Hong Kong is not China Yet? How China transforms Hong Kong to be a National Security State

Illustration: Tijeerd Royaards

Introduction

After the National People Congress (NPC)announced the decision to impose the draconian and extensive National Security Law (NSL) in Hong Kong on May 22, 2020, Hong Kong's transformation toward a national security state accelerated. The "One Country Two Systems" that came to be effective after the British handing over the ruling to China on July 1, 1997, was vanished. Although the People's Republic of China (PRC) promised, in the 1984 Sino-British Joint Declaration and in the initial years after the transition, to maintain the economic and social norms and preserve the rights of people and civil society for half a century since 1997, many have raised doubts toward Beijing's commitment. With the legislation of NSL in Hong Kong, the doubts have been justified.

As pointed out by TaiMing Cheung, one of Xi Jinping rule's iconic characteristics is his relentless effort in turning China into a national security fortress[1]. Among the efforts of Xi has in transforming China into a national security state, the enforcement of NSL in Hong Kong amid the critical junction of China's relations with the West should be seen as one of the pivotal decisions, along with building artificial islands in the contentious water in the South China Sea, and the massive imprisonment of Uighurs in Xinjiang. By breaching an international commitment, Beijing's credibility has been severely diminished. PRC risks alienating potential neutral actors in Europe and providing a pretext to London and Washington in confronting China. However, in Beijing's calculation, China and Xi may suffer a short-term pushback for scrapping the One Country Two System, such as economic sanctions on major officials and banning Huawei from the British 5G construction, Beijing will reap a considerable long-term benefit for domestic economic and financial stability and establishing a Hong Kong that controlled by the party. The Chinese Communist Party also calls this the "Second Reunification." The combination of domestic stability and party resilience motivates Xi to transform Hong Kong from a global financial centre to a national security state.

Given the consequential cost and benefit of NSL and the special status of Hong Kong, it is doubtful that the leadership of CCP implements the law recklessly. Although the closeness and opaqueness of the CCP decision-making process undermine the ability to understand the drivers of the legislation comprehensively, this paper attempts to shed light on this puzzle. To be more specific, this article will investigate the following questions:

1. Why did China start the critical turn to establish a national security state in Hong Kong in 2019?

2. What were the motivations behind the building of the national security state?

3. What means did the Chinese government use to the establishment?

4. How Hong Kong's national security state poses a threat to other countries?

The article first introduces what a national security state is and how does it apply to mainland China. While some scholars have discussed the definition and characteristics of the concept, China is proved to be a special case. Then the realist's calculation of Beijing in embracing the law will be examined. After examining the calculations, the article suggests the motivations and means in building up the national security state, which is not being used in mainland China. Finally, the article discusses the danger posed to liberal democracies.

What is National Security State in China?

The garrison state, the predecessor of the national security state concept, was first coined by Harold Lasswell in the 1930s. The concept was used to describe the Japanese’s Militarism and Germany’s Fascism, in which Lasswell argues, military specialists would eventually take over the control of the state[2]. Subsequently, the literature of International Relations put forward the concept under the realism framework. Along the defensive and offensive realism spectrum, the national security state can be characterized as a state with an offensive mindset and defensive-oriented behavior.

After Xi Jinping took over the power in 2012, China’s national security orientation shifted from a defensive mindset towards a combination of offensive and defensive gestures. In the communique of the Third Plenum of the Eighteenth Party Congress, the critical elements of the new national security order were stipulated. Later, the Central National Security Commission and Overall National Security Outlook (ONSC) was unveiled to the public in April 2014. After a sweeping anti-corruption crackdown, political discipline crusade, and reforming civil and military apparatus, Xi successfully established a centralized national security command structure armed by new laws and privacy and information flow regulations.

