China’s Sovereignty Tripwire in Hong Kong

Hong Kong is a British city that happens to have an ethnic Chinese majority. It never wanted to be Chinese, still does not want to be Chinese, and never should have been Chinese. For reasons that remain obscure, Britain in 1997 abandoned its perpetual rights to Hong Kong and the Kowloon peninsula, at a time when China wasn’t sure it wanted the British colony. Once Hong Kong became Chinese sovereign territory by treaty, however, it fell under the iron law of Chinese imperial governance: China will tolerate no infringement on its sovereignty anywhere, because loss of sovereignty anywhere poses a threat to all Chinese sovereignty everywhere.

That is tragic for the Hong Kong majority that does not want to belong to China, but there is no facile solution. American support for Hong Kong’s pro-democracy protestors is so strong that the Senate passed the Hong Kong Human Rights and Democracy Act into law unanimously, and the House followed with a single vote against. President Trump did not seek the legislation but, given overwhelming support, had no choice but to sign it. Beijing has denounced the legislation as interference in its internal affairs and warned of dire consequences if the U.S. implements any of the act’s punitive measures.

Beijing now believes that the United States is exploiting the Hong Kong protests to undermine its sovereignty and destabilize China. That escalates Hong Kong’s local issues into a geopolitical tripwire. Some American policymakers think the same thing, although Trump is not among their number. The president’s “America First” policy does not seek to change the political system of other countries, however repugnant they may appear in American eyes, but rather to seek advantage for the United States.

The initiative for the Hong Kong legislation came from Sen. Marco Rubio and other neoconservatives, not from the White House. The same wing of the Washington foreign policy establishment that promised us democracy in Iraq and Afghanistan has undertaken a crusade for democracy in China. This whim has no more chance of succeeding than the Iraq and Afghanistan adventures, but there is a difference: China is not Iraq. It now has the capacity to neutralize every American asset in East Asia within hours of the outbreak of conflict. Iraq could only wear us down; China can blow us up. That should set a limit to our experimentation in regime change.

A prominent Chinese political observer told me that in China’s view, none of this is accidental: “I think none of the actors involved in this game—Beijing, the government of Hong Kong, the oppositions, the US—has made any mistakes. In the past months, all parties are collectively doing one job—transforming HK's local unrest into grand geo-political confrontation between China and the US. So, any possible future outcomes of HK issue would be directed by other bigger events from now on.” I think this is overwrought, but in the wrong circumstances, perceptions can be self-fulfilling.

Days before Trump signed the Hong Kong Human Rights and Democracy Act into law, former Secretary of State Henry Kissinger, the American diplomat who opened relations with China in 1972, issued the direst warning of his career: 

If conflict [between the US and China] is permitted to run unconstrained, the outcome could be even worse than it was in Europe. World War I broke out because of a relatively minor crisis . . . and today the weapons are more powerful. That makes it, in my view, especially important that a period of relative tension be followed by an explicit effort to understand what the political causes are and a commitment by both sides to try to overcome those. It is far from being too late for that, because we are still in the foothills of a Cold War.

Some background is needed in order to make sense of Kissinger’s concerns. Beijing blundered by instructing (or allowing) Hong Kong chief executive Carrie Lam—a former British subject and U.K. civil servant—to challenge Hong Kong’s administrative independence with an extradition law that the people of Hong Kong rightly viewed with suspicion.

Beijing also helped create the conditions for mass protests by allowing the Hong Kong government to run the land market in the interests of real-estate oligarchs, who want to limit the supply of new land for construction to prop up the island’s impossibly high home prices. Hong Kong is the only place in the world where Chinese can exchange the otherwise inconvertible national currency, the Renminbi, for a convertible currency, namely the Hong Kong dollar. For years Hong Kong laundered vast amounts of cash from the Chinese mainland. The Apple Store in Hong Kong Central used to have cash-counting machines for mainland customers who came in with suitcases of cash and left with a hundred iPhones. A great deal of Hong Kong’s luxury housing was purchased the same way. Many of the island’s luxury buildings are dark at night, because they are owned entirely by absentee mainlanders.

