Hong Kong is at a significant crossroads—and its special trade status with the US has become a central point of leverage in determining the outcome of this crisis.
One year ago, millions took to Hong Kong’s streets in response to the Chinese government’s attempts to limit free speech, protest and unions rights. The protests would become one of the largest sustained protest movements in recent history, and would succeed in derailing repressive legislation that Chinese leadership was pushing through the Hong Kong legislature. But last month, China moved to skirt that legislature and impose from Beijing a national security law that threatens the freedoms of the Chinese government’s critics. It would allow HK residents to be arrested for criticizing the Beijing government and jailed in mainland China.
In this episode, Lori and Ryan discuss the protest movement and the central role US trade policies are playing in influencing the future of Hong Kong.
Transcribed by Kaley Joss
You're listening to rethinking trade with Lori Wallach.
Welcome back to Rethinking Trade, where we don't just talk about trade policy, we fight to change it. I'm Ryan, and I'm joined once again by our in house trade expert Lori Wallach. So, Lori, today marks 1 year since the start of these mass protests in Hong Kong. They are against an extradition law that was widely seen as opening the door to people in Hong Kong getting prosecuted and imprisoned in China. Recently, these protests flared up again because of a new national security law that China is imposing in Hong Kong. As we both know, the US-China and US-Hong Kong trade relationship have been a central part of that story on the show. We're going to talk about Hong Kong’s “special status” in relation to the US. We're going to talk about the protests, and how this all has to do with our trade policies. So, first, Lori can you describe Hong Kong’s special status in relation to the US, and what some of the trade issues are that have been involved in the recent discussions around Hong Kong?
Hong Kong has a special treatment in the trade world. Hong Kong has its own seat at the World Trade Organization, separate from China. Also, in US law there's a statute called the Hong Kong relations act which was passed in 1992. This basically guarantees that, as long as China continues to hold up the promises made to Hong Kong in the 1997 agreement between China and England, when England handed Hong Kong over to China, Hong Kong gets treated basically as a separate entity. What that means, practically, is that for instance when China is judged to be dumping products at below the cost of production and a penalty is put on Chinese imports, imports from Hong Kong don't get hit. Or, China has its own tariff schedule, Hong Kong has a different tariff schedule. Other differences are what the border taxes are, and if there's a penalty, like the section 301. But there is a condition to that, which is every year the US government has to certify that Hong Kong is in fact being given those special rights and treatments that China committed to. If that certification ends, then the 1992 Hong Kong Relations Act allows US presidents to basically withdraw that special treatment. That would mean higher tariffs on goods from Hong Kong, limits on investments from corporations incorporated in Hong Kong, and a variety of other penalties would then be able to be imposed.
So, recently, Donald Trump and Mike Pompeo made a move which a lot of people in Hong Kong seem to be supporting, even though it's venturing into unknown territory. Maybe you could talk about what that maneuver was.
So, part of the Hong Kong Relations Act requires a certification every year by the Secretary of State. This certifies that in fact Hong Kong is being treated autonomously, with respect to free speech rights, independent unions and the like. If that certification is done, then the special, preferential treatment included in the Hong Kong Relations Act is continued. For the first time since the act was passed in 1992, the Secretary of State Pompeo did not certify autonomy. This was notable, and was big news. Now, the president could, at any point, start to effectively impose detrimental pressure on Hong Kong, and therefore pressure on China.
This is one of things I'd love to hear your perspective on, because I know you've been talking organizer to organizer with activists in Hong Kong. I'm interested in hearing more details about what's going on in the protests there. I do know the motto of the protests has been “If we bleed you bleed,” which is to say, to mainland China, ‘if you cut off our rights then we're happy to have economic damage befall you’. That seems, maybe, to be part of the reason why the protest movement is happy that the U. S. decertified. Maybe, for once, Trump will actually follow through and do something that creates economic pain for China. That so far has not happened with respect to the Hong Kong actions. It's been shameful actually, but not surprising in the least, because in the whole year of these protests Trump has signaled he's with the president of China Xi as compared with the protesters. But I'm curious, Ryan, what you've picked up as far as why folks on the streets want pressure, and also how those protests are going?
One thing to keep in mind, is that there's been, you know, a year of sustained protests in Hong Kong. Some of these protests have been absolutely massive, with estimates of over 1,000,000 people. On several different occasions there's been lots of violence from the police. Some of the protests have been pretty violent as well. There's been fights between citizens in the streets as well as fights in parliament. It's a very significant situation, and a year of that will obviously harden people. I've spoken to groups from the more left wing progressive groups, as well as more middle of the road groups and the business community. The vibe generally that a lot of people indicate seems to be a general alignment on some big topics: cutting off the special status and seeing what that can do, agreeing with sanctioning targeted officials. This comes too after years of history. In 2014 there were huge protests in Hong Kong, and again back in 2003. This is just a recent development, but I think what's new is China's place in the world. There is a big question right now about what the future looks like, in terms of the US and China, and I think a lot of folks in Hong Kong are asking that question amongst themselves.
One thing that happened at the end of last year- so these protests began on this day a year ago, in June, and within a few weeks it became clear that this extradition law wasn't gonna fly. So, it was suspended. I think about a month later it was actually removed, and then a few months later was it was completely off the books. That was a pretty big victory, but the protest didn't stop because they saw what was coming. They're living in a place where their legislator is only partially elected, part of it is actually appointed by members of the corporate sector, which is really interesting. The results of that have been a pro-Beijing legislator for a very long time. That changed in November.
