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  1. Home
  2. / Investing
  3. / Global Equity

U.S. Sanctions 24 Chinese and Hong Kong Officials Over Civic Rights

This comes immediately prior to the first high-level meeting between U.S. and Chinese officials.
By ALEX FREW MCMILLAN
Mar 17, 2021 | 07:00 AM EDT

The United States has today deployed sanctions against 24 Chinese and Hong Kong officials for undermining Hong Kong's ability to govern itself and elect its own government. It's the first direct action against China from the Biden administration, and comes at a vital time, right as U.S. Secretary of State Antony Blinken is visiting the key Asian allies of South Korea and Japan on his first overseas trip.

It's a symbolic first step that shows the administration of new U.S. President Joe Biden will go toe-to-toe with Beijing. There are major concerns here in Asia that Biden will take it easy on China, given the light touch deployed by the Obama administration in which he served as vice president. But times have changed, and so too, perhaps, has Biden's willingness to appease Beijing.

Blinken warned on Wednesday that any financial institutions doing business with the officials would face sanctions of their own, potentially cutting foreign banks off from the vital U.S. financial system. Hong Kong Chief Executive Carrie Lam, subject to an earlier round of the same sanctions, comically confessed that she keeps piles of banknotes around her house because she takes her salary in cash, since no Hong Kong bank will deal with her.

The new sanctions set a dramatic stage for the first face-to-face talks between China and the United States. Blinken will meet Chinese Foreign Minister Wang Yi in Anchorage on Thursday for a scheduled two days of talks, Blinken stopping off in Alaska on his return from Tokyo and Seoul. U.S. National Security Advisor Jake Sullivan and China's top foreign-policy diplomat, Yang Jiechi, will also take part.

The 24 people sanctioned include the 14 vice chairs of the Standing Committee of China's legislature, the National People's Congress, including elite Politburo member Wang Chen. They also include the Chinese Communist Party's vice chair of its leading group overseeing matters related to Hong Kong, as well as the deputy director of Beijing's Hong Kong and Macau Affairs Office, and two top officials from Beijing's Office for Safeguarding National Security in Hong Kong. A lot of titles, I know!

The remaining six are Hong Kong bureaucrats heading the National Security Division that works with China's secret police in Hong Kong, as well as Hong Kong's delegate to the Standing Committee of the National People's Congress. What it amounts to is the leaders of China's legislature, which has just approved changes to "improve" the electoral system in Hong Kong, and the Hong Kongers who collaborate with China's spies and representatives to enforce the much-hated National Security Law governing treason and sedition in Hong Kong.

Blinken gave a statement entitled "Assault on Democracy in Hong Kong," as presented by the U.S. Consulate General in Hong Kong. You can read his speech here, which notes how he spoke in Japan about the importance of "shared democratic values," something he says the action on Hong Kong also supports.

This is an update to the Hong Kong Autonomy Act, a new law passed by Congress and then signed into being by former President Donald Trump on July 14 last year. It was used as the justification for sanctions imposed three months later, in a 90-day review, against 10 mainland and Hong Kong officials, including Chief Executive Lam.

Today's announcement, with the names and full roles of the 24 people here, is a scheduled update to that October 14 report. But it offers continuity in the approach adopted by Trump, former U.S. Treasury Secretary Steve Mnuchin, and former U.S. Secretary of State Mike Pompeo. Now Biden, Blinken and U.S. Treasury Secretary Janet Yellen are taking up the yoke. Their work is to the same exact effect, at least on Hong Kong's freedoms.

The Chinese national legislature concluded in Beijing on March 11 with the NPC's unanimous decision (2,895 in favor, 1 abstention) to "improve" the election system in Hong Kong. Blinken says this was a "decision to unilaterally undermine Hong Kong's electoral system," denying Hong Kongers a voice in their own government.

A key proviso of the March 11 decision is that only "patriots" will be allowed to run for office. Beijing, which is laying down an election law on Hong Kong without the input of Hong Kongers, will decide what being a "patriot" means. But it has stipulated it must mean a love for the Chinese Communist Party, which is tantamount to one-party rule. No one will be allowed to run if the CCP does not approve of their candidacy. Sort of a "You can vote for anyone you like, as long as you vote for me."

