphasis on preventing and penalizing
"foreign interference", which doesn't sit well in a city that is still the
most multicultural in East Asia. Allowing the mainland security apparatus to
set up offices in the city is also concerning, given mainland law enforcement
is famous for disappearing and torturing people who do not support the single
party dictatorship.

I think it's fairly clear that this is an opportunistic power-grab by the
central government. The coronavirus has allowed them to dramatically increase
the intensity of their security measures in the mainland, instituting
Xinjiang-style movement tracking apps, "temporary" barricades and checkpoints
all over the country. The state media has whipped up intense anti-American
hatred, and the government is emboldened by the fact that America is dealing
with the virus comparatively poorly. There is a widespread public support for
cracking down on Hong Kong, which has been presented here in mainland as a
city besieged by terrorists and American agents of chaos, all out to destroy
China. I suspect from the point of view of the central government, being able
to advance their timetable on the takeover of Hong Kong is the silver lining
of this pandemic.

~~~
chrischen
Was Hong Kong ever really independent though?

~~~
av_engr
Essentially, yes. Besides China having sovereignty over the city, it has its
own currency, government, different law system than China, a border with
China, and different passport. In recent years on the rise of Chinese
Nationalism, the Chinese government seems to downplay this a lot to eliminate
the HKer's local identity and creates an image of HK = China. Culturally, it
is also vastly different than China.

~~~
chrischen
What i meant was it was under British rule prior to China. The British ruler
was literally appointed by outsiders.

From an American perspective it’s more about losing a territory under Allied
jurisdiction. From the local perspective it’s about losing independence
rights—though they didn’t really have that right under British rule either.

~~~
aianus
Towards the end, it was only under direct British rule because China
threatened to invade if the British gave them self-governance.

[https://www.nytimes.com/2014/10/28/world/asia/china-began-
pu...](https://www.nytimes.com/2014/10/28/world/asia/china-began-push-against-
hong-kong-elections-in-50s.html)

~~~
chrischen
Towards the end the British tried to increase Democracy as a an anti-PRC
political move but efforts were stalled by HK people themselves.

This is a reminder that it’s important to fight for rights everywhere, not
just when it suits your interests.

[https://en.m.wikipedia.org/wiki/Democratic_development_in_Ho...](https://en.m.wikipedia.org/wiki/Democratic_development_in_Hong_Kong)

~~~
spacehunt
> stalled by HK people themselves

From the article you linked, it says it was stalled by vested interests and
the CCP. Where does it say it was stalled by HK people?

~~~
chrischen
> Although full universal suffrage was never granted by the British to its
> colony before the handover in 1997, some democratic reform began in 1984.

> ... but they stalled due to opposition from Beijing, local business
> interests as represented by Executive Council, and the British Foreign
> Office under the pretext that it would bring chaos to Hong Kong.

> In 1987, many surveys indicated that there was more than 60% popular support
> for direct elections. The government, under governor David Wilson, issued
> another green paper in 1987 proposing direct LegCo elections for 1988.

> However, the proposal was ruled out after a government consultation
> concluded that people were 'sharply divided' over its introduction that
> year.

It links to an article here: [https://www.scmp.com/comment/insight-
opinion/article/1618427...](https://www.scmp.com/comment/insight-
opinion/article/1618427/how-hong-kongs-business-elite-have-thwarted-
democracy-150)

The "vested interests" you refer to is "Patten's push for reform was strongly
opposed at the time by vested interests within LegCo and by former ambassador
to China Percy Cradock." However that was in response to "labour rights and
collective bargaining" and not strictly democratic elections.

Local business interests, and a "sharply divided" public were the reasons
democracy never came sooner. Of course I'm not sure how reliable those
government consultations were. I do want to point out I fully support
Democracy in Hong Kong. I'd just rather not be a pawn in an opportunistic
power grab by business elites who decided Chinese rulers don't work out as
well for them as their former British ones. Freedom of information and thought
aside, the elites have more to lose from Chinese rule than the working class.

~~~
spacehunt
No, by "vested interests" I mean whoever had power at the time. In the 70s-80s
it was the ExCo, which had on it a few business elites hand-picked by the
British.

In the 80s-90s, as China opened up its markets and needed HK investment, many
business elites cozied up with Beijing, gaining political power in the
process; they became the vested interests today. But they are not exactly the
same group as the vested interests in the 80s.