The elections in Hong Kong really swept pro-democracy people into parliament. It became clear to China that their attempts to pass any sort of an extradition law or any sort of laws governing activity in Hong Kong, wasn't gonna fly. So they just made this move, and said, well, “we’re making a declaration in the name of national security.” Under Hong Kong's relationship with China, they're technically allowed to do that. But, national security, as many people in Hong Kong we tell you, actually doesn't fall under criticizing the Chinese national anthem, or mocking the flag. There's actually strange overlapping interest between the streets, as in grassroots protest organizations, NGOs, student groups and people from the business sector. The interest comes in that there's a lot of people worried about what extradition could mean for them. A lot of people talked about the quote “white gloves in Hong Kong”, referencing Hong Kong's role as a money laundering hub for elites from China, so there's a lot of people who have a stake in the game. That's why I think we've seen such coalescing of people around the specific issues, such as cutting off the special status.
I think it's incredibly powerful and inspiring having watched what's happened in Hong Kong. The stakes are extremely high, as Hong Kong is this tiny island totally surrounded by China, officially controlled by China. China is notorious for not having rule of law or rights for citizens, and yet you have seen this incredible social solidarity of, as you said, a very diverse set of interests. Many of them are for protecting specific rights, a way of life of free speech and freedom. Some certainly are protecting commercial interests, because Hong Kong is operating commercially very differently than China. But, unified in a way that beat [overthrew] a head of state, officially appointed from Beijing. And Beijing made sympathetic leader Carrie Lam, withdraw outrageous policy proposals. So it is both inspiring what they accomplished and then kind of crushing to see how Beijing just, autocratically imposed a new measure which would go into effect. It literally would make a lot of what everyone listening to this podcast, and what you Ryan and I, do every day, a crime, which is criticizing the government. You could be swooped up out of your home and dragged off to a not-real court in Beijing, and then chalked into jail indefinitely in Beijing. For folks in Hong Kong, which is such a different culture that in Beijing, it's a life or death matter. It strikes me at this moment- we're in the United States, where tens of millions of Americans who have also, an incredibly inspiring way, taken to the streets over a life and death matter, which is historic structural racism in this country. It is really really hard, and difficult. Scary confrontations have happened between very established powers and people's aspirations to fight for their rights. There is a way in which the situations are entirely different, but also are both really inspiring examples of people power. Having spent a considerable amount of time in Hong Kong with friends there, but also during the WTO ministerial, their powerful protest movements there, or ‘the year of endless protests’ in a way is probably a foreshadow of the continuing work in the U. S., as we are also in a long term fight for basic rights.
Absolutely, and I think, in a way to look at Hong Kong there's two things. One, it comes as part of this wave of global, unprecedented protests and shifting political events around the world. Especially since the economic crisis. And, it also comes in this time where China is asserting itself globally as a real power. Hong Kongers are looking at that, at their place in the world in between these two super powers, and they're taking initiative to try to create their future in the way they want it, rather than it being dictated from outside. And I think that that kind of ties into stuff that you've been writing about and talking about recently, especially sparked by the covid-19 and the pandemic. But, also it's been coming for a while- there are big shifts happening in the world, and we're in this moment where new ideas or even old ideas that are still good ideas have a new place at the table.
We're pushing some of those in the trade world. Maybe you could talk about the situation out of Hong Kong, in the US and China, conversations you've been having about a progressive approach to China, and how our trade policies with China need to change?
I think that as we look at the economic relationship between the U. S. and China it cannot be divorced from the broader geopolitical dynamic between the US and China. You've described it as sort of a babble of different views about how society and economy should be organized, neither of which are entirely inspiring. However, by many orders of magnitude, the situation in China, with respect to basic rights for people to express their opinions; protest; organize for themselves in their workplaces, as unions or as individuals fighting for control of their communities, of the land that gets grabbed out from under them; fight against pollution- all of those basic fundamental rights are denied in the Chinese system. They’re criminalized, there's no rule of law. And, there are a couple hundred very powerful families who are integrated in the Chinese ruling government system, through the Communist Party in China, and through the economic system. Very government affected and controlled. Many of them owned companies, and as we think forward about what a better relationship between the US and China would entail, the economics of it include something that has to do with us, not China. Which is, as the COVID crisis has shown, the hyper-globalization of our economy through decades of corporate trade agreements has gotten rid of the redundancy of production, and has created extremely long brittle supply chains which are to rely on one country. That country happens to be China, but if that one country were England it would still be a problem. This lesson is we need redundant supply chains in different parts of the world, and we need some domestic capacity. So, that when countries, reasonably, are looking to take care of their own citizens, and send their own supplies to domestic needs, we have some ability in critical goods to make some portion of what we need. That way we can balance the way the global economy production occurs so that we have more capacity domestically. We don't have to be totally self reliant by any means, but some capacity. We cannot have a scenario where we don't make, at all, certain medicines and certain active pharmaceutical ingredients, in the continental size country like the United States. And, we need to diversify the supply chains in trade. So that, heaven forbid, there is a natural disaster or whatever it is, that knocks out production as it did in China, and we see huge crashing imports, we don't end up quickly with major shortages that make our situation worse. But, all of that aside, that's medium term and long term thinking. The short term question is, is the US going to actually do anything to protect people in Hong Kong? Or, is President Trump just gonna stand by, and let the Beijing dictatorship crush free speech and democracy in Hong Kong.
Rethinking trade is produced by Public Citizen's Global Trade Watch, where we don't just talk about trade policy, we fight to change. Visit rethinktrade.org today to get involved in our campaigns and help us fight for global economic justice.