Clearly, you can love your city and your country without loving the political party in charge. Not in China. As is the case in most dictatorships, the Dear Leader, the sole Political Party, the legislature, the courts and the police are all arms of the same all-powerful being. You must worship this multi-tentacled being as well as the nation that it strangles in its death grip.

There's not much point in participating in Hong Kong politics as a result, which is pretty much how Beijing would like it to be. All the pro-democracy opposition members of Hong Kong's Congress, the Legislative Council, have resigned, after four pro-democracy lawmakers elected by popular vote were removed from office. Virtually every activist, dissident or opposition politician has been charged with some form of crime, predominantly violations of the hated new National Security Law. That was forced on the city without Hong Kong input, too, at last year's National People's Congress.

In the most ridiculous use of that law, 47 pro-democracy politicians now stand charged with "conspiracy to commit subversion," for trying to get elected to the legislature. They intended to win a majority and then challenge the Chief Executive on policy, which everywhere else is how politics works. For this, they stand to serve years-long prison sentences, and be disqualified from seeking office.

This all violates completely the Sino-British Joint Declaration, the agreement between Britain and China when Hong Kong was handed back to Beijing. The deal states we in Hong Kong will have one-person-one-vote full democracy by 2007 at the latest. We are still waiting. The Hong Kong constitution, the Basic Law, also says Hong Kong will govern itself with a "high degree of autonomy" and continue to enjoy its civic freedoms of speech, assembly, political thought, law and economy.

We are already seeing this patriotism nonsense put to use. In local elections, 17 out of 18 district councils were swept by pro-democracy candidates. This clearly shocked the Lam administration and scared the pants off Beijing. It is intent never to allow that kind of thing to happen again. The Hong Kong government has announced an oath-taking bill to force the district councilors to swear allegiance to Hong Kong, by extension Beijing, and to uphold the Basic Law. Even though Beijing is violating the Basic Law.

The Basic Law is in tatters. If Beijing finds something it does not like in the law, it simply delivers an "interpretation" that the law actually meant to say something else. Only Hong Kong's economy continues to function freely. Even that faces serious scrutiny - the National Security Law applies subversion, sedition and treason rules to all citizens of any nation, anywhere in the world. So a banking analyst could conceivably be arrested in Hong Kong for subversion if he or she writes a report stating Beijing's new five-year economic plan, coronavirus-vaccine diplomacy, or political changes are no good.

It is also against the law to say that the United States should sanction Hong Kong and China. Washington certainly should fight to protect Hong Kong's freedoms in this way, many Hong Kongers hope. Not me, of course, because that would be illegal.

The last thing Hong Kongers have in their defensive arsenal is to leave, for good. Many are doing just that. My wife's best friend just left for London. Others depart for Singapore, Toronto, Vancouver, Sydney, New York, Los Angeles. Many parents don't want their children to grow up in an environment in which the school syllabus will also teach "patriotism," enforce singing the Chinese national anthem, and airbrush inconveniences like the 1989 Tiananmen Square massacre.

If a pending new immigration law condemns Hong Kongers to remain in the city, as their mainland Chinese brethren must do, the city's life will screech to a stop. The difference between mainland China and its hard-core one-party state and the supposedly free-wheeling East-meets-West mix in Hong Kong is disappearing day by day.

We can expect tit-for-tat sanctions from China against 24 U.S. politicians and activists. We can also expect some frosty faces in Alaska.

As Politico explains nicely, the Chinese side characterize the meeting as two superpowers engaging in "high-level strategic dialogue" to set the world's agenda. The U.S. participants paint this as a chance to confront China on security and human-rights issues that need to be set straight before relations can get on an even keel.

The Blinken team say Hong Kong politics, China's repression of its Uighur minority in Xinjiang Province, and China's aggressive and repeat invasion of Taiwan's airspace will be on the table. The Chinese and U.S. entourages will not meet for dinner, probably because of the pandemic, but perhaps that's just as well.

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At the time of publication, Alex Frew McMillan had no position in the securities mentioned.

TAGS: Investing | Markets | Politics | Trading | China | Global Equity

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