Geopolitics Watch: The US and the CCP Have Reached a Watershed Moment on Hong Kong

◎ How the U.S. and the world respond to the PRC’s statements and actions concerning Hong Kong over the coming days and weeks would determine whether or not the world sees another Tiananmen-style incident.


The People’s Republic of China recently issued official statements with dire implications for Hong Kong.

On July 23, Xinhua published an obituary for former PRC premier Li Peng. In assessing Li’s role in the Tiananmen Square massacre, the obituary noted that “he, along with most of the members of the Political Bureau of the CPC Central Committee, made decisive moves to stop the turmoil, end the counter-revolutionary riot and stabilize domestic situation and played an important role in the major struggle concerning the future and fate of the Party and the state.”

During a press briefing on July 24 to introduce a defense white paper, PRC defense ministry spokesman Wu Qian said that the communist regime has been “paying close attention to the developments in Hong Kong” after “riots” on July 21 where “radical forces besieged the Liaison Office of the Central People’s Government in HKSAR.” In replying to a question on how the People’s Liberation Army will handle escalation of protests in Hong Kong, Wu cited the PLA Garrison Law and said that it “already has a clear stipulation.” Wu Qian’s remarks signal possible PLA intervention in Hong Kong.

On July 29, the PRC’s Hong Kong and Macau Affairs Office, which has cabinet-level authority over Hong Kong, issued its first statement on the protests since they began in June. Spokesman Yang Guang made several remarks which indicate that the CCP is prepared to use violence to suppress the Hong Kong protests, including his misrepresentation and criticism of protester behavior, his encouraging the Hong Kong people to take a “clear-cut stand” (旗帜鲜明, a flashback to the 1989 “April 26 Editorial” published before the Tiananmen crackdown) in “opposing and resisting violence,” and his vague response to a question about possible military action.

Meanwhile, Bloomberg News reported on July 30 that the White House is monitoring “units of the Chinese military or armed police” that had “gathered at the border with Hong Kong.”

Taken together, the official statements and news above sent the following message: The Chinese Communist Party is preparing and will not hesitate to use violence and military force to “stop the turmoil” in Hong Kong and “end the counter-revolutionary riot” which presently threatens the “future and fate of the Party.”

Based on our understanding of CCP characteristics and thinking, as well as our research into the CCP factional struggle, we believe that the Communist Party cannot avoid the use of violence and bloodshed to suppress the Hong Kong protests if current trends persist or escalate. This means that a watershed moment has arrived for Hong Kong. How the United States and the world respond to the PRC’s statements and actions concerning Hong Kong over the coming days and weeks would determine whether or not the world sees another Tiananmen-style incident.

Our take:
The CCP views the world through an interest-driven, ideological, paranoid, and survival-domination focused lens. Observers must stand in the CCP’s shoes to grasp what it is currently thinking and anticipate its future moves. Below, we examine the factors for why the CCP will likely use violence, including methods like swaying the Hong Kong police force, deploying undercover People’s Army Police forces in Hong Kong, and mobilizing the People’s Liberation Army, to quell the Hong Kong protests.

Losing hearts and minds
To survive, the CCP must dominate. Hence, controlling the masses is a top priority for the Communist Party. To control the masses, the CCP relies on propaganda work and the military, or what Mao Zedong refers to as the “Party’s pen and gun” (筆桿子,槍桿子), in that order. In normal times, the CCP spreads propaganda to brainwash people and carries out united front work to co-opt, corrupt, or coerce the population into not turning against Party rule. When the CCP feels that propaganda and united front work no longer have an effect on reining in the people and that it has lost their hearts and minds, it turns to the People’s Liberation Army to suppress the masses through violence and bloodshed to “kill the chicken to scare the monkey” (殺鷄儆猴). The Tiananmen Square Massacre is the most striking example of Party orthodoxy in action.

From the CCP’s perspective, developments in Hong Kong strongly indicate that it has lost the hearts and minds of the city’s people:

1. Since early June, millions of people have taken to the streets in consecutive weeks to protest a controversial extradition bill. The protesters are also demanding that the Hong Kong government address and resolve several issues connected with the extradition bill protests, including the government labeling a protest on June 12 as a “riot” and the resignation of Hong Kong leader Carrie Lam. Workers and students have also gone on strike to protest the Hong Kong government, and are planning more strikes. The CCP loathes sustained, mass protests because such protests portend a coming color revolution.

