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Hong Kong -- a Crisis Neither Beijing nor Washington Wants to See Spiral out of Control

Aug 29 , 2019

The months-long political crisis in Hong Kong, initially triggered by a controversial extradition bill, appears to have no end in sight. Undoubtedly the most serious challenge the former British colony has confronted since returning to Chinese rule in 1997, this crisis, already marked by an unprecedented degree of violence and use of police force, has the potential of spiraling out of control. In the worst-case scenario, the Chinese government may deploy its own security forces to crack down on the protesters and attempt to restore order. Such an outcome would be calamitous for Hong Kong, China, and U.S.-China relations.

In the case of Hong Kong, a military crackdown executed by mainland security forces will likely result in serious civilian casualties and injuries, further alienating the people of Hong Kong from the mainland. Such an event would also officially mark the end of the “one country, two systems” model since the reassertion of China’s authority in the city would require a prolonged presence of mainland security forces, a significant strengthening of the presence of the Chinese Communist Party, and creeping control of Hong Kong’s businesses.

For China, such a crackdown would be an unabated disaster as well. Besides the torrent of international condemnations, Beijing would lose Hong Kong as a valuable conduit between China and the global economy. To be sure, Beijing fully understands the consequences of a military crackdown and has so far regarded this option as last resort. Nevertheless, the Chinese government has made preparations for this contingency and signaled its resolve, such as amassing security forces near Hong Kong and deploying increasingly harsh rhetoric to denounce the protesters.

A third casualty will be U.S.-China relations, already strained to the breaking point by the trade war, strategic competition, and ideological hostility. Should a military crackdown occur, Washington will have no choice but to suspend the Hong Kong Policy Act that gives the city special status and privileges that no mainland cities enjoy. The Trump administration is likely to also impose new sanctions targeting the Chinese economy, senior government officials, and tech companies. The incipient U.S.-China cold war could escalate to a more dangerous level.

Even if Beijing continue to exercise restraint and the Hong Kong government manages to weather over this crisis, the protests and the way China has responded to them have already inflicted substantial damage to Sino-American ties.

For starters, the Chinese government and official media have accused the United States government of being the “black hand” (or instigator) behind the protesters. Such accusations, leveled without much convincing evidence, have not only angered American officials, but have also struck impartial observers as puzzling. If anything, President Donald Trump has exhibited little interest in human rights issues. In the case of Hong Kong, his rhetoric has been remarkably muted. Instead of sternly warning Beijing against using force in Hong Kong, he merely hoped that the crisis would be handled in a “humane way.”

In addition, the crisis in Hong Kong has severely damaged China’s image in the U.S. The prevailing narrative about the crisis is that it originated from the flaws of the “one country, two systems” model and from the erosion of the city’s freedom and autonomy under Chinese rule. Regardless of the merits of this narrative, it has dominated the discourse on Hong Kong and decisively influenced American public opinion. Some critics of China, such as Republican Senator Marco Rubio, have seized this crisis as evidence of China’s untrustworthiness.
Taken together, the Hong Kong crisis has strengthened the case of the hawks in Washington for confrontation against China.

By pure coincidence, the crisis in Hong Kong erupted when the U.S.-China trade war began to escalate dramatically. An understandable concern is whether this crisis would make it even more difficult for Beijing and Washington to reach an agreement.

Based on the events that have occurred since June, it seems that the crisis in Hong Kong, while decidedly a negative development, has had only negligible impact on the U.S.-China trade negotiations. The U.S. negotiators went to Shanghai at the end of July as scheduled (when the crisis in Hong Kong was worsening rapidly). The escalation of the trade war on August 1, when President Trump announced tariffs on an additional $300 billion Chinese goods, was not triggered by anything to do with Hong Kong, but by Trump’s anger upon learning that China had resisted his demand for large purchases of American agricultural products. Trump’s latest escalation – raising tariffs on Chinese goods by an additional 5 percent (30 percent on $250 billion of Chinese goods on October 1 and 15 percent on $300 billion of Chinese goods on December 15) – happened after Beijing responded to Trump’s earlier escalation with tariffs on $75 billion of American goods.

The crisis in Hong Kong has not materially affected U.S.-China trade negotiations because these negotiations had hit an impasse and both sides tried not to further complicate their tasks of reaching a deal by involving an irrelevant political matter, such as the Hong Kong protests. Even without the protests engulfing Hong Kong, Washington and Beijing are too far apart on the most critical issues, such as the lifting of tariffs, the amount of American goods China pledges to buy, and the terms and mechanisms of enforcement.

In the months ahead, should the U.S.-China trade negotiations continue (a diminishing prospect due to Trump’s escalations and threats to force American companies to cease doing business with China), one can safely expect Beijing and Washington to keep Hong Kong out of their discussions. Of course, if the crisis in Hong Kong spirals out of control and forces the Chinese government to deploy security forces in the city, one can also bet that it would not be politically possible for these negotiations to continue, let alone strike a deal. The pressure in Washington on Trump to get tough on China will be so loud and powerful that he will have no choice but to call off the talks and even agree to new sanctions.

Given the high stakes, Beijing has exercised caution despite its tough rhetoric. But its current strategy, which is based on the assumption that the protests will peter out eventually, is unlikely to work. It is time for Beijing to try Plan B – encouraging the Hong Kong government to engage in dialogue with the protesters and seek a peaceful resolution of the crisis.

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