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In the months after large-scale protests first broke out in Hong Kong last June, U.S. policy circles remained relatively quiet. Yet as demonstrations turned violent and rumors of a Beijing-directed crackdown spread, concern in Washington grew. Last week, President Donald Trump signed the Hong Kong Human Rights and Democracy Act, which arrived at his desk with veto-proof backing from both houses of Congress. The legislation gives the U.S. government a stronger mandate to adjust its legal stance toward Hong Kong, as well as offering renewed sanctions authorities and a clearer expression of where the United States stands on the city’s future.
Yet the biggest questions for U.S. policy still lie ahead. At issue today in Hong Kong is not simply when and how the protests end. More consequential is whether Hong Kong’s uniquely autonomous status within China, as defined by the “one country, two systems” paradigm, can survive the current crisis. The most important focus for U.S. policymakers should be to do what they can to reinforce that paradigm, while avoiding steps that would undermine it.
The status quo in Hong Kong, with its high degree of autonomy, extensive personal freedoms, and strong rule of law, generates enormous benefits not just for the people of Hong Kong but also for the United States and China. Above all else, Washington must remember what it can, and cannot, do to ensure that this status quo continues. Done right, U.S. policy can help keep the Hong Kong dream alive. But there is a real risk that the United States could inadvertently make matters worse.
Ever since its handover from the United Kingdom to China in 1997, Hong Kong has enjoyed special status within China. “One country, two systems” is the shorthand used to describe that status—Hong Kong’s mostly separate system of laws and governance and generally Westernized business practices, which persist (and thrive) despite overall Chinese sovereignty. This status, promised in a 1984 treaty between China and the United Kingdom and codified in the Basic Law approved by Beijing, has allowed Hong Kong to continue to enjoy freedom of expression and rule of law, despite flying the flag of the People’s Republic of China since the end of British colonial rule. It has also been the central factor in Hong Kong’s commercial and financial success.
Widespread protests started in June in response to the Hong Kong government’s politically tone-deaf proposal to allow for the extradition of fugitives to stand trial in China. The actual proposed change was relatively narrow: it would have applied only to certain serious cases in which individuals were suspected of breaking specific laws in mainland China before traveling to Hong Kong. That the Hong Kong business community and general public so strongly opposed the legislation was a testament to their increasing distrust of the Chinese government and long-held disdain for its unfair judicial system. When the Hong Kong government ignored this opposition, massive peaceful protests broke out. Further mistakes and vacillation by the government helped set off a cycle of increasingly violent demonstrations, heavy-handed police reaction, and deepening political polarization. Initial concerns about judicial independence have since expanded into renewed calls for democratic elections for the city’s chief executive.
That the extradition legislation could spark such a reaction indicates how fraught and complicated the situation in Hong Kong has become in recent years. In part, dissatisfaction stems from resentment over extreme economic disparity between rich and poor and also over mainland Chinese “intrusion” into Hong Kong’s culture and society. Real wages in Hong Kong for middle-class people have been flat for over a decade, while housing costs have soared. Most young adults live in tiny, unaffordable flats and often compete for advancement with highly qualified job seekers from the mainland. Hongkongers also chafe at mainlanders’ “overtourism” and increasing use of Mandarin rather than the traditional Cantonese.
It is important to remember how autonomous Hong Kong remains.
Yet such structural resentments have been inflamed by Beijing’s increased interference in Hong Kong politics and decision-making. As the U.S. State Department has documented in its annual report on Hong Kong, interference has taken the form of political screening of legislative candidates, prosecutorial overreach, and the politicization of education and academic research. Meanwhile, the official bodies in Beijing tasked with monitoring and influencing Hong Kong affairs have grown in size and ambition, and these Hong Kong watchers have created their own self-serving narratives for Beijing’s consumption, including exaggerating “separatist” sentiment in Hong Kong and spinning conspiratorial fairy tales about foreigners organizing the city’s democracy movement.
Still, despite these worrisome trends, it is important to remember how autonomous Hong Kong remains. The contrast between Hong Kong’s relative openness and the restrictiveness of mainland China continues to astound people who visit both. Hongkongers join public protests, surf the Internet, and travel to other nations without any impediments or restrictions—all unthinkable freedoms for mainland Chinese. Political discourse and the media in Hong Kong are wide open. Business decisions are made within a framework of laws and standards that parallels that of London, not Shanghai or Beijing.
Indeed, in the same week that international media focused on the dramatic standoff between protesters and police at Hong Kong Polytechnic University, other developments offered reminders of the city’s distinct status and persistent strengths. On November 18, Hong Kong’s High Court rejected the city government’s ban on wearing facemasks at protests (triggering ominous but vague threats of a rare judicial overrule by Beijing). And on November 24, the Hong Kong government held peaceful, orderly, and genuinely democratic district council elections; as expected, Hong Kong’s opposition parties scored a major victory amid record turnout, reflecting the antigovernment mood of the electorate.
