One Country, Two Systems, and a Chinese Intervention

One country, two systems: this doctrine has defined the relationship between China and Hong Kong since the United Kingdom ceded Hong Kong in 1997. Paramount Leader Deng Xiaoping adopted this principle so that the distinct Chinese regions of Hong Kong and Macau could refrain from adopting a socialist economic and political system. Hong Kong thus became the Hong Kong Special Administrative Region of the People’s Republic of China. While China granted Hong Kong a great deal of autonomy, Beijing maintains the authority to intervene and interpret Basic Law (the constitutional document of Hong Kong) as they see fit.

        This general autonomy allowed Hong Kong to become one of Asia’s largest financial hubs. The city is home to a myriad of multinational corporations, banks, and law firms, fundamentally due to its political stability and the reliability of its courts. However, in recent years China has been quick to interfere in Hong Kong’s affairs, particularly when anything could be interpreted as a threat to China’s rule. For example, the National People’s Congress’ (NCP) decision to set restrictive limits on both Hong Kong’s Legislative Council and Chief Executive elections, increasing their control on who may take office. This sparked the 2014 Umbrella Movement; the four months of sit-in protests were denounced as illegal by Beijing, and protestors faced both arrest and excessive force by local law enforcement.

        Now 2016, Hong Kong once again faces political intrusion by the Chinese. Earlier this year, Yau Waiching and Sixtus Leung were elected to Hong Kong’s Legislative Council. The two young politicians are fierce advocates for Hong Kong’s independence from China, a sentiment expressed during their October swearing in. Leung appeared with a flag draped around his shoulders that read “Hong Kong is Not China;” both he and Waiching deviated from their oath of office by replacing the word China with “Chee-na,” a derogatory slur towards the Chinese people.

Their oaths were, at first, ruled invalid by the Hong Kong Legislature, delaying them from taking their seats. However, the president of the Council determined that the former activists would be allowed to take their seats, permitting that they retook the oath accurately. But Waiching and Leung’s actions sparked a swift intervention from the National People’s Congress. Labeled as threats to national security, the pair was barred from Hong Kong’s legislature. Massive protests broke out in Hong Kong over the weekend; nonetheless, China refused to back down in their decision. This is the fourth time since 1997 that China has directly involved themselves in Hong Kong, but this particular occurrence sets a startling new precedent. Chinese authorities have the power to step in and obstruct critics of Communist rule from holding elected office.

Current elected officials also fear what this ruling could mean for them. China’s decision emphasized the importance of oath-taking; specifically, if a member of the Legislative Council violates their original oath (which swears allegiance to both Hong Kong and China), they will be held accountable. However, the ruling fails to mention who determines whether or not a breach of oath has taken place and what punishment should occur. This vagueness could easily throw the entire legislative branch of Hong Kong into turmoil. A current member of the Council expressed this sentiment, arguing that “the interpretation is vesting so much power in [any one] person to decide whether someone is sincere and allegiant enough to take office, and there is no checks-and-balance against that person.”

China’s decision casts a shadow on Hong Kong’s future, especially its future as a financial center. Financiers feel secure in Hong Kong’s laissez-faire economy; intervention by a socialist China drastically increases vulnerability. If China is essentially able to pick and choose the leaders of a nominally autonomous Hong Kong, then it is impossible to know whether or not those leaders will maintain the Hong Kong’s current “positive non-interventionist” fiscal policy. In addition, the renowned transparency of Hong Kong’s courts would fade, inspiring greater distrust from potential investors.

These issues would affect more than just Hong Kong. The territory is vital to China’s economy: it is a source of equity financing; it provides Chinese companies with a link to the global economy; and it is a key center for investment both in and out of China. If Hong Kong’s economy were to falter, China would undoubtedly pay a heavy price. Thus, it is in China’s best interests to allow Hong Kong the freedom it needs in order to remain an indispensable contributor to China’s economic standing.

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