2. With some exceptions, the bulk of the demonstrations were carried out peacefully with protesters displaying high civic-mindedness (picking up litter before leaving, acts of kindness by all parties, etc.). Protests are also organized in a decentralized manner with no clear protest leader. The CCP fears civic-minded, decentralized, and peaceful protests the most because such protests are tolerable to the bulk of the populace and do not leave any opening for Party to exploit to shut them down. To clamp down on protests, the CCP must find ways to turn protests violent and chaotic (utilizing triads and thugs, encouraging police violence, etc.) so that it can justify heavy-handed government intervention. While the CCP has undoubtedly tried to radicalize the protests and protesters, most prominently in the Yuen Long incident on July 21 where triad members attacked protesters while the police responded passively, it has thus far not found any real success.

3. From our study of Hong Kong news reports, social media posts, online forums, and on-the-ground information, we have observed that the Hong Kong public is largely supportive of the young “frontline” protesters. Because the young protesters refuse to accept donations from the public to deny pro-Beijing lawmakers a reason to accuse them of “doing things for money,” Hong Kong residents and businesses have instead been assisting them in non-monetary ways, such as offering free food vouchers, protest supplies, and ride services. The Hong Kong public also showed understanding towards the protesters who tried to delay trains during rush hour as a form of protest. The sustained, united public support shown towards the protesters stands in contrast to the 2014 Umbrella Movement where the young protesters lost public support after a period and saw the protest movement fracture towards the end of the demonstrations.

4. While the protest demands are currently aimed at the Hong Kong government, the CCP knows that the longer the protests drag on, the more likely its rule over Hong Kong will be challenged next. Hong Kong protesters have already begun taking their message to Chinese and other tourists by holding demonstrations in Hong Kong’s airport and in areas frequented by mainland tourists. Also, the Hong Kong police will also become overworked from having to deal with protests every week, and could become less effective over time.

The CCP cannot allow the situation in Hong Kong to drag on and “contaminate” the mainland. And if the Party has deemed that it has lost the hearts and minds of the Hong Kong people, it is only a matter of time before it decides to draw the line and conduct a bloody suppression.

Economics
The mass protests and strikes have affected Hong Kong’s economy and its status as an autonomous international trading hub. With the economy rapidly deteriorating on the mainland and the financial interests of many CCP elites parked in Hong Kong, the PRC still has an incentive to not intervene militarily in the city to at least preserve its international trading hub status. But if the CCP believes that the Hong Kong protesters have breached its “bottom line,” it will not hesitate to sacrifice its financial interests in Hong Kong and resort to more violent measures to prevent “counter-revolutionary” forces from sparking a color revolution on the mainland.

‘Foreign interference’
The CCP fears an ideological battle and being pressured over its human rights violations, two issues which pose an existential threat to its rule over China. And from the CCP’s point of view, recent developments in the U.S. would confirm its fears that the Trump administration has already begun playing the human rights card and an ideological confrontation with the PRC:

1. In the week of July 8, Hong Kong media mogul Jimmy Lai made with U.S. Vice President Mike Pence, Secretary of State Mike Pompeo, and White House National Security Advisor John Bolton in Washington. Lai’s Apple Daily newspaper is known for its pro-democracy stance. When asked about the meeting between Lai and top U.S. officials, the PRC foreign ministry said that it “resolutely opposes foreign forces’ intervention in Hong Kong affairs.”

2. In the week of July 15, the U.S. Department of State held its second Ministerial to Advance Religious Freedom. As part of the ministerial’s activities, President Donald Trump met with 27 victims of persecution in the Oval Office, including the daughter of a famous Uyghur scholar who is being detained in Xinjiang and a Falun Gong practitioner. Vice President Mike Pence and Secretary Mike Pompeo also strongly criticized the PRC in their remarks on religious freedom.

In our analysis on July 19, we wrote: “We believe that the Trump administration is merely hovering a finger over the human rights ‘nuclear’ button. Based on our long-term research into the CCP, however, it very likely now believes with great certainty that the U.S. has already pressed the ‘nuclear’ button.”

