Eye on China: LAC Tensions – HK NatSec Law – Two Sessions End – 5G for D10 – Sino-US Frictions – Meng Wanzhou & Huawei

Eye on China is a weekly bulletin offering news and analysis related to the Middle Kingdom from an Indian interests perspective.

I. HK NatSec Law

This has perhaps been the most critical week in the history of Hong Kong since the 1997 handover. The UN Security Council reportedly informally discussed the developments in the city in a virtual and closed meeting. Earlier on Friday, US President Donald Trump announced the beginning of the process of ending the special relationship with Hong Kong. Speaking to the press, NYT reports that he said “he would begin stripping away Hong Kong’s privileges with the United States, including an extradition treaty and commercial relations, with few exceptions. He said that Hong Kong would be subject to export controls that prevent China from gaining access to certain types of advanced technology, but he did not specify whether the tariffs that apply to imports from the mainland would be expanded to Hong Kong.” He also added that he would impose new sanctions and visa restrictions on Chinese officials who played a role in “smothering” Hong Kong’s freedom. There’s of course, also the issue about US firms listed in Hong Kong. On this, there’s still no clarity.

In Hong Kong through this week, there were widespread protests, with riot police, tear gas, water cannons, pepper spray and pellets back on the streets. There were two reasons for this. First, there’s the controversial bill that penalises disrespectful behaviour towards the Chinese national anthem and then there’ the National People’s Council’s resolution on a new national security law. On the former, there was a debate in LegCo, which ended up getting disrupted after a lawmaker hurled a plant. On Wednesday, a day before the NPC announced its decision on the national security law, Hong Kong police arrested some 360 people. That night, US Secretary of State Mike Pompeo informed Congress that “Hong Kong is no longer autonomous from China.”

On Thursday, it was confirmed that the NPC had adopted a decision (full Chinese text) to enact national security laws in Hong Kong. Xinhua reports that “Rounds of applause erupted in the Great Hall of the People when the decision was passed…the decision will also allow the central government’s national security organs to set up agencies in Hong Kong when needed.” Speaking to the press after the decision, Premier Li Keqiang stated that the law doesn’t alter the One Country, Two Systems set up. The entire emphasis is on the need to tackle those “tiny number of people” calling for independence. Pro-Beijing Hong Kong politician Tam yiu-chung says: the law-based freedom of speech, freedom of the press, freedom of assembly enjoyed by Hong Kong residents will not be disturbed, their daily lives will not be affected, and the security of their property will continue to be protected.

HK Chief Executive Carrie Lam backed the law too. She said the objective of the legislation is to prevent, curb and sanction secession, the subversion of state power, the organization and carrying out of terrorist activities that seriously endanger national security, and interference by foreign and external forces in the affairs of the HKSAR. It will only target an extremely small minority of illegal and criminal acts and activities, while the life and property, basic rights and freedoms of the overwhelming majority of residents will be protected. Hong Kong’s lawyers are not that sanguine about the proposed law. In a statement this week, the Hong Kong Bar Association said that the “Draft Decision discloses a number of worrying and problematic features pertaining to the proposed HK National Security Law.”

It’s important to emphasise that this is a resolution that’s been passed and the law has yet to be enacted. “For the next step, the NPC will entrust its standing committee to make national security laws to be promulgated and enforced in Hong Kong,” Xinhua informed. Expect that to happen, by say August perhaps–ahead of LegCo elections in Hong Kong. But this distinction is important since it creates some space for diplomacy and pressure. So it will be interesting to see what positions states take.

Prior to Trump’s announcement on Friday, the Hong Kong government had warned that removal of the special status would be a “double-edged sword.” An example of what this means is this threat from former HK Chief Executive CY Leung to HSBC to pick a side, saying: “China and Hong Kong doesn’t owe HSBC anything, the China business at HSBC can be replaced overnight by banks from China and other countries.” Meanwhile, Nikkei Asian Review reports that Chinese banks and brokerages are asking Hong Kong staff to sign a petition supporting national security legislation.

There’s been no official reaction so far from many states, but this SCMP piece based on analytical takes and views from ASEAN countries and India argues that these governments are unlikely to take similar positions even if they have concerns about the city’s autonomy. Russia unsurprisingly has said that this is China’s internal issue (also check out this excellent Twitter thread by Alexander Gabuev on China-Russia relations amid the pandemic.). The UK, Australia, Canada, and the US put out a joint statement on Thursday. It doesn’t threaten action but says call on the Government of China to work with the Hong Kong SAR Government and that “we the people of Hong Kong to find a mutually acceptable accommodation that will honour China’s international obligations under the UN-filed Sino-British Joint Declaration.”

The EU, meanwhile, has taken an interesting position. EU Foreign Policy chief Josep Borrell on  did say that the NPC decision was a matter of “grave concern” but added that it didn’t put “investment deals” at risk. He also did not mention any action beyond raising “the issue in our continuing dialogue with China.” But earlier, Bloomberg had reported that Borrel had written to EU foreign ministers saying that China’s increasing control over the city “affects not only our direct interests in Hong Kong but also the maintenance of the rules-based international order where legal and political commitments are to be respected. The EU must, he added, continue “to ensure unified and robust messaging. EU Foreign Ministers discussed Hong Kong on Friday, issuing a brief statement. They expressed “grave concern,” adding that the “decision further calls into question China’s will to uphold its international commitments. We will raise the issue in our continuing dialogue with China.”

There are likely to be divisions among the EU’s ranks, and also within key states like Germany. This Bloomberg piece reports: “The Chinese move against Hong Kong caught everyone off guard, according to a German government official with knowledge of the thinking in the Chancellery. That contributes to the dilemma Germany finds itself in. Merkel isn’t willing to join Donald Trump’s attacks, which include repeated references to Covid-19 as a ‘Chinese virus,’ but she is aware the security situation in Hong Kong could deteriorate rapidly. Nobody wants a new Cold War, said the official, asking not to be named discussing internal strategy.”

Click here to read the full newsletter.