SinoInsight 1
From July 11 to July 12, Hong Kong pro-democracy parties held primaries to settle on candidates for the upcoming Legislative Council (LegCo) election in September. Hundreds of thousands of people in Hong Kong voted in the primaries, which are not part of the city’s political process. Hong Kong pan-democrats organized the primaries to avoid vote splitting in September and maximize their chances of winning a “35+ seat majority” in the LegCo so that they can better stand up to the pro-Beijing pro-establishment camp.
According to Hong Kong media reports, over 600,000 votes (over 590,000 online votes and 20,000 paper ballots) were cast during the primaries as of 10:00 p.m. Hong Kong time on July 12. While not the final vote count, the over 600,000 votes far exceeded the pan-democrats’ initial objective of 170,000 total votes, and represented half the votes cast for the pan-democrat camp during the 2016 LegCo election and 35 percent of the total votes cast for pan-democrats during the 2019 Hong Kong District Council elections.
The primaries were not carried out without some drama. On the eve of the primaries, Hong Kong police with search warrants raided the office of the Hong Kong Public Opinion Research Institute, an independent polling institute that was assisting the pan-democrats with the voting on the pretext of reports that people’s personal information was being leaked. Also, former Hong Kong leader Leung Chun-ying, secretary for constitutional and mainland affairs Erick Tsang, and other pro-CCP scholars made remarks about how the primaries might violate the Hong Kong national security law. Observers viewed the remarks of pro-CCP figures and the police raid as intimidation attempts.
OUR TAKE
1. The sizable voter turnout for the Hong Kong pro-democracy primaries indicate the people of Hong Kong are undaunted by the draconian national security law. In fact, the Hong Kong people have demonstrated they can set aside individual and party interests to form a coalition to resist the authoritarian CCP.
The voter turnout is also an important bellwether for the September LegCo elections, and sends a strong signal to the world that the spirit of freedom and democracy is not crushed in Hong Kong.
2. Given the strong voter turnout for the pro-democracy primaries at the time of writing, there is a high likelihood pan-democrats will win over 35 seats in September barring CCP interference. The CCP, however, will definitely use all means to sabotage a pan-democrat victory.
Examples of possible CCP maneuvers include:
- The Hong Kong government and the CCP could bar candidates who participated in the primaries from running for elections under the new national security law.
- Pro-CCP operatives in the pan-democrat camp could engage in speech or action considered illegal under the national security law, and cause pan-democrat candidates to become ineligible for elections.
- Radical “localist” groups who did not participate in the primaries could step up criticism of both pan-democrats and the pro-establishment camp. These groups could field candidates at the last minute to split the vote.
- The CCP and the Hong Kong government could intensify arrests, investigations, and searches under the national security law in the lead up to the September election to intimidate and influence the Hong Kong people’s vote.
- If pan-democrats do find a way to gain 35 seats or more, the CCP could find all sorts of excuses to disqualify some successful candidates and force Hong Kong to hold re-elections until the CCP’s desired outcome is achieved.
3. The Hong Kong LegCo election in September will be vigilantly monitored by the international community and its outcome will be symbolic during the era of “new cold war” between the PRC and the United States. Should a second wave of infectious diseases break out in fall, however, the election could be postponed.
SinoInsight 2
After the Two Sessions in May, when PRC announced plans to impose a national security law over Hong Kong, U.S. President Donald Trump promised to take “strong” and “meaningful” action against the PRC for “absolutely smothering Hong Kong’s freedom.”
With the PRC’s Hong Kong national security law now in effect, some observers wonder whether the Trump administration is more “bark than bite” on the Hong Kong issue. While the Trump administration has begun to eliminate preferential policy exemptions for Hong Kong and imposed visa restrictions on PRC officials, President Trump has yet to sign into law the Hong Kong Autonomy Act, a piece of legislation that imposes sweeping sanctions on PRC and Hong Kong officials who undermine Hong Kong’s freedoms, as well as on banks and state entities who do business with those officials.