Limited land use and laundered money left Hong Kong with a home price to income ratio of nearly 50:1 (vs. about 10:1 in most of Europe and less than 4:1 in the United States). A young Hong Konger graduating from university today cannot hope to start a family before saving for twenty years or more. That contributes to the exasperation of Hong Kong’s young people, just as it does in Santiago, Chile, and other cities that have witnessed urban upheaval in the past year.

Source: Numbeo

The people of Hong Kong had legitimate grievances both on matters of rights and economic policy. The protest movement drew an estimated 1.7 million people, a quarter of Hong Kong’s total population, to an August demonstration. Afterward, a small core of protesters terrorized the city, causing hundreds of millions of dollars in property damage. This culminated in the November occupation of the Hong Kong Polytechnic University in Kowloon. Hong Kong’s 35,000 police gradually suppressed the violent protests with the loss of only two lives (compared to 19 dead in the protests in Santiago, Chile). Carrie Lam formally withdrew the hated extradition bill on Sept. 4, 2019, though the government still has to address the housing crisis. China believes that it acted responsibly against widespread violence. 

It is useful to contrast China’s patience in Hong Kong with the extreme measures it employed to crush the threat of Uyghur separatism in its western Xinjiang Province, where between 1 and 2 million Uyghurs have been incarcerated in “re-education camps.” The Chinese mainland is indifferent to events in Hong Kong, which mainlanders view as a foreign entity. Beijing saw no threat of the Hong Kong protests spilling over into the mainland, and played its cards patiently. But it acted swiftly and with shocking indifference to Western sensibilities when it perceived a security threat in Xinjiang. Western observers who imagine that events in Hong Kong might destabilize the mainland are out of touch.

Beijing perceives ulterior motives in America’s Hong Kong legislation. A foreign ministry spokesman said November 28 that the bill “seriously interfered with Hong Kong affairs, seriously interfered with China's internal affairs, and seriously violated international law and basic principles of international relations. It was a naked hegemonic act.”

China is a polyglot, multiethnic empire, not a nation-state. Infringement of its control over any part of its territory threatens the whole. Foreign intervention and regional divisions is the stuff of China’s historical nightmares. Any loss of sovereignty, in China’s experience, begins a slippery slope toward imperial crackup. Foreign invasion is still a living memory in China, and Beijing reads the worst into American intervention over Hong Kong.

China’s imperial structure is the source of its strength as well as weakness. Only a tenth of Chinese speak the court dialect Mandarin fluently; they converse rather in one of the 280 languages and dialects still spoken in China. The provinces have never shown affection for the tax collector in Beijing. What holds the country together, as it has since the founding of the Qin dynasty (from which the country’s name derives) in the 3rd century B.C., is the ambition of its Mandarin caste and the central government’s investment in the infrastructure—which has controlled floods and irrigated the Chinese plains since the 3rd millennium B.C. Centrifugal forces always lurk in the crevices of Chinese society, and the nightmare of every dynasty has been a provincial rebellion that encourages other provincial rebellions. China split into regions controlled by contending warlords during the civil wars of the 1920s and 1930s, and was unified by the Communists after World War II at frightful cost.

That explains why Beijing is willing to go to war over the South China Sea. It is an a fortiori demonstration in line with the Chinese proverb, “Kill the chicken while the monkey watches.” If we are prepared for war over a few islands to which our historical claim is arguable, Beijing is saying, think of what we will do in the case of Taiwan. When XI Jinping met President Obama at the December 2014 APAC summit in Beijing he said that China is two things, a people and a territory. The population may grow by 10 percent or shrink by 10 percent, but there will always be a lot of Chinese. The territory of China, though, is sacred and inviolable, and China never will give up the South China Sea.

One current of opinion in the foreign policy community sees in this circumstance an opportunity to destabilize China. That was the consequence of Western intervention in China during the “century of humiliation,” of which Chinese memory is vivid. Whether it is wise to destabilize a country that has the world’s longest-range nuclear-tipped missile, the Dongfeng-41, as well as hypervelocity glide missiles against which the United States presently has no defense, is another question.