> > However, the proposal was ruled out after a government consultation
> concluded that people were 'sharply divided' over its introduction that
> year.

By that time the CCP was heavily involved. People feared that introducing
direct elections would (and eventually did) antagonise Beijing.

> rather not be a pawn in an opportunistic power grab by business elites

This is an interesting take. Do you have anything to support this claim?

------
jorblumesea
If anything, doesn't that strengthen China's hand?

More reliance on the mainland for jobs and handouts, more protests and counter
protests so they can justify additional crackdowns. Less westerners and less
international firms, less exposure to the West.

Feels like a calculated move.

~~~
dade_
The CCP can now afford to sacrifice HK, their economy is now much larger than
it was in 97.

~~~
adventured
They can't. For one thing they desperately need the dollars that flow through
Hong Kong.

The GDP size is now among the least valuable aspects of Hong Kong as it
pertains to China. That has never been primary.

Hong Kong is the economic staging point that much of the world uses to enter
China's economy. Think of it as a translating middleman, that the world uses
to convert from foreign market-based economics to China's domestic way of
running things as a rigid command economy that is operated by fiat and is
often hostile to foreign operators/owners/investors. Hong Kong's role in that
respect has been critical to China's economic rise.

~~~
wahern
They're positioning Shanghai for that. Shanghai was something like a free city
until WWII.

I think things escalated in Hong Kong much quicker than the CCP wanted--
Shanghai isn't ready to take its place. But Shanghai is the long game, and
business leaders in HK know that.

~~~
khuey
Shanghai doesn't (and never will, at the rate things are going) have things
that international companies care about like the rule of law.

~~~
wahern
I don't disagree, but what matters for HK's fate is what the CCP believes is
possible and, presently, particularly what Xi Jinping believes.

------
ab_testing
I don't understand why the world in general is worried about Hong Kong being
taken over by the Chinese. In 1842, Hong Kong was a chinese territory. It was
taken over by the British during the first and second opium wars and then
leased out to the British for 99 years. The keyword here being leased out. If
now China is wresting back control of its territory, how is that disputed. The
people of Hong Kong always knew that their autonomy was only till the time
when the lease ends.

Interestingly, When the union flag was raised over Possession Point on 26
January 1841, the population of Hong Kong island was about 7,450, mostly Tanka
fishermen and Hakka charcoal burners living in a number of coastal villages.
Today Hong Kong's population is 7.5 Million so 1000 times its original
population. So every body who came later knew about the lease and the length
of the autonomy.

~~~
spacehunt
The key detail you missed is One Country Two Systems, which is what allowed
Hong Kong to have a financial system integrated with the Western world's, and
a legal system that works more or less the same as in London and New York.

------
supernova87a
So in terms of after-effects and alternatives, should we all start investing
in... Singapore real estate?

------
sunstone
Xi is following the game plan laid out by Putin but at a faster pace. It's not
clear to me that Xi is personally as corrupt as Putin but he's definitely as
destructive.

------
voisin
Anyone else wonder why legitimate, thoughtful responses are being downvoted?

~~~
ganzuul
I regularly upvote downvoted comments if it looks like someone used a downvote
as an "I disagree"-button.

Just undo that nonsense.

------
blackrock
You have to wonder about the hypocrisy about all this. Every country, every
territory, all over the world, has anti-sedition laws.

Hong Kong, as part of the agreement between China and Britain, must enact
their own security and anti-sedition laws. They had 23 years to do it!

Hong Kong failed to do so.

Now, a security law, is going to be shoved down their throats, whether they
like it or not.

Foreign forces have successfully infiltrated Hong Kong, and brainwashed the
young, into believing what the western world wanted them to believe.

The white western nations love Hong Kong for what it is, because the place is
lawless. Capitalism is unbridled over there. It’s predatory, and it eats the
young, and the poor. The rich take all the spoils. It’s about laws that favors
the rich.

But really, Britain should step up, and give these Hong Kong residents, the
right to British citizenship. They extracted trillions of dollars from China,
from their plunders during their opium terrorism reign. It’s time to give back
what they owe. But I doubt it. The British don’t have any morals or balls to
do anything. They’re all talk.

~~~
throwaway1997
What are you even talking about. Hong Kong has one of the strongest legal
systems in Asia, although it's being slowly eroded by the government. Have you
even visited or do you just watch shitty Kung Fu movies and assume the whole
place is Kowloon Walled City or Chungking Mansion?

