Hong Kong Crackdown Is Part of China's Larger Global Strategy, Experts Say

Editor's note: This article is part of a report examining what Hong Kong's national security law reveals about China's global ambitions, its impact on other countries and the human voice of what it means to create a new home in the world.

Schools and universities revising curriculum to add now-required teachings tying patriotism to loyalty to the Chinese Communist Party.

Speech therapists arrested for producing a children's book that portrays local police as wolves preying on activists depicted as sheep who are then arrested at sea while trying to flee to Taiwan.

Residents calling police hotlines to report "disloyal" neighbors and work colleagues. Students and teachers likewise urged to inform on each other.

Hong Kong today is a place transformed. Local government officials say a sweeping national security law ensures the respect of human rights, that residents still enjoy free assembly and freedom of the press, and point to other countries that have installed security legislation. But a little more than a year after Beijing passed the Hong Kong law, the territory is now a society approaching the Orwellian descriptions attributed to mainland China, where dissent is promptly extinguished and penalized.

[READ MORE: Activists, Families and Young People Flee Hong Kong Following Protests]

Many pro-democracy activists and politicians have either fled into exile or now languish in jail. Public protests once were ubiquitous sites on the streets of Hong Kong, but large-scale demonstrations are now banned. Local news media that once critically examined the levers of power and policy are now weakened, whether by self-muzzling to avoid publishing criticisms that could catch Beijing's eye, by being taken over by pro-Beijing forces, or by being shuttered outright by the authorities.

And in a territory where noise is constant -- from honking cars, creaky street trams, construction jackhammers and horns announcing the arrival of ferries -- silence is now the operative word when discussing the security law. All people contacted in Hong Kong and even some outside of the territory who work across various academic, public and private sectors -- including pro-Beijing politicians -- declined or did not respond at all to requests for interviews. "I need to lie low for a while out of concern for the safety of my family back in China," said one longtime analyst of Chinese politics.

"The calculus has changed, and for most people the risks (of speaking to the news media) are not worth it," says Natasha Kassam, director of the public opinion and foreign policy program at the Lowy Institute, a Sydney-based independent think tank. "I think that's really understandable, but also a clear representation of just how much Hong Kong has changed in the last few years. A place that was a city of protests for the last couple of years is now silenced."

Analysts say what is happening in Hong Kong is about more than the erosion of civil liberties that made the territory unique from the rest of China. Instead, it is a part of a larger Beijing playbook showing the country's ambitions that policymakers in the United States and elsewhere around the world must contend with, particularly across the Asia-Pacific region.

British Prime Minister Boris Johnson responded to the security law by offering resident visa status to Hong Kong holders of British National Overseas (BNO) passports. It is a rejoinder to what he says is Beijing breaking the 1984 Sino-British Joint Declaration that promised the "one country, two systems" approach that guaranteed Hong Kong autonomy for 50 years, beginning with the 1997 handover.

"I think the international community obviously sees Hong Kong as ... a warning about international agreements that you signed with the PRC (People's Republic of China), and the implications of that," says Dennis Kwok, a fellow at Harvard's Kennedy School of Government who was a former politically moderate lawmaker in Hong Kong representing the territory's legal profession on its Legislative Council. "I'm not sure we should be looking at Hong Kong in isolation. We should look at the whole situation regarding China's policy domestically, whether in Xinjiang, in Hong Kong, or ... its policy to Taiwan and the South China Sea.

"And also its relationship with Europe, with the U.K., as punishment toward Australia, arresting Canadian citizens," Kwok adds. "I think all of those need to be looked at in the full context in order to understand what China is doing."

Flight Out of Hong Kong

Numbers show the immediate change underway in Hong Kong: people leaving en masse.

By the local government's own accounting, Hong Kong's population decreased by 87,100 residents as of this past June compared to the end of June 2020, the first yearlong span since the security law took effect. Kassam notes that many places, including Australia, have experienced population declines because the COVID-19 pandemic forced lockdowns and shrank the immigration tap. Still, the Hong Kong announcement marked the first drop in the territory's population since 2003, when the deadly outbreak of severe acute respiratory syndrome, or SARS, struck both Hong Kong and mainland China.

More significantly, the amount of money people are withdrawing as they close pension plans in order to leave the territory is steadily increasing. From the first quarter of 2019 through the second quarter of 2021 -- the most recently available figures -- a total of more than $1.9 billion had been pulled out of Hong Kong's pension pool as people prepared to move out of the territory, according to data released from the Mandatory Provident Fund, Hong Kong's compulsory pension plan. The amount is startling because while large, it is also a fraction of the amount of money that could have been withdrawn, given that China now blocks departing Hong Kongers from accessing their retirement funds if they use BNO passports.

