Street Protests Die Down But Hong Kong Might Lose International Hub Status
Street protests in Hong Kong finally died down on Thursday after the Hong Kong government postponed legislative sessions following widespread riots on Wednesday, June 12, 2019, in front of Hong Kong government offices in Queensway in Admiralty. However, in the wake of these street protests, the most worrying news reports filed by media agencies around the world have not focused on the riots but on the adverse effects that Hong Kong’s new proposed extradition bill could have on the international hub status that the city has enjoyed over the past 50 years.
Home to more than seven million people, Hong Kong’s status as a free port and international business hub has always been predicated on its free-wheeling economy, coupled with its robust, transparent and independent rule of law inherited from the British. Although there were fears surrounding the former British colony’s future before its return to China in 1997, the successful implementation of Deng Xiaoping’s “One country, two-systems” principle in the initial years after 1997 reassured the international community that Beijing would take a hands-off approach and allow Hong Kong to continue to be run as a separate, independent, non-sovereign territory apart from China.
While it was always unlikely for Hong Kong to get democratic elections to pick its own chief executive, as Beijing’s crackdown on political activism for democratic elections in 2014 demonstrated, Hong Kong’s independent judiciary has always been one of its biggest pull factors that gave it the edge over other mainland Chinese cities when it came to attracting foreign investment. With the Hong Kong government still set on passing a bill that allows Beijing to extradite Hong Kong suspects to be to China, the international business community has expressed deep concern over the territory’s ability to stay independent.
Morgan Ortagus, a spokesperson for the Unites States State Department, expressed her concerns at a daily news briefing.
“The continued erosion of the ‘one country, two systems’ framework puts at risk Hong Kong’s established special status in international affairs. The United States shares the concern of many in Hong Kong that the lack of procedural protection in the proposed amendments could undermine Hong Kong’s autonomy and negatively impact the territory’s longstanding protections of human rights, fundamental freedoms and democratic values,” said Ortagus.
According to Ortagus, besides damaging Hong Kong’s business environment, the extradition bill subjects US citizens “residing in or visiting Hong Kong to China’s capricious jucicial system”.
With the United States in a major trade war with China at the moment, Hong Kong has avoided major tariffs so far because it is treated as “a nonsovereign entity distinct from the rest of China in matters of trade and economics” as stated in the United States-Hong Kong Policy Act of 1992. This allows Hong Kong to continue trading in the high-tech goods that have now been blocked from mainland China, which has caused mainland tech giants such as Huawei to be effectively blacklisted from running mobile software created in the United States.
If the extradition bill does indeed compromise the judiciary independence of Hong Kong and results in political dissidents and suspects being extradited to mainland China, the U.S. would be free to discard its 1992 policy and impose its tariffs on Hong Kong as part of its trade war with China. In 2018, U.S. goods and services with Hong Kong totalled an estimated US$67.3 billion. Exports to Hong Kong were US$50.6 billion; imports were US$ 16.7 billion. The U.S. goods and services trade surplus with Hong Kong was US$33.8 billion in 2018 and Hong Kong is currently the 21st largest goods trading partner with US$43 billion in total two-way goods trade in 2018. About 17 percent of the first wave of the U.S. 25 percent tariff on US$34 billion worth of Chinese goods passed through Hong Kong, accounting for 1.4 percent of Hong Kong’s overall trade. The U.S. was the second largest market for Hong Kong’s total exports in 2018 and Hong Kong’s entrepot trade with China and the U.S could effectively disappear if its port were no different from a mainland Chinese port.
Most importantly, Hong Kong’s current status as an aviation hub, financial centre and international hub for foreign companies would be in jeopardy if multi-national companies chose to move their headquarters to Singapore for better rule of law or to Shanghai for better connectivity and lower costs.
More than a million Hong Kongers had taken to the streets at the Admiralty business district in Hong Kong on Sunday to protest the passing of a bill enabling the extradition of Hong Kong residents to China. The protesters had turned up in force again on Wednesday to stop the scheduled legislative sessions from continuing and violence broke out as riot police fired rubber bullets into the crowd while using batons and teargas against protesters blocking access to legislative offices in Queensway in Admiralty. Civil Human Rights Front leaders have called for another mass rally on Sunday and a city-wide strike on Monday.