The central command organization is the Chinese National Security Committee (CNSC), in which Xi is the chairman. It is the “nerve centre of decision-making and coordination on national security affairs[3].” With the establishment of CNSC, several security legislations have been passed and provide legal bases for national security-related actions, such as the Counter-Espionage Law (2014), National Security Law (2015), Counter-Terrorism Law (2015), Cybersecurity Law (2016), and the Intelligence Law (2017)

The National Security Turn of Hong Kong Under Xi Jinping

Beijing imposed a series of iron-fisted moves before the National Security Law legislation, which was seen suddenly by international observers then. However, those actions were the calculated campaign under the name of "Second Reunification of Hong Kong". The first reunification in which used a lenient soft-power approach has now failed. While Beijing initiated the "Second Reunification" campaign after the 2019 protests, it was not the critical turn of Hong Kong from a semi-autonomous region to a national security region. The shift is a graduate and subtle process.

On the twentieth anniversary of Hong Kong's handover, Xi stipulated that the "bottom line" for the One Country Two Systems should not be touched. Alongside the "bottom line" speech, Xi also laid down the extremity of Beijing's tolerance. He renounced all activities that "endanger national sovereignty and security, challenge the authority of the central government and the authority of the Basic Law of the Special Administrative Region, and use Hong Kong to engage in infiltration and sabotage in the mainland[4]." However, in 2017, only a few understood the character of the "bottom line," until it emerged extensively on media in 2019. The democratic protests which aimed to repulse the extradition treaty between Hong Kong and the mainland, was framed as "touching the bottom line[5]." As a strongman, the protest pushed Xi into a corner. Since the "bottom line" was set personally and publicly by Xi, the central government had to respond firmly with forceful actions.

However, tracing National Security Law's establishment back to a speech made by Xi two years before the 2019 protests would suggest that the CCP suffers from path-dependence in the decision-making process. Although it is in accord with the nature of CCP in defining an event's political nature, it excludes other factors. Therefore, more factors must take into the analysis.

The global pandemic created a window of Beijing's opportunity to speed up its stringent control over Hong Kong. The coronavirus pandemic devastated the economy of the West. Unlike the West, in the mid-2020, China was experiencing a gradual recovery. Instead of decoupling from China, Beijing thought its early recovered economy would attract capital from the West, which was evident in the surging capital influx[6]. This calculation encouraged Beijing to undertake a brinkmanship strategy. As long as the West did not act as they condemned, Beijing would continue pushing its agenda. Although anti-China sentiment grew worldwide, Beijing believed that the chamber of commerce in Hong Kong prioritised business interests over political orientation. Profits could also induce foreign businesses to galvanise their lobby force in home countries to act in Beijing's favour.

Apart from the window of opportunity created by the pandemic, Beijing also saw U.S domestic politics as a favourable indicator. Although U.S politicians across the political spectrum were treating China as the primary enemy, at least vocally, Beijing assumes their ultimate goal was the November election then. As a result, politicians in Washington would avoid any actual anti-China policies that may harm the interests of their constituencies while ramping up the rhetoric towards China. As such, policies that posed actual harm to China, such as denying Hong Kong's status as a separate customs territory and the sanctioning U.S listed Chinese companies, would not promulgate.

Besides the external environment, Hong Kong's politics also forced Beijing to accelerate the "Second Reunification" process. The Legislative Council has been a significant barricade to Beijing's firmly control over the city, as evidenced in 2003 when Article 23 was first introduced, granting the power of national security oversight to Beijing, and in 2019 with widespread protests. In both incidents, the pro-establishment legislators departed from Beijing's guidance and the party line in the face of public anger. With the September legislative election approached (it was later postponed for one year), and as shown by the landslide victory for the democratic camps in the District Council election in March 2019, the last thing Beijing wanted to see was the legislative election turned into a de facto referendum on a particular issue, the anti-extradition bill movement[7]. To restrict Hong Kong's opposition camps to use their public mandate and international connections to acquire attention from the West, Beijing had to impose draconian law, which poses a threat to "colluding with foreign actors".