On July 29, Sam Brownback, the Ambassador-at-Large for International Religious Freedom, tweeted about the persecution of Falun Gong on July 20 and noted that the “Chinese Communist Party’s actions are unacceptable.” Brownback’s tweet came on the eve of the latest round of Sino-U.S. trade negotiations in Shanghai. We believe that the CCP will unlikely dismiss the timing of Brownback’s tweet on Falun Gong as a coincidence, but instead view it as further evidence that the Trump administration has indeed gone “nuclear” with human rights.

3. On July 18, The Journal of Political Risk published an open letter addressed to President Trump which called on him to “stay the course” on China. The letter was signed by 130 veterans and former U.S. military and intelligence officials, scholars, Chinese dissidents, and other China watchers. (Disclosure: Three SinoInsider experts signed the “Stay the course on China” letter.) PRC state and Party media strongly attacked the letter during the entire week of July 22.

In our analysis on July 26, we wrote that from the CCP’s perspective, the letter “represents the emergence of the anti-communist united front, the undoing of the CCP’s external propaganda work, a coming ideological confrontation with America and the free world, and ultimately, the endangering of the CCP’s revolution.”

4. On July 23, PRC foreign ministry spokesperson Hua Chunying claimed that U.S. officials were behind the violent protests in Hong Kong. “The U.S. should know one thing, that Hong Kong is China’s Hong Kong, and we do not allow any foreign interference. We advise the U.S. to withdraw their black hands,” she said.

5. On July 26, U.S. Representative Eliot L. Engel, Chairman of the House Committee on Foreign Affairs, released a statement which said that he was “deeply concerned by the reports of police brutality in response to peaceful protests in Hong Kong and by the vigilante attacks on reporters in Yuen Long MTR Station.” Engel called on the Hong Kong government to uphold the rule of law and noted that police violence had “tarnished Hong Kong’s international reputation for good governance and the fair administration of justice.”

“Moreover, Beijing’s increasingly harsh responses and propagandic depictions of ‘radical protestors’ as ungrateful troublemakers egged on by ‘foreign interference’ further sheds light on the Chinese Communist Party’s continued attempts to chip away at the freedoms and rights that make Hong Kong unique,” Engel’s statement continued.

A spokesperson of the Office of the Commissioner of China’s Foreign Ministry in the Hong Kong Special Administrative Region criticized Engel and called on “foreign politicians” to “immediately stop saying or doing anything that smears ‘one country, two systems’ and undermines Hong Kong’s prosperity and stability, and immediately stop interfering in Hong Kong affairs and China’s domestic affairs as a whole.”

6. On July 29, Secretary Mike Pompeo said during an interview that “In terms of priorities, every morning the first thing I do is read about China. So I take time and talk about all the broad array of issues that present both real opportunity for the United States and risk to America from China.” The CCP would likely interpret this to mean greater conflict with the United States.

Pompeo also called on the PRC to “do the right thing with respect to respecting the agreements that are in place with respect to Hong Kong.” In response, PRC foreign ministry spokesperson Hua Chunying blamed Pompeo for the protests. “It’s clear that Mr. Pompeo has put himself in the wrong position and still regards himself as the head of the CIA. He might think that violent activities in Hong Kong are reasonable because after all, this is the creation of the U.S.,” she said.

The CCP would likely see a connection between the developments in the U.S. and the protests in Hong Kong, even where none might exist. The notion of “foreign intervention” poses a dilemma for the communist regime. On the one hand, foreign scrutiny of PRC actions gives it pause and forces it to think twice before making further moves. On the other hand, the CCP’s survival instinct compels it to clamp down violently on whatever is threatening its rule. Historically, the CCP has tended to go with its survival instincts at crunch time.

CCP factional struggle
We previously addressed the dynamics of factional struggle between the Xi Jinping camp and the Jiang Zemin faction in Hong Kong. Based on our assessment, the Jiang faction presently stands to benefit more from seeing bloodshed in Hong Kong than the Xi camp.

From the Jiang faction’s perspective, Xi Jinping’s hands will be tied against them if he orders a violent or military suppression of the Hong Kong protests. This is because a bloody suppression will trigger an outpouring of international criticism and pressure, and Xi will be forced to preserve and unify the Party against “foreign forces.” And in the name of Party unification, Xi will almost certainly have to freeze the anti-corruption campaign to minimize internal opposition against his rule. Truces in the factional struggle, however, are only temporary. Having tied Xi’s hands over Hong Kong, the Jiang faction will next move to undermine his authority before eventually ousting him from power.

