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Why now? China, Hong Kong, and Trump


Lost in the escalating crisis in Hong Kong is the simple question of, ‘why now?’ Why did President Xi Jinping choose, in the middle of sensitive trade talks with the United States, to provoke a crisis in Hong Kong over a proposed extradition law. The answer is simple: to make trade negotiations more complicated, to put President Donald Trump in a seemingly no-win situation, and to demonstrate to Hong Kong, Taiwan and surrounding areas who is master of Asia. Understanding this is paramount.

China has long been at economic war with the United States. Since the start of Trump’s presidency and his ‘America First’ foreign policy, Beijing has been engaged in political warfare as well, eager to persuade Wall Street and other financial interests that getting tough on trade will be bad for the United States and the global economy. President Trump has backed his tough rhetoric with tariffs and sanctions.

The current controversy arose from a proposed law enabling the PRC to extradite Hong Kong’s citizens back to the Mainland. Few in Hong Kong are under the illusion that the PRC’s Ministry of State Security would not do this, even without a law, to anyone who it deemed enemies of the state. The PRC is, after all, a totalitarian communist dictatorship. The purpose of proposing the law was therefore purely political: to signal to the people of Hong Kong that the time had come to make a choice — willingly submit to their masters in Beijing or face devastating consequences.

That the freedom-loving people of Hong Kong should protest was to be expected. They were promised autonomous rule until 2047, as a Special Administrative Region, under China’s treaty with Great Britain. Generations of citizens have spent their entire lives in a bastion of economic freedom with relatively open political discourse. They were not going to take this law lying down, and the PRC knew this.

It is therefore instructive that President Xi chose this moment to assert the PRC’s power over Hong Kong and create today’s public spectacle of violence and unrest. It is said, after all, that the Chinese economy is weak, perhaps even in desperate straits. But Secretary Steven Mnuchin and Trade Representative Robert Lighthizer were shown the door recently in Shanghai rather than advance negotiations. Because of this, China will suffer the effects of new tariffs, exacerbating an already slowing economy. This would suggest that the PRC economy is not so weak and that they are willing to endure whatever short-term pain this causes to prove a point: They are in charge of their own destiny. And, to state the obvious, a downturn in the global economy would hurt Xi less than it would President Trump — who is running for reelection.

Indeed, Xi and the Chinese Communist Party will always put the well-being of the CCP first. Chairman Mao believed that everything was subordinate to the Party and the Central Committee that runs it, and Xi believes himself both the intellectual and political heir to Mao. What matters most to his radical cadre is preserving the supremacy of their totalitarian Communist dictatorship and its principles. That is, to their way of thinking, the essential component of governing 1.4 billion people. These stakes mean that no evil, no excess and no abuse of power can be too great if they secure the regime.

But Xi’s heavy handedness in Hong Kong makes more sense if his target is really Trump. Like no president before him, he has stood up against the PRC. And Xi and the CCP were not expecting his steadfast refusal to accept a trade deal absent an enforcement regime that ensured the PRC would not continue their multi-trillion-dollar theft and forced technology transfer of American intellectual property. President Trump has staked a large part of his presidency not only on righting this wrong but on making better trade deals across the board. This is not lost on the Chinese Communist Party.

It seems clear that by provoking a crisis in Hong Kong, it is the hope of Xi and the CCP to trap Trump in a complex situation he does not control and give political fodder to the Democrats running for president. The large-scale human rights abuses that may yet occur will test the president and his administration and make trade and tech deals more difficult.

Beijing intends to demonstrate to the American people that President Trump’s ‘America First’ foreign policy comes with a cost: It is dangerous and risks real superpower conflict, not to mention economic crisis. And if the Chinese use of force also intimidates the people of Hong Kong and sends a similar message to the free people of Taiwan, so much the better.

President Trump is quite right to say Xi is simply waiting out his presidency. In reality, any trade deal that includes an enforcement regime to stop the theft of intellectual property will require a fundamental change to China's economic system that is, at one level, inconceivable. If Trump is able to get that concession it will be an unparalleled masterstroke. But for President Xi, whose economic team denies that the theft of intellectual property even occurs, it is far preferable to wait for a Democrat — or nearly any other future Republican president — in order to continue to exploit the United States.

Yet the Chinese have exposed themselves to great risk with this dangerous game. Once the People’s Liberation Army rolls in, the lie is over that Hong Kong ought to be treated separately from the Mainland, as it is today under the United States-Hong Kong Policy Act of 1992. Today, Hong Kong enjoys the equivalent of Most Favored Nation status and is treated different than the PRC, especially as we enter this new round of tariffs and restrictions on Chinese industries. Revisions to the Hong Kong Policy Act should not be made lightly; they would deal a blow to Hong Kong no less than the PRC. But if the people of Hong Kong are to suffer the loss of their freedom, so too will the PRC suffer the loss of their financial crown jewel that is Hong Kong.

Such bold action by the PRC suggests they are willing to suffer this fate — the continued imposition of tariffs, a decoupling of the US and Chinese economies, and a profound estrangement from the world’s largest consumer market. For all the systemic problems associated with their state-run mercantilist economy, they believe they can weather the storm come what may.

This is a lesson that ought not to be lost on the West. Certainly, it will not be lost on the president that Xi is creating this crisis in order to hurt his re-election. Xi is doing this because Trump is the one man who has stood up to the Chinese in the last half century. Let us hope the American people are themselves resilient enough to understand this and all that is at stake.

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