Economic Statecraft
One Country, But How Many Systems? Changing Beijing’s Hong Kong Policy

Over the past three years, in light of the announcement by the Americans that China is a “revisionist state” and a “strategic competitor”, Beijing no longer hopes for a full-fledged restoration of dialogue with the Western countries, and therefore no longer stands on ceremony with the “democratic forces” and special Hong Kong autonomy, Valdai Club expert Andrey Gubin writes.

On July 1, 2022, Chinese President Xi Jinping visited the Hong Kong Special Administrative Region (HKSAR) for the first time in five years to celebrate the 25th anniversary of the transfer of the former British colony to China. The head of state spoke in favour of the "one country - two systems" (一国两制) policy, which provides for the preservation of the political and economic autonomy of Hong Kong until 2047, according to the Joint Sino-British Declaration on the Transfer of Hong Kong, signed in 1984. At the same time, the nature of Beijing's policy towards the special region testifies to the intention of the leadership of the Communist Party to significantly reduce the degree of independence of the territory in the interests of national security. In fact, to strengthen stability, the last outpost of Western influence is being liquidated, especially since the HKSAR is no longer valuable as a financial centre or as a source of advanced technology.

Fragrant and safe

In July 2020, on the 23rd anniversary of the handover of Hong Kong, a Law came into force [on the protection of national security in the Hong Kong Special Administrative Region. (香港) The document was intended to strengthen the stability of the PRC's political system by significantly limiting autonomy and eliminating channels of Western influence.
The law provides for punishment for calls for secession, an overthrow of the government, terrorism, as well as for any actions taken to achieve these ends, including interaction with foreign states and any external forces. For the most serious violations, life imprisonment is provided, and one of the lightest penalties is three years of prison. The document provides ample opportunities to control the media, as well as to influence Chinese citizens abroad.
Changes for the special district include a reduction in the number of elected members to the local Legislative Council and a mandate that all candidates support the CCP. Patriotism lessons have been introduced in educational institutions, and all teachers and administrative workers are subject to selection for loyalty to the authorities. Also, a Special Bureau for Hong Kong was established to analyse the security situation and collect intelligence information, as well as a National Security Committee, administered directly by Beijing. The PRC government also gained direct jurisdiction over "complex cases" of offenses, including support from abroad. In addition, a practice of closed trials has appeared; censorship in the media and control over the work of foreign NGOs has been tightened. The acts of terrorism include the disruption of public transport and damage to transport infrastructure, attacks on government and other administrative institutions, calls for foreign countries to impose sanctions against the PRC, and deliberate incitement of hostility towards the central Chinese authorities.

No more ‘Occupy’ 

Over the past 20 years, Beijing has made attempts to bring the sources of law in Hong Kong in line with general Chinese policy, gradually rendering the legacy of Her Majesty obsolete. However, each time, these ‘modernisation’ initiatives stumbled upon the rejection of the democratic public and mass protests among the Hongkongers - supporters of broad autonomy (or even independence) and their own identity. The inhabitants of Hong Kong adamantly refused to have their level of rights and freedoms reduced to that of their continental compatriots; they considered themselves clearly better than mainland China’s provincial population. A series of civil disobedience activity in 2014, Occupy Central with Love and Peace, was called the “umbrella revolution” in the Western media.

Work was significantly accelerated after mass protests in 2019, when former chief executive Carrie Lam proposed passing a law on extradition from the HKSAR to the PRC mainland. The precedent involved the egregious case of the murder of a pregnant girlfriend by a Hong Kong resident in Taiwan, but it seemed to the activists that all their liberal ideals were about to be irreversibly trampled underfoot. Due to mass protests, the extradition project had to be withdrawn. There was a threat that the pro-democracy forces would take the majority in the local elections in September 2020.

However, this did not happen, as a new Security Law came into force in July, and several hundred people were detained by the authorities before the end of the year, including opposition leaders, businessmen, journalists, youth activists and popular performers. Due to the coronavirus pandemic, elections to the Legislative Council took place only in December 2021. By this time, the united democratic forces in Hong Kong had practically ceased to exist, and the level of public support for them did not exceed 30%. The message of the CCP leadership was unequivocal - Hong Kong must remain in the hands of true patriots, and there can be no ideology, identity and power other than communist one.

Queuing for the sun

Western analysts suggest that a significant tightening of control in Hong Kong calls into question the existence of the “one country, two systems” formula. The object of criticism was the fact that the Security Law was adopted without prior public discussion and a referendum among all the inhabitants of the autonomous region. The United States, Great Britain and the EU accused Beijing of violating agreements on the existence of an independent economic and political system in the special area until 2047 and imposed sanctions on some Chinese government officials. London, Ottawa and Canberra expanded residence permit possibilities to all wishing to leave Hong Kong; the American authorities also offered "temporary asylum". In addition, a number of countries have suspended extradition agreements for fear of transferring convicts to China.

It’s most likely that Xi Jinping decided not to wait until 2047, and to interpret the agreements reached during the Cold War in the spirit of “Chinese specifics”. The main reason was the growing number of “colour revolutions” around the world, characterised by the large-scale use of violence by the armed opposition against government officials and the population, controlled from abroad. During the trade war launched by Washington against Beijing, it turned out that the Chinese economy has a significant margin of safety, and the restrictions on technological exchanges are no longer insurmountable, which prompted the West to look for other methods to influence China.

Over the past three years, in light of the announcement by the Americans that China is a “revisionist state” and a “strategic competitor”, Beijing no longer hopes for a full-fledged restoration of dialogue with the Western countries, and therefore no longer stands on ceremony with the “democratic forces” and special Hong Kong autonomy. Economic independence has also been significantly limited, first by the coronavirus pandemic, then by sanctions from the US, Japanese and EU amid worsening relations with Taiwan. As a result, Hong Kong is going from being a global financial centre to being one of many "points of growth" which the Chinese economy has fostered by promoting the development of the regions, as well as the Belt and Road initiative. As the Greater Bay Project progresses  (Guangdong - Hong Kong - Macau), the uniqueness of the former British colony will inevitably dissolve into a greater Chinese identity.


In light of the upcoming Communist Party Congress in the fall of 2022, we should expect the adoption of a number of additional regulatory and organisational measures in the field of strengthening the country's internal security and completely eliminating opportunities for China's opponents to undermine the political system of the state. Thus, it is no longer necessary to say that a system different from the Chinese one will exist in Hong Kong until 2047. Rather, the symbolic features of autonomy and local flavour will be preserved, but they do not have a real impact on the economic processes and political life of the special region. Xi Jinping's statement, that “after the wind and rain, Hong Kong has risen from the ashes,” should be interpreted as a recognition of its final return to the motherland, when the Communist Party will establish the exact degree of freedom.
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