In addition to the necessity to avoid the unwanted outcome, Beijing's long-term "divide and conquer" strategy is paying off. On the one hand, within the democratic camp, although the moderate faction within the camp did not stand-alone Beijing's hardline ruling in Hong Kong, they were different from the militant faction. The militant camp advocated the "mutual destruction", which aimed to endanger Hong Kong's special trading status, the cornerstone of the financial centre, as the bargaining chips to compel CCP to revert its hardline rule over the city[8]. As the U.S announced once, it is actively reconsidered Hong Kong's special trade status[9]. The mutual destruction was becoming a real threat. Beijing hoped the moderates would side with the establishment in fear of risking their financial assets. On the other hand, moderates in the pro-democracy camp tried to maintain political momentum without resorting to radical means. However, marches with one million or two million participants would not be an option. The rapid spread of COVID-19 allowed the Hong Kong government to abuse the pandemic threat and imposed stringent social distancing measures to oppress protests[10]. In the absence of a viable way to demonstrate political momentum, some factions in the pan-democratic camp would radicalise. In Beijing's script, the radicalised protests would be in agreement with its propaganda that the protests were organised by separatism and terrorism, which offered an ideal pretext for its draconian method, implementation of national security law. This is also a manifestation of "Struggle", as General Sun Jianguo advocates[11]. Derives from Chairman Mao's "Theory of contradiction", Beijing aimed "the more chaotic the scene, the better.[12]"

Relentless suppression in Hong Kong serves the propaganda which aims to divert China's domestic attention. The issues of Hong Kong are seldom only impacted Hong Kong. It is also the case in Beijing. Although China's economy rapidly recovered in the wake of the global pandemic, it suffered a substantial blow as domestic investment and consumption was disrupted[13]. Beijing urgently needs an excuse to divert unwanted domestic attention from the economic downturn. Nationalism is a frequently used instrument in Beijing's toolbox. By framing the protests in Hong Kong as a national security issue, as the suppress of protests were a battle against a foreign power in interfering with the "Reunification of Hong Kong", accord with the nationalist narrative. As Yang Guang, the Hong Kong and Macau Office spokesperson, criticised the protests as "serving as the pawn of external forces" and the "anti-China and destabilising Hong Kong forces.[14]" Moreover, the lowest self-identity with Chinese among the Hong Kong youth and pictures of pro-democratic leaders and consulates of the U.S further justify the need for imposing a stringent law[15].

The Motivation of Building National Security State in Hong Kong

Although the National Security Law legislation is a product of short-term threats and opportunities, they represent Beijing’s long-term strategic judgment. As pointed out by TaiMing Cheung, CCP faces “Three Unprecedented”[16]. The three dangers correspond to CCP’s three official core national interests, sovereignty, development and security.

The first danger concerns China’s sovereignty, which aims to preclude “invasion, subversion and splittism”. A Xinhua commentary was published on the 21st of May. The anonymous author vowed that “Hong Kong is part of Chinese territory since ancient times, and it is inked in the Basic Law. However, the ghost of splittism has been haunting Hong Kong since World War II. Recently, splittists disguise the idea of ‘Hong Kong Independence’ as ‘Self-determination’ and ‘Liberate Hong Kong’. In fact, they aim to sabotage national sovereignty and unity and territorial integrity.[17]” Half a month later, another commentary was published on People’s Daily, claims that “the One Country Two Systems imposed in Hong Kong since the hand over is applauded by every country. However, the splittist in Hong Kong advocates Hong Kong Independence. We should let those splittists understand. The central government will not tolerate any challenge toward China’s sovereignty[18].”

The second danger concerns the "undermining of reform, development and stability." Since China started the Reform and Opening, Hong Kong played a crucial role as a financial buffer between the mainland and the outside world. On one side of the coin, Hong Kong channels Chinese capital to the world. On the other side of the coin, Hong Kong also attracts global investment into China. Through this gateway, China reduces the threat of excessive capital inflow and outflow, which would destabilize the Chinese financial system and the economy. In addition to being a gateway, Hong Kong also provides a sustainable supply of U.S dollar to China. Despite China's rapid economic growth, its exchange reserve is running low. However, the demand for funding increases due to the increasing investment for the Belt and Road Initiative, US-China trade war and securing China's global supply chain.

