Heisenberg Report

Knife’s Edge: China Plans Serious Hong Kong Escalation As Trump Accuses Xi Of Letting ‘Plague’ Spread

Tentative signs that the European economy may have hit bottom in April were largely overshadowed on Thursday by concerns around the state of US-China relations after Donald Trump implicated Xi in a series of irritated tweets.

“Spokesman speaks stupidly on behalf of China, trying desperately to deflect the pain and carnage that their country spread throughout the world”, Trump seethed. “Its disinformation and propaganda attack on the United States and Europe is a disgrace”, he went on to say. “It all comes from the top. They could have easily stopped the plague, but they didn’t!”

It’s still not clear which “spokesman” Trump is referring to. In another Wednesday tweet, the president accused an unidentified “wacko” of making misleading statements around what he called a “mass worldwide killing” perpetrated by China. The inflammatory posts came as lawmakers on Capitol Hill pressed ahead with a bill which could entail delisting some Chinese equities from US exchanges.


Although Global Times editor Hu Xijin doesn’t meet the description of the “dope” Trump was addressing (Hu isn’t an official “spokesman”), he was more than happy to engage. He did so again in response to Trump’s latest social media rant. “On the contrary, Chinese netizens wish for your reelection because you can make America eccentric and thus hateful for the world”, Hu shot back. “You help promote unity in China and you also make international news as fun as comedy”.

Ouch.

On Thursday, Chinese foreign ministry spokesman Zhao Lijian appeared to dodge questions about whether he might be Trump’s “wacko”, choosing instead to focus on Mike Pompeo, Taiwan, and Hong Kong.

Speaking of Hong Kong, Beijing is angling to crack down on dissent after nearly a year of pro-democracy protests which only abated when the virus made street demonstrations perilous. In a potentially serious escalation, China will attempt to write laws barring treason, sedition and secession into Hong Kong’s charter.

Specifically, HK01 said Thursday that China intends to demand a “Hong Kong version” of the mainland’s national security law be passed by the city’s Basic Law. It wouldn’t be the first time the subject has been broached, and it goes without saying that a new push would almost surely reinvigorate demonstrations.

A rough translation of HK01’s reporting describes the process China and pro-Beijing lawmakers in Hong Kong may try to use in order to circumvent procedural hurdles:

According to the news, the “Hong Kong version of the National Security Law” has nothing to do with Article 23. It is an independent new law that plugs the loopholes in Hong Kong’s national security and sets out specific penalties. After the NPC proposal is passed, it will be implemented in Hong Kong by putting it in Annex III without going through Hong Kong. The legislative process of the Legislative Council.

Article 18 of the Basic Law states that national laws are not implemented in the Hong Kong Special Administrative Region except those listed in Annex III of this Law. All laws listed in Annex III of this Law shall be promulgated locally or implemented by the Hong Kong Special Administrative Region. The article also states that the National People ’s Congress Standing Committee may, after consulting the Hong Kong Special Administrative Region Basic Law Committee and the Hong Kong Special Administrative Region Government to which it belongs, increase or decrease the laws listed in Annex III of this Law. It is limited to laws related to national defense, diplomacy, and other laws that are outside the autonomy of the Hong Kong Special Administrative Region in accordance with this Law.

Carrie Lam recently described the national security laws as “important constitutional requirements for the government [considering] recent violence”. She also described some actions taken by protesters as “near terrorist acts”.

The Hong Kong dollar weakened on the news.

“The market is taking this negatively for Hong Kong given the likely return of violent protest activities, higher risk for the US to remove certain preferential terms for Hong Kong, such as the special tariff status, and risk-off sentiment”, Becky Liu, head of China macro strategy at Standard Chartered Bank remarked.

US lawmakers – who passed legislation last year aimed at bolstering the Hong Kong demonstrators – will not be amused with this. The US State department will likely issue a scathing critique, prompting still more irritable exchanges between sundry “wackos” (as Trump would put it).

The Global Times’ Hu, in the course of responding to Trump’s latest recriminatory tweets, told the US president the following: “Chinese netizens call you ‘Jianguo,’ meaning ‘help to construct China.'”