Police detain a protester in Wan Chai, Hong Kong, on May 24, 2020. Photo: AFP

China’s May 21 announcement on the imposition of a national-security law in Hong Kong targeting dissent delivers a serious blow to the “one country, two systems” protocol negotiated by Beijing and London in the 1980s. The edict from Beijing will have several repercussions to personal liberties of the Hong Kong people and will elicit a strong response from Washington.

China’s stated goals for the new law – combating secession, terrorism, foreign interference and sedition – have understandably alarmed Hong Kong’s people and the United States, both of whom fear a further constricting of freedoms in the former British colony.

This development is the latest piece in the increasingly complex mosaic of US-China ties as both countries grapple over competing geopolitical objectives while they work to both keep the Phase 1 trade deal intact and blame each other for Covid-19’s origins and spread.

There are various ways in which the US and democratic states can react to China’s implementation of the national-security legislation. The type of response will in part depend on efforts by Washington to strike a balance between holding Beijing accountable for its suppressive policies and not doing harm to the interests of the Hong Kong people.

In making its decision, Washington will also need to take into account the reasons behind Beijing’s recent decision to push through the security legislation.  

Chinese President Xi Jinping is in a bind. He has been criticized domestically and abroad  for his handling of the coronavirus outbreak, coverup and resulting economic downturn. Xi’s unrivaled power in the Chinese political system – he has assumed more positions of authority than anyone except Mao Zedong since coming to power in 2012 – has given him virtually free rein in the country’s affairs yet has put him at risk of taking all the blame for the Covid-19 pandemic and its after-effects.  

Put simply, the new security law serves two ends. First, it provides a diversion from the crises facing Xi, helping to distract at a time of increasing scrutiny of his handling of both the virus and China’s sharp economic contraction.

Second, it equips Beijing with expanded tools to clamp down on opposition to the Communist Party of China (CPC) through increased censorship, surveillance and arbitrary detentions, allowing the Ministry of National Security to operate openly and efficiently in Hong Kong as it does in other mainland Chinese locales.

Xi’s calculus is that strong measures during the pandemic will suppress a worsening situation with protesters. Such an action would help Beijing reverse its humiliating botched attempt last year to have the Hong Kong Legislative Council pass rendition legislation that would allow for the extradition of people from the city to mainland China’s criminal justice system. A failure to do so now would raise chances of democratic candidates winning in the September Legislative Council election.

The timing of the decision to push ahead with this directive is advantageous to Beijing as it takes place amid limited pushback while the world community is preoccupied with domestic public health measures to combat the Covid-19 pandemic.

Taking these factors into account, the US is faced with the challenge of punishing Beijing for its new coercive measures while not penalizing Hong Kong’s predominately pro-Western citizens. Alternatively, President Donald Trump’s administration may forgo punitive measures against China and opt to mount a series of stern public criticisms.

While the Trump administration’s options are limited, it will likely elect to declare that Hong Kong is insufficiently autonomous as part of its yearly report to Congress on the special administrative region’s freedom as mandated by the Hong Kong Human Rights and Democracy Act.

While the new security law will be the justification for this declaration by the US administration, Trump can also point to the fact that the people of Hong Kong are unable to choose their own chief executive, are limited to electing only some of their representatives, are forbidden from running for public office if they are accused of supporting independence, and are at risk of penalties if they are found to have made public statements that go against the CPC line.

Washington’s probable declaration of Hong Kong being insufficiently autonomous will likely result in the Trump administration imposing sanctions against mainland Chinese and Hong Kong officials in addition to banks and police units complicit in violating the “one country, two systems” agreement.   

Additional targeted sanctions will be levied if opposition candidates are suppressed in the lead-up to September’s Legislative Council elections or if violence is used to crack down on democracy activists who will continue to take to the streets.

Yet Washington would be well advised not to revoke the special status and trading privileges granted to Hong Kong under US law that provide exemptions from tariffs applied to mainland Chinese exports to the United States. Doing away with the special privileges would harm the yearly US$67 billion in annual US-Hong Kong trade as well as the very people who Washington is seeking to support – the people of Hong Kong.

Other possible responses by Washington are boycotting the 2022 Beijing Winter Olympics, leading a campaign to oppose China’s expected candidacy at the next UN Human Rights Council election, and working with the Group of Seven to denounce China’s latest actions.

While Hong Kong remains a law-abiding, highly educated and affluent society, China continues to impose limits to the freedoms of its people. While the reactions by Washington and its democratic partners over the new security law will be somewhat muted during the current coronavirus pandemic, there will be political and increasingly economic penalties for Beijing’s actions. Taking into account the limited scope of the costs, however, this is unlikely to deter Xi’s long-term crackdown on the territory.