Under the immense demand, Hong Kong becomes more critical in China's economic development and reform process. Hong Kong dollar is pegged with the U.S dollar under the linked exchange rate system. Local banks issue Hong Kong dollars, and it enjoy nonrestricted exchange for U.S dollars, which bolsters Hong Kong dollars credibility and reliability. Benefited from the stable exchange rate system, China can acquire foreign exchange in Hong Kong in two ways. The first method is to list Chinese companies on the Hong Kong Stock Exchange. The second way is to raise debts. The first function is more valuable than ever, as the U.S is restricting Chinese firms which connect to the Chinese military to list in America. As a result, many U.S listed Chinese firms, such as Alibaba, Wangyi, and Jindong, engaged their "Secondary IPO" in Hong Kong[19]. Many more Chinese firms, such as Bilibili, Baidu and Pinduodu, are preparing to go public in Hong Kong[20].

Since China relies heavily on Hong Kong's linked exchange rate system, it will not tolerate any threat that jeopardizes the system's stability. To counter the "mutual destruction" proposal from the militant fraction and protect "Secondary IPO" Chinese firms which may raise over trillion dollars' worth of capital, despite the abundant foreign reserve in Hong Kong, the People's Bank of China still injected $100 billion U.S dollars to the Hong Kong’s banking system, in order to stabilize the exchange rate[21].

Another crucial element in Chinese reform is internationalizing the Renminbi (RMB). In order to minimize the dependence on the U.S dollar or potentially challenge the U.S dollar's world dominance, RMB needs to be an international currency. However, methods like liberalizing RMB exchange in Shanghai and Shenzhen would likely devalue the "onshore RMB", leading to increased interest rate and poses pressure to the already enfeebled housing market. As a result, the housing market bubble may spill over to the societal realm and induce social instability, which is the first-order priority of the CCP.

Hong Kong serves as a viable solution for this conundrum. China can liberalize the "offshore RMB" in Hong Kong. Given the restriction on the onshore and offshore RMB exchange rate, the potential destruction would not diffuse to the mainland's economy. In short, the critical role of Hong Kong in the reform process force Beijing to impose total control over the city.

The third and the most important concept is "the interruption of China's socialist system", as it is tightly associated with the ruling power of the CCP. As TaiMing Chueng points out, this view is deeply held by CCP leadership that the West is relentlessly attempting regime change in China[22]. The 2019 Hong Kong protests have reinforced this. On August 25, an anonymous commentary published by the Xinhua News Agency warned that the "protests activities were no ordinary demonstrations, but a 'colour' revolution" and this "will not be tolerated.[23]" Four days later, another Xinhua commentary even accused "the rioters are pointing their spears directly to the central government.[24]"

Facing the fierce competition led by the U.S and the transitory window of opportunity, China needs to control available resources to meet the challenges firmly. An old Chinese saying, pacifying the internal before resolving external conflict", precisely describe Beijing's strategic thinking on the Hong Kong issue. The building of the national security state in Hong Kong represents China adopts a more offensive-oriented posture to gain a firm control.

What means for forging the national security state in Hong Kong

The total suppression of Hong Kong’s civil society by enforcing national security law signals that China adopts a more assertive and offensive gesture. Admiral Sun Jianguo, the vice-chairman of the People’s Liberation Army General Staff, declared that China needs to “struggle” (斗争), to secure the vital interest[25]. However, the national security law is just part of the script of struggle. “Struggle” is never a single action but a continuous process, as admitted by Admiral Sun Jianguo, “without struggle, it will be impossible to have today’s favourable situation[26].” In fact, the essence of “struggle” is Chairman Mao’s “theory of contradiction”. That means the method of establishing a national security state follows the script of “a soft hand” and “a firm hand”. Gradually and subtly, if Beijing’s realist approach encounters few oppositions, the national security state is, therefore, established. It can also be seen as a victorious story of the “Second Reunification” for China’s propaganda.

