In Hong Kong, China’s grip may feel like ‘death by a thousand cuts’

Once one of Asia’s most high-flying cities, Hong Kong now struggles with deep pessimism.

The stock market is in trouble, house prices have plummeted and emigration is causing a brain drain. Some of the most popular restaurants, spas and shopping centers that locals flock to are located across the border in the mainland Chinese city of Shenzhen.

“It pains me to say that Hong Kong is over,” wrote Stephen Roach, an economist and former chairman of Morgan Stanley Asia, long known for his optimism about the city, in a recent commentary in The Financial Times.

The government needs to revive Hong Kong’s economy and boost its global image, but has instead focused largely on national security. On Tuesday, the country moved with unusual speed to pass a package of updated and new security laws aimed at curbing foreign influence and dissent, with penalties including life imprisonment for treason and other political crimes. The legislation could deter even more foreign companies, which are already shrinking, from investing in Hong Kong.

The malaise hanging over Hong Kong is partly a result of the city’s status as a bridge between China and the West, with the city’s growth held back by the mainland’s sputtering economy and Chinese tensions with the United States.

But at the heart of Hong Kong’s problems is an identity crisis, as the city’s Beijing-backed officials push the once free city away from the West and embrace the top-down political culture and nationalist fervor of President Xi Jinping’s China.

“People are very unhappy for all kinds of reasons,” said Emily Lau, a veteran pro-democracy politician and former lawmaker who now hosts an interview program on YouTube. “Of course the authorities won’t admit this publicly, but I think they know it.”

Hong Kong, a former British colony, had promised a degree of autonomy from Beijing after returning to Chinese rule in 1997, with freedoms unseen on the mainland. But after massive anti-government demonstrations engulfed the city for months in 2019, Beijing imposed a sweeping national security law on Hong Kong in 2020, which authorities used to brutally crush pro-democracy opposition.

According to the Chinese Communist Party, the protests were sparked by Western forces seeking to undermine Chinese sovereignty. John Lee, the city’s Beijing-backed leader and former police officer, has described Hong Kong as still under siege by subversive foreign forces.

says Mr. Lee the new security laws will eliminate such threats and “provide the strongest foundation for Hong Kong’s prosperity and stability.”

Mr Lee and Chinese officials have argued that such laws are long overdue. The Basic Law, the city’s mini-constitution, calls on Hong Kong to maintain its own political and economic system for 50 years, but also requires the country, under Article 23, to adopt its own internal security laws. The government first tried to enact such Article 23 laws in 2003, but withdrew after hundreds of thousands of residents took to the streets in protest, fearing the legislation would restrict civil liberties.

With security laws in place, officials now say, the government can focus on other needs, such as reviving the economy.

But it is unclear whether Hong Kong can maintain the dynamism and vitality that drove its prosperity at a time when Beijing’s control is so overt. The new rules also raise questions about how the borders have shifted.

“Xi Jinping knows that Article 23 will damage Hong Kong’s reputation as a financial center,” said Willy Lam, an analyst of Chinese politics at the Jamestown Foundation in Washington. “He knows that Beijing needs Hong Kong for foreign investment, foreign exchange and stock market listings. But he is a completely ideological leader. It is much more important for him to demonstrate his power, flex his muscles and negate all opposition in Hong Kong.”

If you visit Hong Kong today and scratch beneath the surface, you will see a city very different from the vibrant, sometimes raucous political culture that existed before the current crackdown.

Now government critics and opposition lawmakers are languishing in jail. Jimmy Lai, a pro-democracy media mogul, is on trial on national security charges. Independent news organizations have been forced to close. Public school officials and teachers are being told to take loyalty oaths and take national security tests.

In this new environment, even sports cannot escape politics. Last month, a protest broke out in Hong Kong after football star Lionel Messi sat out a practice match against a team of local players due to injury. The government had promoted the Inter Miami match, which sold many tickets for hundreds of dollars each, as a way to create excitement in the city.

But when Messi was left on the bench, disappointing fans, officials and Chinese state news media suggested he had been used by the United States in a plot to embarrass Hong Kong. Mr Messi later posted a video clip on social media in which he denied the allegations and expressed his affection for China. According to some internet users, the images looked like a hostage video.

One of the most strident voices criticizing Mr Messi was Regina Ip, a senior adviser to the Hong Kong government and a veteran pro-Beijing lawmaker.

“Hong Kong people hate Messi, Inter-Miami and the black hand behind them, because of the deliberate and calculated criticism of Hong Kong,” she wrote on X, formerly known as Twitter.

The Messi controversy was a prominent example of an increasingly testy official atmosphere – but it was far from the exception.

Ms Ip also criticized Mr Roach, the economist, for his “Hong Kong is over” comment in The Financial Times, saying he ignored the real causes of the financial center’s economic problems, which she attributed to US policies , such as federal policy. interest rate increases. Other top officials accused Mr. Roach of scaremongering.

(In response to the backlash, Mr. Roach wrote a commentary for The South China Morning Post, a Hong Kong newspaper, arguing that the city lacked the momentum to withstand Beijing’s increasing political grip, geopolitical tensions with the United States and overcome a long-term decline in the Chinese economy. Chinese economic growth.)

“The energy and unbridled optimism that was once Hong Kong’s most distinctive feature and greatest asset have been sapped,” Mr. Roach wrote.

City officials now routinely lash out at foreign governments, diplomats and the news media for criticizing Hong Kong’s policies. Even voices from the Hong Kong establishment are not spared the invective.

When a pro-Beijing lawmaker complained that police officers were handing out too many fines, Mr. Lee, the city’s leader, reprimanded him for what he called an act of “soft resistance.”

The authorities have used this term to describe an insidious, passive resistance to the government. According to Mr Lee, this backlash also includes complaints that Hong Kong is too focused on national security.

The Article 23 legislation is intended to eradicate such ‘soft resistance’, civil servants have saidand fill the gaps left by the national security law that China directly imposed. The laws focus on five areas: treason, insurrection, sabotage, outside interference and the theft of state secrets and espionage.

Legal experts and trade groups said the broad and often vague wording of the laws posed potential risks for companies operating or looking to invest in Hong Kong. The government was forced to scramble this month to deny reports that it was considering banning Facebook and YouTube as part of the legislation.

“Unhindered information flow is crucial for the city to maintain its status as Asia’s financial center,” wrote Wang Xiangwei, an associate professor of journalism at Hong Kong Baptist University, in an editorial published Monday in The South China Morning Post published. he was once editor-in-chief.

The uncertainty has led some foreign companies to treat Hong Kong as if it were the mainland. They have started using burner phones and restricting local employees’ access to their companies’ global databases.

Hong Kong native Mark Lee said the more his city looked and felt like the mainland, the greater the temptation to emigrate abroad.

The 36-year-old personal trainer said that in recent years about a quarter of the 200 people who used to belong to his WhatsApp group for organizing group runs and training sessions have left Hong Kong. He is hesitant to have a child because he is concerned about Hong Kong’s public school system, which requires national security education.

“If Hong Kong is no longer my city, I will have to leave,” Mr Lee said. The changes, he added, felt like “death by a thousand cuts.”

Keith Bradsher And Olivia Wang reporting contributed.