GP Insights # 373, 27 June 2020
The US Senate has unanimously passed two bills that would impose sanctions on the Chinese officials who undermine Hong Kong's semi-autonomous status, as well as the banks and state entities that do business with them. One of the bills, the Hong Kong Autonomy Act, would impose sanctions on businesses and individuals that help China restrict Hong Kong's autonomy. The second bill from Missouri Republican Senator Josh Hawley is a resolution condemning China for violating a 1984 agreement to guarantee autonomy for Hong Kong.
The legislation would require the Trump administration to act "on individuals in the government of China who are undermining the rights of people in Hong Kong". The legislation also brings financial institutions such as banks that are seen as "aiding and abetting" China's position leading to undermining of rights of the people in Hong Kong. The legislation will now be taken up in the House of Representatives where two lawmakers have introduced a companion bill. At this stage, it is unclear if the White House will implement the bill.
What is the background?
First, the bill is likely to ban all opposition in Hong Kong. A day after the US Senate passed the Hong Kong Autonomy Act, the US State Department took another step by imposing visa restrictions on Chinese officials over the Hong Kong National Security law. The restrictions are targeted at Chinese Communist Party officials whom the US believes are behind the new law to be imposed on Hong Kong. Beijing has not yet released the full details of the legislation, which is expected to be passed by 30 June. Earlier, Trump has also declared that the US will end its preferential treatment of Hong Kong.
Second, Trump administration's continued tough stance on China. This step is in continuation of the Trump administration's decision to take a tough stand against China on a range of issues including trade and human rights. On 17 June, President Trump signed legislation calling for sanctions over the repression of China's Uighurs. China has threatened 'retaliation' after Trump signed the legislation calling for sanctions over the repression of China's Uighurs.
What does it mean?
First, the two bills related to Hong Kong are intended to send China a strong message that there will be serious consequences for undermining human rights as well as on Beijing's decision to impose restrictions of any form on Hong Kong's autonomy. The recent decisions are reflective of further hardening position of the US vis-a-vis China.
Second, the US-China relations are moving rapidly towards an irreversible downward spiral. Even before the ongoing pandemic, the US-China ties were at a historic low. As the pandemic has raged on, revealing some of the worst vulnerabilities of the US, China has scrambled to use the moment as an opportunity. It has not only opened multiple fronts of conflict and contestations with other countries but seems to be assessing the current times as an inflection point in its transition to great power. As such, in most assessments, China's preparations to integrate Hong Kong, and even invade Taiwan, are being seen as more ready than ever. The series of steps by the US geared towards deterring China from succeeding in its attempt to do so.