End Game Nears In Hong Kong, As China Releases Details Of National Security Plan

The details of China’s new national security law set to be imposed on Hong Kong were released Saturday. Not surprisingly, they appear to represent a threat to the city’s autonomy and could profoundly impact the way the world views life in the bustling financial hub, which was plunged into crisis a year ago.

Although the language employed in the explanation of the new law pays lip service to judicial independence and the right of Hong Kong citizens to exercise free speech and protest, the details seem to tell a different story.

For example, Hong Kong will be required to establish a new committee, which Xinhua says will “assume the main responsibility for maintaining national security, and accepts the supervision and accountability of the Central People’s Government”. The committee will be “advised” by Beijing.

Additionally, it sounds as though China will set up its own national security apparatus in the city, which will “analyze and judge the situation, provide opinions and suggestions on major strategies and supervise, guide, coordinate, and support the implementation of the maintenance of national security”.

Further, the central government’s national security arm in Hong Kong will “collect and analyze intelligence information [and] handle crimes against national security according to the law”.

That sounds somewhat foreboding. Beijing attempts to soften it a bit, suggesting that although the mainland will, in fact, be able to override Hong Kong’s legal system, that will only apply in “specific circumstances”.

“It should be noted that… the relevant national authorities exercise jurisdiction over a very small number of crimes”, Xinhua says.

Claudia Mo, a prominent pro-democracy lawmaker, didn’t mince words. “This will hollow out Hong Kong, as far as I could see”, she remarked. “This new law can simply mean anything Beijing wants it to mean”.

Indeed. And that was surely by design.

One thing that is clear from the draft is that Carrie Lam will be able to choose which judges oversee national security cases. I’m not sure how else one could interpret the following passage.

The Chief Executive of the Hong Kong Special Administrative Region shall appoint a number of judges from the current or qualified former magistrates, district court judges, judges of the Court of First Instance of the High Court, judges of the Court of Appeal and judges of the Court of Final Appeal. The judges appointed by the committee are responsible for handling crimes that endanger national security.

Perhaps most unnerving of all is the language around schools and universities where, according to the draft, Hong Kong needs to “strengthen the work of safeguarding national security and preventing terrorist activities”.

Clearly, that is aimed at quelling campus protests and otherwise ensuring that schools do not become hotbeds for dissent. Under the new law, Hong Kong is required to “take necessary measures to strengthen supervision and management of matters involving schools and social organizations”.

In remarks to The New York Times, Jerome Cohen, a professor of law at New York University, described the draft as “a dramatic change in the administration of justice in Hong Kong [which] gives central authorities control that was never anticipated”.

Hong Kong was still reeling from months of protests when the pandemic hit, and while the city was mercifully spared the worst of the coronavirus, it is still mired in recession. The local economy contracted a record 8.9% YoY in the first quarter, worse than the Great Financial Crisis and the Asian Financial Crisis.

Retail sales have collapsed, along with visitor arrivals and any number of other data points you care to consult.

The government has adopted round after round of stimulus, but the headwinds facing the city are gale-force.

According to the Official Receiver’s Office, petitions for bankruptcy rose to 2,079 in May, the most in 17 years.

Admittedly, I haven’t worked with that data set previously, but simply extracting it and charting it produces the figure below.

It goes without saying that the new national security laws are likely to exacerbate the city’s economic woes, at least in the near-term.

One could conceivably argue that the specter of Xi’s heavy hand will intimidate protesters into submission, and that once the demonstrations are over, business activity will pick up, especially if the virus remains under control. Once the rest of the world recovers from COVID, exports should increase.

And yet, the draft version of the national security bill suggests judicial independence is effectively gone. That has implications far beyond the protesters. Beijing will almost surely interpret the language in the new law however it sees fit, which makes sense considering they wrote it.

The last sentence of the draft published on Saturday reads as follows: “If the local laws of the Hong Kong Special Administrative Region are inconsistent with this Law, the provisions of this Law shall apply; the power of interpretation of this Law shall belong to the Standing Committee of the National People’s Congress”.

That should clear up any lingering questions.

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