Likewise, the number of applications the Hong Kong police have issued that certify a lack of criminal convictions -- translated from colloquial Cantonese as a "clean sheets" request -- is on the rise. Many countries require proof of no criminal convictions before approving applications for migration visas and requests for eventual citizenship. The number of applicants this past June is more than double the number of requests in January 2017.

In both sets of figures, the number of shuttered pension plans and requests for proof of clean criminal records jumped dramatically in the third quarter of 2019 -- specifically in July 2019 -- and continued to rise thereafter.

Those actions came on the heels of multiple public marches in June 2019 against a proposed bill that would allow Hong Kong officials to extradite suspects to mainland China, protests that drew an estimated 1 million to 2 million Hong Kong residents onto the streets. On July 21, 2019, groups of men dressed in white attacked bystanders at a subway station in the northwestern outskirts of Hong Kong, a watershed moment now known as "721." The following month, a heavy-handed crackdown on protesters by the police culminated on Aug. 31 when police were filmed on live TV beating unarmed protesters -- the event known locally as "831."

^{Courtesy of the Associated Press}

The 2019 mass protests pushed Beijing lawmakers to confront the unrest in Hong Kong that began in 2014, when the territory's young adults led the so-called "Umbrella Movement" demonstrations that called for greater public participation in elections, says Mareike Ohlberg, a Berlin-based senior fellow in the Asia Program of the German Marshall Fund.

"I do think in 2019 there were already decisions made to take some more radical steps towards saying, 'OK, fine, we've lost the public on this one and now we need to re-establish control in a very radical manner,'" Ohlberg says. "I do think that was not necessarily a decision that was only made after the beginning of a pandemic. The (COVID-19) pandemic was probably more of an opportunity."

A Parallel System Overruling Local Courts

The debate about leaving Hong Kong reaches into the territory's sizable expatriate community. In July of 2020, The New York Times announced it was moving its international digital team of journalists, about one-third of its total Hong Kong staff, to Seoul, South Korea, because of concerns the security law raised about media freedom. Those worries were underscored when Hong Kong authorities this past June shut down the popular local daily newspaper Apple Daily and jailed its owner, Jimmy Lai, a vocal proponent of democracy.

This past May, 42% of members anonymously surveyed by the American Chamber of Commerce in Hong Kong said they were considering leaving the territory, a remarkably high response from a very pro-business constituency motivated to cash in on the lucrative mainland China market. While factors such as rising U.S.-China tensions and the high cost of living were cited, the most widely shared concern was how the national security law would affect daily life and the ability to conduct business in Hong Kong. Members expressed anxieties over the free flow of information, having a free, uncensored internet and -- critically -- having the rule of law continue as it had in Hong Kong courts.

Chamber officials did not respond to interview requests but have warned that Hong Kong is at risk of losing competitiveness on the international stage to other regional business and financial centers such as Tokyo and Singapore. European officials reiterated that warning this month.

The U.S. government issued an advisory in July warning American businesses about the potential risks Hong Kong's national security law poses. Legislative activity by Beijing, highlighted by the security law, presents operational, financial, legal and reputational risks to multinationals, according to the joint statement by four White House Cabinet-level departments.

[MORE ON HONG KONG: Hong Kong Residents Moving En Masse to the U.K.]

Kwok, the Harvard fellow, co-wrote a paper published in July analyzing the impact of the security law on international business conducted in Hong Kong. One of its conclusions: One of the most important aspects of the Hong Kong security law is that it now conforms to the approach on mainland China of using legislation, not precedent-setting court case rulings, to determine judicial rulings. Hong Kong's national security law essentially overrides a legal system built over the course of 150 years of British colonial rule and the more than 20 years of the Basic Law, Hong Kong's mini-constitution adopted in 1997 when the territory was returned to China.

The net impact, experts say: International businesses based in Hong Kong will need to evaluate whether their practices could potentially land them in trouble with Beijing.

"This (the security law) establishes a separate system that runs parallel to the other (Hong Kong court) system but that can overrule the other system at any point," Ohlberg says. "It establishes separate structures where you have less accountable people implementing this particular law that has been imposed from the outside, top down on Hong Kong."