The first “firm hand” policy is to increase the economic costs to the pro-democratic camp, both moderate and militant. Occupations that require professional certificates or license, such as teachers, social workers, accountants, lawyer, doctors, nurses, will increasingly adopt vetting as a political gatekeeper. Occupations that do not require vetting may adopt vow as the political gatekeep. For example, civil servants must take the new oath that justifies their patriotic qualification and pledge allegiance to the city and the Basic Law. Those who refuse to take the oath, as the Secretary for the Civil Service Patrick Nip Tak-Kuen points out, will face dismissal[27].

The second “firm hand” policy is to weaponize the courts. The national security law legislation allows Beijing to punish dissidents on the charges of “subversion, secession, terrorism and colluding with foreign forces”. Although the law might not lead to the mass accusation as Beijing has argued, it would initially apply to high-profile individuals to set stern examples. However, after the national security law came into effect, the rule of law, an advantage which Hong Kong used to proud of, has been detrimentally abused. Even though only 100 people are charged using the national security law, more people are accused of violating the customary law, which implies that anyone is easily subjectable to the accusation, criminalization, and imputation[28]. For example, the former Next Digital Ltd. Executive Director, a senior manager in a well-known pro-democratic media, was detained on fraud allegations[29]. Choy Yuk Ling, a producer of a TV documentary about the 2019 Yuen Long mob attacks, was arrested in violation of the use of car license plate record [30].

One prominent “firm hand” policy is by using sharp power. A concept promoted by Christopher Walker and Jessica Ludwig, “sharp power”, describes authoritarian regimes’ influence exerted through the optic of soft power[31]. In the 2019 Hoover Institution report edited by Larry Diamond and Orville Scheel, it is a way to seek “culture and information influence[32].” The influence is conducted through various methods that are concisely summarized by the former Australian prime minister Malcolm Trunbull as “covert, coercive and corrupting[33]”.

Before China’s sharp power breaks into the West, Hong Kong was one of the main test sites for sharp power. The entertaining industry used to distance from political repercussions. Entertainers could join the June Forth Memorial Vigil in Victoria Park without political burdens. After the rise of the co-production trend between the mainland and Hong Kong, entertainers have to publicly align with the party line to secure employment. Any ambivalent comments on social media would be categorized as “supporting Hong Kong independence”, “traitors”, and “unpatriotic”. The influence is not constrained in the entertaining industry. The Hong Kong-based airline Cathay Pacific was under pressure from Beijing to dismiss its employer if they “support or participate in illegal protests[34]”

However, if the general public dissociates themselves from political activities, they would not feel the law affect them at all, and the property and stock prices would not decline, which is precisely what is happening now. This is the “soft hand policy”. As powered by Chinese investors who led by the state-owned enterprises, the stock market has risen to twenty-month high[35]. IPOs in Hong Kong have attracted substantial capital[36]. Property price remains stable, despite the continuous emigration trend. The life of the ordinary people seems to return to what Beijing has promised, “normal”. Only the high-profile pro-democratic activists are arrested and charged the infringement of national security law, such as the Media tycoon Jimmy Lai, a prominent activist Joshua Wong and over 50 pro-democratic former lawmakers[37].

In short, Beijing establishes national security through “struggle”. After defining the primary enemy, the pro-democratic camp, and the secondary enemy, which are the pro-establishment, Beijing tries to ally with the secondary enemy by promising benefits and struggling with the primary enemy. Through “firm hand policies” and a “soft hand policies”, Beijing can divide and conquer pan-democratic forces. Until then, the city loses its political bargaining power. Pro-establishment will become the primary enemy. At that time, the new Chinese-backed interest groups will take over the interest of old Hong Kong vested interest holder and only give them a minority stake.

The national security law offers Hong Kong government and Beijing unassailable legal authority to exercise their unconstrainted power within their borders and overseas.

How a national security state of Hong Kong poses threat to other countries?

The legislation of Hong Kong’s national security law is a signal of accelerating building a national security state. However, this paper argues that Beijing establishes a national security state in Hong Kong rather than assimilate Hong Kong into China’s national security state. In other words, Beijing is not aiming to transform Hong Kong into another city in China. Whereas Beijing may consider Hong Kong as an “experiment site”, which targets another strategic object----Taiwan. Hong Kong provides a natural experiment site for Beijing to test the rigged election.