The West is not guiltless in Hong Kong’s present problems, either. It was an unconscionable mistake for Britain to cede the territory to China when it had perpetual claim to Hong Kong and Kowloon, for once any territory passes formally into the Chinese empire, it becomes “sacred and inviolable” by Chinese criteria. The Thatcher government betrayed the people of Hong Kong who wished to remain a British colony rather than become a Chinese province. That is tragic for the people of Hong Kong, although China has for the most part respected the “two systems” part of the bargain.

Britain’s sellout of Hong Kong was especially onerous because China in 1997 was not eager to take over the island. This has been reported for years, and confirmed by declassified documents from the Thatcher archives. Peter Stein reported on May 15, 1997, on the theory that “China's leaders didn't really plan to take back Hong Kong on July 1, 1997; the British made them do it.” Stein cited “the latest supporter of this argument, Wong Man-fong . . . a former senior Chinese official. An ex-deputy secretary general of China's Xinhua news agency in Hong Kong, Mr. Wong also served on a Chinese task force aimed at formulating Beijing's Hong Kong policy in the early 1980s.”

No historian disputes that in 1979 Britain had a problem. Bankers and investors were growing nervous about Hong Kong's future after 1997. An important lease which Britain had signed with China after the Anglo-Chinese war in 1898 would expire that year. The lease covered large chunks of Hong Kong's suburban hinterland. Businesspeople needed to know: If they signed leases of their own for Hong Kong property that extended beyond 1997, would China support them?

“In the early stages, Beijing hadn't really considered taking back Hong Kong,” Mr. Wong said. “Beijing was more inclined to the idea of leaving the situation as it was.” China would simply label Hong Kong “an historic problem” which the Chinese and British governments “would discuss at an appropriate time.” That done, July 1, 1997, could come to pass, and nothing would have to happen. “The status quo,” said Mr. Wong, “would continue.”

Britain, though, made trouble by insisting on formal talks “to allow the British to continue ruling for another 30 or 50 years,” Mr. Wong said. He himself advised the British to take a more “abstract” approach, he says. But the British wouldn't budge. “The British strategy in fact didn't give China any way to step down.”

In 2014, Gywnn Guilford reported on newly-released materials from Baroness Thatcher’s papers:

When Mao founded the People’s Republic of China in 1949, he and Zhou Enlai decided not to seize Hong Kong—which the British at the time expected—because the capitalist territory was their lone source of foreign exchange and a strategic portal for manufacturing trade that would eventually drive China’s double-digit growth. As the newly declassified documents reveal, China’s leaders explicitly wanted to “preserve the colonial status of Hong Kong” so that the People’s Republic could “trade and contact people of other countries and obtain materials” it badly needed. Both the British and the Chinese governments benefited from the nearly 50-year deadlock of Hong Kongers seeing neither democracy nor an invasion.

After the fact, Beijing cannot allow Hong Kong to move toward independence without compromising the sovereignty principle that has governed the Chinese empire since inception. There are no backsies in China. If the West pushes too hard, Beijing will simply discard the “two systems” and integrate Hong Kong into the mainland, despite the inconvenience of losing access to a convertible currency and a financial market governed by Western law. Security always supersedes politics in China.

There is only one effective way to come to terms with China’s rising economic power and global assertiveness, and that is to strengthen the United States. I have long argued for a return to Reagan-style investments in basic R&D driven by frontier defense technologies in order to counter China’s drive for technological leadership. As former House Speaker Newt Gringrich argues in his new book Trump vs. China, “It is not China’s fault that in 2017, 89% of Baltimore eighth graders couldn’t pass their math exam. . . . It is not China’s fault that too few Americans in K-12 and in college study math and science to fill the graduate schools with future American scientists. . . . It is not China’s fault the way our defense bureaucracy functions serves to create exactly the ‘military-industrial complex’ that President Dwight Eisenhower warned about.”

Gingrich warns, “There is every reason to believe that China is catching up rapidly and may outpace us. This is because of us not because of them.” In the grand scheme of things, the Hong Kong business is a distraction, magnified by the same foreign policy establishment that distracted us with endless wars. Hong Kong provides no real leverage, and our attempts to exercise leverage well might bring disaster on the people of Hong Kong. The U.S. needs to get down to the grim and urgent business of competing with China for technological preeminence.

David P. Goldman is a columnist at Asia Times.