Adds the Lowy Institute's Kassam: "I think that anyone who thought that the (Hong Kong) courts were going to have independence on how they interpreted this legislation were kidding themselves. I think it makes it really clear that this legislation is a political tool, and that is how it will be used."

Local Politics, Global Links (Or, All Politics Is Local)

That China's lawmakers passed a security law that could complicate how international business conducts itself in Hong Kong is not surprising, experts say. It extends China's use of legislation for political purposes. That was on display this summer, when China's top legislature proposed an anti-sanctions law for businesses in Hong Kong to counter penalties countries imposed on individuals and institutions over the security law. A vote on the law was delayed in August after banks and other financial institutions around the world expressed dismay over the proposed law.

"The international financial status is important, but the (domestic) political considerations are much more important than the Hong Kong IFC status," says Kwok. "The question I get asked most is, 'Why are they (Chinese leaders) doing this, are they crazy? Do they not care about international perception?' No, they don't. Right now, the No. 1 consideration is the domestic audience, how to get the domestic audience to support the CCP (Chinese Communist Party) regime, and also to support (President) Xi Jinping's regime."

In rebuttal, pro-Beijing voices say that approach is no different than any country, where the imperative is to generate public support for the ruling administration.

Those domestic Chinese political considerations are important for other countries to understand China today and where it is going, experts say. It's also essential to understand recent history. In the 1980s, when China negotiated with the British the handover of Hong Kong, the Asian giant occupied a different place on the global stage than it does today. It now has the world's second-largest economy, it is rapidly upgrading its military and is competing against the U.S. for global dominance in vital sectors such as technology.

Kassam says she believes the 2008-09 global financial crisis was a turning point for Chinese leaders, who began to see their country in ascendance and Western liberal democracies beginning to decay. Today, Chinese leaders see their country's response to the COVID-19 pandemic as far better than most of the world's liberal democracies. Viewed in those contexts, she says, Hong Kong "... is kind of a stubborn reminder of that time when China was weaker, and a stubborn holdout that the Western liberal system would always reign supreme. I think that is shaping so much of this."

U.S. Vice President Kamala Harris' recent trip to Southeast Asia signals a more assertive American approach in a part of the world that has become increasingly economically dependent on China. U.S. diplomats were dispatched to the region earlier this year. Washington struck a new military deal with the Philippines in July, and Bloomberg reports that roughly one-fifth of the vaccines the U.S. has donated globally have gone to Southeast Asian countries.

Many nations, particularly across the Asia-Pacific, will try to balance ties between the U.S. and with China, analysts say. But on some issues such as the treatment of technology companies, choices will have to be made: to favor policies from Beijing or Washington. Those decisions will ripple across the region, Kassam says, adding that China may likely want a political goal, such as ending an informal relationship with Taiwan, in exchange for investment in economic or infrastructure development.

"I think there's going to be more ... intersecting of politics and economics and a lot of countries are going to find it much, much harder to hedge and balance than they have in the past, with this kind of increasingly aggressive and domestically popular outlook that we see from Beijing."

Critical, too, will be the future links between the U.S. and China. In a blog post published in August, Ryan Hass, a senior fellow at the Brookings Institution's Center for East Asia Policy Studies, noted the widening gap of both countries' relative national power compared to countries; no other country comes close to matching the American and Chinese combinations of economic and military strength. But Hass also wrote that interdependence between the two powers is increasing.

"The dense webs formed by trade, financial, scientific, and academic links between the United States and China will make it difficult for one side to inflict harm on the other without hurting itself in the process."

Still, decoupling of sectors and supply chains between the U.S. and China is possible, especially with proprietary concerns over technologies such as chip manufacturing, or over-reliance on international supply chains to manage the COVID-19 pandemic.

Ohlberg, of the German Marshall Fund, says there may be some "unraveling" of the tightest U.S.-China links, such as in the financial markets and technology sectors. "Decoupling is not going to mean 'I'm just separating overnight,'" she says. "But we are moving in the direction of them actually separating and that's going to be interesting to watch -- and I think really, really scary."

Kevin Drew is the assistant managing editor for international news. He helped develop and launch Best Countries for U.S. News & World Report in 2016. He has worked in Asia, Europe and the U.S. for The New York Times, CNN, The Associated Press and other news organizations. He has reported from Africa, the Middle East and conflict zones such as Myanmar and the Balkans. He is a recipient of a DuPont Award for Excellence in Journalism for CNN's digital coverage of the South Asian tsunami, and a Peabody Award for CNN's coverage of Hurricane Katrina and its aftermath. Follow him on Twitter.