As William Dobson argues in his seminal work, “The Dictator’s Learning Curve”, iron fist is not the most effective way in authoritarian governance, but a birdcage with limited freedom[38]. In such a political system, authoritarian rulers treat democratic elements as disguises to earn legitimacy to retain power.

In Hong Kong’s legislative election, parties faced real competition before the enforcement of national security law. Although the pro-establishment gained most of the seats in most of the elections, the pro-democratic camp was able to check government and pro-establishment legislators' power. In some instance, the pro-democratic camp won the majority seats, such as in the 2019 district election[39]. However, since Beijing gained full control through the imposition of the law, pro-democratic lawmakers were disqualified and faced charges of “colluding with external forces and individuals to undermine China’s stability and security.[40]”

Moreover, the recent election overhaul restricts the election to only Beijing-backed candidates. On 11th March 2020, the National People’s Congress (NPC) approved a resolution to overhaul Hong Kong’s election system. The remodelling ensures only “patriots” that defined by Beijing can participate in the election. A vetting committee will be created for “reviewing and confirming the qualifications” of candidates[41]. The directly elected seats in the legislative branch will be reduced. Meanwhile, the Election Committee for selecting the Chief Executive will have the power to nominate candidates to the legislative elections and even appoint some Legislative councillor, which grants Beijing greater power to control the election outcome[42].

Under the overhauled election system, Beijing can stage managed elections. Beijing utilizes a subtle form of control to allow only a pocket of opposition candidates, who respect Beijing’s near-monopoly and faint red lines. As Zhang Xiaoming, the Hong Kong and Macau Affairs Office deputy director, addresses, “patriots in pan-democratic camp can still stand in elections.[43]” These “patriots” candidates can provide check and balance to low-level officials in the government to avoid fossilization and corruption commonly seen in the “loyalty dominance” political system. In future public discontent events, though they are doubtful due to the fear induced by the national security law, those candidates can divert support away from the radical, militant oppositions and attract votes from the protests. In facing foreign criticism, they can represent the “democratic and liberal” voices from Hong Kong to the international conference, fending off the international sanctions.

Despite the rigged election design, Beijing nevertheless uses iron fists to marginalize actual opposition forces overseas. The national security law authorizes the national security apparatus to have the extrajudicial enforcement ability on issues related to Beijing-defined “subversion, secession, terrorism or colluding with foreign forces. Taking refuge in overseas countries and radical opposition figures will remain threatened. For example, Nathan Law, a prominent young activist relocated in Britain, Simon Cheng, the former British consulate staffer who alleged being tortured under Beijing custody, who is now in the U.K, Ray Wong, a pro-independence activist in Germany, are wanted by the Hong Kong police on suspicion of incitement to secession and collusion with foreign forces.[44]” They are painted by media propaganda as “foreign agents” and “anti-China destabilizing forces.[45]” The rest of the domestic opposition leaders confront diverse forms of oppression, such as the abovementioned bringing under custody and being removed from public office.

This pilot experiment in Hong Kong could be replicated into other Chinese cities, or worse to Taiwan, in One Country Two Systems' disguise. Left-leaning democratic leaders might be deceived by the ostensible features of election and failed to observe the distorted democratic and liberal value. It will be ironic if Hong Kong's case becomes a "China Model" and export it to the world.

Conclusion

Along with building a national security state in China, Beijing is gradually establishing another national security state in Hong Kong. China’s motivation derives from the “Three Dangers” strategic assessment. If China’s effort at first appearing benign, it is now unmasked as malign operations. Its operations include the combination of “firm hand policies” and “soft hand policies” and divide and conquer the vested interests in Hong Kong.

To counter China’s offensive posture and exporting the “China Model”, democratic countries need to cooperate to raise awareness, formulate plans to fight disinformation and uphold democratic values. However, Beijing’s calculations are not unerring. Any unexpected event or single miscalculation may generate a divergent consequence for China. Does it really foresee that and be prepared?

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