Hong Kong’s Place at the Center of US-China Relations

The Chinese Communist Party (CCP) is taking no chances with Hong Kong. Days before the city’s unprecedented protests approached their one-year anniversary in early June, the Chinese National People’s Congress (NPC) moved toward drafting a new national security law. For Hong Kongers seeking to preserve the integrity of the “one country, two systems” arrangement they’d been promised as part of the 1997 handover of the city from the United Kingdom to China, the moment was one of despair – but hardly unsurprising. Beijing’s iron fist had been squeezing Hong Kong slowly, but surely; the NPC’s power move was another symptom of the premature demise of “one country, two systems.”

For more than a year now, Hong Kong has been high on the U.S.-China agenda, but the NPC’s decision has thrust the city’s fate to the top. On May 27, for the first time, U.S. Secretary of State Mike Pompeo notified U.S. lawmakers that Hong Kong could no longer be considered sufficiently autonomous from China for the purposes of its special treatment under U.S. law. Pompeo’s statement was an acknowledgement of reality.

Days later, Trump said his administration would “revoke Hong Kong’s preferential treatment as a separate customs and travel territory from the rest of China.” This would expose Hong Kong exports to the United States to tariffs, affect the free dollar exchange ability of the Hong Kong dollar, restrict sensitive technology trade between the two sides, and even result in what Trump said would be sanctions on “PRC and Hong Kong officials directly or indirectly involved in eroding Hong Kong’s autonomy.”

If there is a new U.S.-China Cold War as so many commentators are happy to assert, then it’s looking increasingly as if Hong Kong will play the role of an undivided Berlin of sorts: A city whose very identity is being transformed in the course of geopolitical competition.

China’s reaction to Trump’s announcements was predictable, with all the usual emphasis on Hong Kong affairs being an internal matter. Zhao Lijian, the well-known, sharp-tongued spokesperson for the Chinese Ministry of Foreign Affairs, said that any “words and deeds from the United States that harm the interests of China will be resolutely counterattacked by the Chinese side.” At the same time, the two countries appeared to make an effort to resume diplomatic engagement – to address their divergence over Hong Kong and other matters.

A quietly convened June meeting between Pompeo and Yang Jiechi, the most senior CCP official focusing on foreign affairs, in Hawaii was deemed “constructive” by Beijing, but there’s little clarity on what exactly was achieved. It was notable that the Chinese side openly conceded in its statement that Yang’s main purpose in Hawaii was discussing highly sensitive matters that China describes as non-negotiable “core interests,” including the status of Hong Kong, Xinjiang, and Taiwan.

It’s not surprising that these matters would come up in a high-level bilateral setting, but the optics of a senior Chinese official flying to Hawaii to meet the U.S. secretary of state to discuss issues that China regularly describes as strictly internal matters – where the United States has no locus standi to complain – suggests a certain level of insecurity and vexation in Beijing. Curiously enough, the U.S. Department of State’s readout on this same meeting glossed over these specifics, offering a more general reflection on the importance of “fully reciprocal dealings.”

In the bigger picture, the Pompeo-Yang meeting marked the highest-level face-to-face U.S.-China diplomatic encounter since January and certainly since the two sides started very publicly trading barbs over the origins of the pandemic and China’s direct culpability. Pompeo, in particular, had made public allegations – unsupported by the U.S. intelligence community – that the novel coronavirus had its origins at a Wuhan-based laboratory involved in the study of deadly pathogens.

As of this writing, the 13th NPC Standing Committee had met for a 19th session and set up discussion of the Hong Kong national security law – formally known as the draft Law on Safeguarding National Security in the Hong Kong Special Administrative Region – for a 20th session at the end of June. The U.S. policy response to China, including Trump and Pompeo’s statements, has been designed to deter Beijing from heading down this path, but it’s clear that China will be unswerving. This may have been one of the messages that Yang had to deliver in Hawaii.

When the NPCSC completes the drafting and passage of the national security law, Hong Kong will have meaningfully changed. Mainland authorities would have unprecedented authority to enforce the law against any “separatist, subversive, infiltrative, or destructive activities” – all broadly defined. This step, when it does come, will likely trigger another set of actions by the United States, drawing a counterreaction from China, and so on. The Hong Kong issue will remain at the center of the U.S.-China agenda for the second half of this year.

The larger geopolitical context in which recent events, including the Pompeo-Yang meeting, took place is also worth emphasizing, however. The two men met in Hawaii amid the worst bout of violence along the China-India border in some 53 years. In the meantime, the China Coast Guard continued to perturb Japan in the waters off the Senkaku Islands and the Taiwanese Ministry of Defense scrambled fighters to warn off People’s Liberation Army Air Force jets in the Taiwan Strait across multiple days in June. In the South China Sea, another Chinese survey vessel entered Vietnam’s exclusive economic zone to conduct activities. All along China’s periphery, matters remain tense – all in the middle of a global pandemic.

By late summer, the United States should be expected to have a series of steps prepared to react to what appears to be a near-inexorable and total erosion of Hong Kong’s autonomy. The good news – if it can be called that – is that the options available to the Trump administration can be graduated and designed in a way to offer off-ramps that can limit self-defeating outcomes, like an acceleration in the mainland’s control and influence over Hong Kong affairs.

The early response from the Trump administration suggests a certain recognition of the leverage that the United States can still exercise. With bipartisan support strong in the U.S. Congress for the enforcement of legislation like the Hong Kong Human Rights and Democracy Act, the U.S. response can be unified. Beijing should have little reason, above all, to expect to ride out the tensions over Hong Kong should Trump lose November’s presidential election to Democratic nominee Joe Biden.