From the perspective of the Xi camp, it has few incentives to order a violent or military suppression in Hong Kong at this juncture because doing so is counterproductive to ongoing efforts to defuse external pressures and resolve internal problems on the mainland. Since the G20 meeting in late June, the Xi leadership has made moves which suggest that it is still trying to make the structural reforms required to reach a trade agreement with the United States and lower Sino-U.S. tensions. Lowering bilateral tensions and getting a trade deal will in turn allow the Xi leadership to focus on a “perfect storm” of pressing domestic problems like rescuing China’s worsening economy, resolving unemployment issues, fixing the food crisis, tackling swine flu and fall armyworm, etc. Bloodshed in Hong Kong, however, will immediately undo whatever trade negotiation progress with America and exacerbate the PRC’s domestic woes.

While the Xi camp might have few incentives to carry out a violent suppression in Hong Kong, the option is very much still on the table if Xi Jinping feels that his or the Party’s rule is imperiled by uncontrollable chaos in Hong Kong.

Get smart
1. We believe that the Trump administration is holding back in confronting the CCP with maximum pressure because the administration could be hoping that a trade deal can be reached with China. However, we strongly believe that the ship has sailed on the deal in light of the CCP’s likely interpretation of various human rights and ideology-related developments in the U.S. in July and the CCP’s tendency to “prefer left rather than right” (寧左勿右) at the crossroads.

2. Hong Kong’s watershed moment has arrived. Judging from the nearly eight weeks of continuous protest, we believe that the people of Hong Kong will very likely keep protesting until their demands are met. This sets them on a collision course with the PRC and an encounter with the PLA.

The Trump administration has two possible options: Declare America’s stance on the Hong Kong protests now or wait until after the PLA has moved in before issuing a condemnation.

The latter option sees barely any upsides and many downsides. By not criticizing the PRC over Hong Kong now, the Trump administration could possibly continue the Sino-U.S. trade talks with hopes of closing a deal. If a deal is reached, the Trump administration will have greater leeway to chastise the PRC over Hong Kong and uphold the territory’s status as an international trading hub. But if the CCP resorts to violent suppression (military or otherwise) to end the protests in Hong Kong before a trade deal is sealed, then the Trump administration will be blamed for U.S. failure to prevent another Tiananmen incident. Like after Tiananmen, the CCP will order its propaganda apparatus to run a massive coverup and disinformation campaign to shape the domestic and international discourse on its bloodshed in Hong Kong. The Hong Kong people will also unlikely step out again after a bloody suppression and the protest movement will be crushed. The U.S. and the world will definitely heap criticism on the CCP and apply sanctions, but it would be a case of too little, too late as the Communist Party consolidates its control over Hong Kong and in mainland China. To survive international sanctions, the CCP could move to partially close up China and use intense repression on the mainland to keep the masses in check; the Party has shown in history that it has no qualms about letting millions of Chinese people die in political campaigns and from famines as long as it stays in power.

The Trump administration stands to gain more than lose in officially standing up for Hong Kong before the PRC decides to end the protests with bloodshed. For one, the prospects of reaching a trade deal are currently slim to none given how the CCP would interpret recent developments in the U.S. and moves by the Trump administration. Criticizing the PRC over its behavior on Hong Kong at this stage will unlikely move the needle much in affecting the dim prospects for a trade agreement given that the CCP almost certainly presumes that the Trump administration has played the much more crucial human rights and ideology cards. A sharp U.S. criticism of the attacks in Yuen Long, threats of sanctions against specific Chinese or Hong Kong officials who advocate violent suppression, expansion of Chinese tariffs to include the Hong Kong region, and a redesignation of Hong Kong’s autonomous status in the event of a PRC suppression, will force the CCP to very carefully weigh its options before it decides to quell the protests through violent and bloody means. The CCP will likely proceed with even greater caution should other countries follow the U.S. lead in condemning the PRC on Hong Kong. Meanwhile, the Hong Kong people will be encouraged to keep protesting the Hong Kong government, and by association, the CCP. Sustained protests in Hong Kong and increased U.S. pressure will force Xi Jinping to quickly decide on whether to save the Communist Party or to save China.

3. Businesses and investors must prepare for the worst in Hong Kong and for a breakdown in Sino-U.S. trade negotiations.