OUR TAKE
1. We noted in the July 9 edition of this newsletter that the Trump administration’s recent China-related actions suggest the U.S. is “preparing bold actions against the PRC.” However, we believe the administration has not yet moved against the PRC over Hong Kong, because it is still in the process of educating the American public on the “China Challenge” and finding ways to “persuade/incentivize American businesses and investors to pull their funds out from China before the hammer is inevitably dropped on the CCP.”
Since our July 9 newsletter, we have observed more moves by the Trump administration to warn Americans about potential danger of residing in the PRC, enhance relations with U.S. allies and partner nations, and cool relations with Beijing:
- July 8: A Canadian government official told Reuters that foreign ministers from the Five Eyes intelligence sharing countries held a conference call to discuss the Hong Kong situation.
- July 9: The U.S. Department of State approved a possible $620 million upgrade package for Patriot surface-to-air missiles to Taiwan.
- July 10: When asked by reporters aboard Air Force One about a “phase two” trade deal with China, President Trump said, “I don’t think about it now.” Trump also criticized the PRC’s handling of the coronavirus outbreak, saying “They could have stopped the plague, they could have stopped it, they didn’t stop it.”
- July 10: U.S. Secretary of State Mike Pompeo congratulated Singapore on holding its 13th general election, and noted that the United States and Singapore have enjoyed over 50 years of valuable partnership. “Our friendship is deeply rooted in our shared values and a common desire for peace and security in the Indo-Pacific region,” Pompeo said in a statement, and added that the U.S. looks forward to collaborating with the Singaporean government to “strengthen our economic and security cooperation.”
- July 11: The U.S. State Department issued a security alert to American citizens in China warning them the PRC could carry out “arbitrary enforcement of local laws for purposes other than maintaining law and order.” The security alert noted that American citizens could be “detained without access to U.S. consular services or information about their alleged crime,” could be “subjected to prolonged interrogations and extended detention for reasons related to ‘state security,’” and could be detained or deported for “sending private electronic messages critical of the PRC government.”
- July 12: White House economic advisor Peter Navarro said in an interview on Fox Business that President Trump will sign the Hong Kong Autonomy “early this week” and an executive order “to complete the process” that Trump started on May 29 in the Rose Garden. “We cannot let the Chinese Communist Party use Hong Kong any more to attack the American economy,” Navarro said.
We believe the Trump administration will next look to:
- Continue educating the U.S. public on the CCP threat to justify all-out “strategic competition”/“cold war” against the PRC.
- Punish the CCP and its allies (Iran, etc.) over other issues first as a prelude, before enacting stronger sanctions over Hong Kong.
- Punish some American companies who support or work with the CCP in perpetuating human rights abuses in Xinjiang, both to caution other companies and get them to toe the line once stronger Hong Kong sanctions are implemented.
2. It is possible the Trump administration has been holding off on moving against the PRC over Hong Kong too quickly, due to complications posed by the Hong Kong national security law and domestic backlash. Banks in Hong Kong will be caught between the proverbial rock and a hard place once Trump signs the Hong Kong Autonomy Act, due to Article 29 of the Hong Kong national security law, which finds any individuals or institutions guilty of “colluding” with a foreign country to “endanger national security” should they carry out certain actions, including “imposing sanctions or blockade” against the Hong Kong government or the PRC. Caught in the crossfire, American banks in particular will be more inclined to challenge the Trump administration over its sanctions rather than the CCP regime given the nature of the respective political systems in the U.S. and China. The Trump administration will need to find solutions to this dilemma, if it has not already.
3. The Trump administration may be preparing to take action against the PRC over Hong Kong, but it does not have the luxury of time. The global impact of the Hong Kong national security law means that America’s allies, Western businesses, and U.S. technology and social media companies will be closely watching the administration’s response over Hong Kong, before deciding to support either China or the United States in the Sino-U.S. “new cold war.” Slow and/or weak reaction from the Trump administration will merely embolden the CCP to take stronger action in Hong Kong and elsewhere in furthering its domination agenda, and weaken the U.S.’s hand in confronting the PRC over Hong Kong and other issues.
4. Businesses, investors, and governments must filter out CCP propaganda and disinformation before deciding where they stand in the “new cold war” to minimize risks and seize opportunities.