The goal of U.S. policymakers and others in the international community should be not to instigate change in Hong Kong but to reinforce the status quo. That means avoiding steps that would erode international confidence in the “one country, two systems” construct or would “punish China” with the unintended effect of also undermining Hong Kong.
In recent months, U.S. officials have made a number of high-level declarative statements in support of Hong Kong’s autonomy and the “one country, two systems” paradigm. Secretary of State Mike Pompeo, for example, recently called for an end to violence and an independent review of Hong Kong police actions, while also reminding Beijing of its obligations under the Sino-British Joint Declaration. President Trump has sometimes confused matters by linking Hong Kong to the U.S.-China trade talks—mystifying China, which sees no such linkage. But the Human Rights and Democracy legislation passed and signed in late November makes clear that Washington stands in support of a continued high degree of autonomy for Hong Kong.
But the legislation also raises a new risk for U.S. policy. Most significant, it requires the secretary of state to “certify,” on an annual basis, that Hong Kong has sufficient autonomy to be treated as separate from the rest of China for the purposes of the application of U.S. law. This distinct treatment under U.S. law means that the United States can apply different regulations to Hong Kong than it does to China, which allows for separate bilateral agreements and a much closer economic and cultural relationship.
Until now, the State Department has merely had to prepare an annual report on autonomy. The most recent report, in March 2019, concluded that “Hong Kong maintains a sufficient—although diminished—degree of autonomy under the ‘one country, two systems’ framework to justify continued special treatment by the United States for bilateral agreements and programs.” Under the new law, should that judgment start to change for the worse, the U.S. government might be compelled to precipitously “decertify” Hong Kong—a step that would have a dramatic, and damaging, impact on its external relations, its economic standing, and, by extension, its prospects for sustained autonomy.
Even if other governments did not follow suit—and most would not—decertification would likely lead to higher bilateral tariffs (and thus the loss of what is now the United States’ largest bilateral trade surplus); tightened rules for investment and technology transactions; and a breakdown in valuable law enforcement cooperation, including joint work to fight money laundering and drug trafficking. There might be an even bigger impact outside government channels, because decertification would undermine the international business community’s confidence in the long-term sustainability of the Hong Kong business model. Some 1,400 U.S. companies are active in Hong Kong, and many of them—including all the major U.S. financial institutions—treat Hong Kong as their regional headquarters. Decertification would both harm U.S. economic interests in Asia and severely damage the livelihood of Hongkongers—the very people whose freedoms and way of life Washington means to protect. China, the actual target of U.S. condemnation, would be hurt as well, but much less severely. And the United States, meanwhile, would have relinquished once and for all its major source of influence over Hong Kong’s situation.
There are, fortunately, ways for the United States to have a constructive impact on the future of Hong Kong. By treating it as an independent actor, and the nexus for information and ideas in Asia that it still is, Washington can meaningfully reinforce Hong Kong’s autonomy within the “one country, two systems” framework. Focusing U.S. policy on supporting and strengthening Hong Kong will do far more good—and risk far less harm—than will attempts to compel changes in, or impose direct costs on, policy decisions originating in Beijing.
A proactive and forward-looking effort to support the city could include new government-to-government dialogues on investment rules, financial regulations, and Internet and data architecture. It could also include other initiatives that underscore the autonomy of Hong Kong, such as including it in the Visa Waiver or Preclearance travel programs. Last week, the Parliament of Australia approved a new free trade agreement with Hong Kong, as a way of locking in the benefits of Hong Kong’s autonomy. The United States should consider a similar approach.
For the United States, Hong Kong is a useful platform for the projection of open-society values.
The United States should also pick up the tempo of high-level official visits to Hong Kong, at least once the dust from the current instability has settled. Members of Congress have visited in recent years, but the last cabinet-level visits were in 2016 and 2017; the secretary of state has not visited since 2011. Perhaps the next time the vice president gives a speech on China, he should do it from Hong Kong.
In the end, Hong Kong’s future course hinges on a question of confidence. If people in Hong Kong, in China, and around the world have confidence in its autonomy and the “one country, two systems” framework, that confidence will be self-reinforcing. For the United States, Hong Kong is a useful platform for the projection of open-society values and U.S. economic power in the Indo-Pacific. Washington’s goal should be to keep the Hong Kong paradigm viable at least until 2047—the end date of China’s stated guarantee of “one country, two systems”—if not beyond.
It may be tempting for Washington to treat Hong Kong primarily as an opportunity to highlight the flaws of China’s approach to governance. But that will only heighten doubts about the future of Hong Kong—and thus hurt its prospects, despite a professed desire to save it. A better policy would emphasize the lasting value that the United States sees in the city’s unique system and do what it can to bolster international confidence in Hong Kong.