China Approves Controversial Security Law For Hong Kong, Triggering Fears Of More Unrest

China’s parliament, the National People’s Congress, approved on Thursday a national security law for Hong Kong that critics claim will destroy the island’s autonomy and freedoms.

The law, which features comprehensive anti-sedition statutes, was largely designed to crack down on the kinds of protests that swept across Hong Kong last year. The bill will prohibit “any acts or activities” that threaten China’s national security, including separatism, subversion and terrorism.

The law – which bypasses Hong Kong’s own legislature -- would also permit “national security agencies” -- presumably Chinese security and intelligence forces -- to freely operate in Hong Kong. The legislation also bans all “activities of foreign forces” allegedly interfering in Hong Kong affairs.

Premier Li Keqiang, the second most powerful man in China, said the law was “designed for steady implementation of ‘one country, two systems’ and Hong Kong’s long-term prosperity and stability.”

Hong Kong’s Beijing-backed government reiterated its support for the law.

“It also shows the care of the country [China] toward Hong Kong,” Hong Kong’s Chief Executive Carrie Lam said.

Lam also said the law “aims to prevent, curb and sanction an extremely small minority of criminals who threaten national security, safeguarding the prosperity and stability of Hong Kong and maintaining ‘one country, two systems.’”

She added: “It will not affect the legitimate rights and freedoms enjoyed by Hong Kong residents. ‘One country, two systems’ has been Hong Kong’s top advantage, and a stable and safe society will provide a favorable business and investment environment.”

Chinese authorities will draft a more detailed legislation and likely pass it in the next few months.

The move has been widely condemned and is likely to cause even more unrest on the island.

Already at least 360 protesters were arrested by riot police who were demonstrating prior to Beijing’s approval of the new law.

“It is definitely the start of a new but sad chapter for Hong Kong,” said opposition lawmaker Claudia Mo. “Hong Kong as we knew it is finally dead.”

Willy Lam, an adjunct professor at Chinese University of Hong Kong, warned: “It confirms the worst. [Chinese President] Xi Jinping is determined to push through mechanisms for total control of Hong Kong. There will be ferocious demonstrations in the weeks and months ahead, but it won’t change Beijing’s mind.”

Activists have called for more protests against China.

“As a Hong Konger there is not much we can do except to show the world we are still fighting for our rights and freedom,” said activist Serene Chow.

The Hong Kong Bar Association also questioned the legality of the law, citing “a number of worrying and problematic features.” The association asserted Beijing has no legal authority to enact the law.

Critics also contend the law will undermine Hong Kong’s autonomy and its unique status under the auspices of the aforementioned “one country two systems” arrangement, also known as the “basic law.”

Under the “one country, two systems” principle, Hong Kong has enjoyed some privileges that mainlanders do not have, including the power to self-govern, limited election rights, and essentially a separate legal and economic system from mainland China.

“The Chinese Communist Party is painting a picture to make it seem like it is abiding by the basic law, but it is not. They’re imposing a draconian law which can be used to silence dissent in Hong Kong and infringe on freedoms guaranteed to Hong Kongers,” said Frances Eve, deputy director of research at Chinese Human Rights Defenders, a human rights organization.

Reportedly, some Hong Kong residents are seeking to depart the island while some wealthy citizens have already shifted their cash elsewhere, fearful that Chinese authorities may seize their assets.

“Beijing has been eroding [our freedoms] in recent years,” said Wilson Leung, a Hong Kong barrister. “But now this appears to be the killer blow. It is going to be very dark days ahead for the citizens of this once-great city.”

On Wednesday, U.S. Secretary of State, Mike Pompeo, said Washington will no longer consider Hong Kong autonomous from mainland China and would likely revoke the island’s special trade status.

“While the United States once hoped that free and prosperous Hong Kong would provide a model for authoritarian China, it is now clear that China is modelling Hong Kong after itself,” Pompeo said. “No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground.”

In response, China’s foreign ministry office in Hong Kong condemned Pompeo’s comments as “smears and distortion” that “prove the great urgency for the National People’s Congress to decide on enacting national security legislation for Hong Kong.”

On Thursday Hu Xijin, the editor of state-run Global Times, also condemned Pompeo’s remarks.

“If Washington wants to play this card, let them play it… Hong Kong is a major international finance hub because of its special relationship to the mainland’s massive economy,” he said. “This is more important than the attitude of the U.S.”

In the event Hong Kong loses its special trade status with the U.S., the island’s economy may suffer, particularly if tariffs were to be imposed (as they are on mainland China).

Rodrigo Catril, currency strategist at National Australia Bank, said Pompeo’s remarks “open the door for possible tariffs on imports from Hong Kong, visa restrictions or asset freezes for top officials. China has previously warned it would retaliate if the U.S. interfered in its affairs.”

U.S. trade with Hong Kong amounted to more than $66 billion in 2018.

“A greater risk is that loss of special status leads the U.S. to restrict sales of sensitive technologies to Hong Kong firms,” wrote Mark Williams, chief Asia economist at Capital Economics. “Knowledge-intensive products from the U.S. only make up around 5% of Hong Kong’s total imports. But restricting the ability of Hong Kong-based firms to source sensitive products would remove one of Hong Kong’s distinct advantages as a business location relative to mainland China.”

More than 1,300 U.S. companies operate in Hong Kong, and some 85,000 Americans live in the city.

The American Chamber of Commerce said its surveys suggest some U.S. firms plan to scale back their investments in Hong Kong.

“Much of Hong Kong’s success is based on its ability to attract [foreign direct investment] and enjoy the productivity dividends that come from hosting internationally-competitive firms,” wrote Capital Economics.

The U.S. Chamber of Commerce said Hong Kong’s autonomy under the “one country, two systems” framework has “long been among its greatest assets.”

“It would be a serious mistake on many levels to jeopardize Hong Kong’s special status, which is fundamental to its role as an attractive investment destination and international financial hub,” the Chamber wrote.