THE TTALK QUOTES


On Global Trade & Investment
Published Three Times a Week (with occasional bonus quotes) by
The Global Business Dialogue, Inc.
Washington, DC  20006
No.57 of 2020
MONDAY, JULY 27, 2020

Click HERE for last Friday's quote from Uhuru Kenyatta.


CHINA'S NEW LAW FOR HONG KONG ... AND THE EU

"Yes, a European citizen who in her home country argues in favor of self-determination for Hong Kong (or Taiwan, or Tibet for that matter) falls afoul of the law and could be imprisoned. "

Jacques Crémer
July 23, 2020 (Publication date)
CONTEXT
It is “The Law of the People’s Republic of China on Safeguarding the National Security of Hong Kong,” and it was revealed to the world – and entered into force – on June 30, 2020. It has triggered emphatic responses, not just in the streets of Hong Kong, but around the world. Some have been loud and linked to strong national policies. We would put U.S. Secretary of State Mike Pompeo ’s July 1 statement in that category. As he explained, the United States will no longer treat Hong Kong as an entity that is separate and distinct from China. That policy was later amplified in President Trump ’s Executive Order of July 14, which explains that:

  “The Special Administrative Region of Hong Kong … is no longer sufficiently autonomous to justify differential treatment in relation to the People’s Republic of China … .”  

Other reactions have included quieter but no less profound statements by concerned individuals. Today’s featured quote is one of those. We found it in an op-ed article by Jacques Crémer , published last week by PROMARKET, a newsletter from the Stigler Center at the University of Chicago Booth School of Business. Mr. Crémer is a professor of economics at the Toulouse School of Economics in France. Over the years he has been a frequent visitor to Hong Kong and to mainland China. His quarrel with the goal of the new legislation emerges early in his article, when he writes: 

As many commentators have noticed, the new law has very little to do with China's national security and much more to do with suppressing Democratic freedoms and stifling debate in Hong Kong.

Perhaps it is because Mr. Crémer is a citizen of Europe that his strongest and most personal arguments against the new law are directed against its extraterritorial reach. Here is more from the section of his article with today’s featured quote: 

There is another important concern with the so-called National Security law, which directly impacts European fundamental interests: it infringes on the rights of foreigners in general and those of European citizens in particular. Its article 38 states “This Law shall apply to offences under this Law committed against the Hong Kong Special Administrative Region from outside the Region by a person who is not a permanent resident of the Region.” Yes, a European citizen who in her home country argues in favour of self-determination for Hong Kong (or Taiwan, or Tibet for that matter) falls afoul of the law and could be imprisoned. The same holds for a European parliamentarian who calls for sanctions against China. And by writing this column, so have I.
COMMENT
Professor Crémer’s article is exceptionally well reasoned and well written, and we encourage you to read it for yourself. Two versions are referenced in the links below: the one from PROMARKET mentioned above, and an earlier version, which had been posted as a blog on Professor Crémer’s website. The latter includes an interesting exchange between the professor and a former student.  

Among the many things we have left out of this short abstract is Professor Crémer’s complaint about the EU’s initial, relatively mild response to this new Chinese law. But that part of the discussion may soon be overtaken. The South China Morning Post, for example, recently reported that the EU is considering new restrictions on certain exports to China as a signal of its displeasure over the new law.  

And that is just the tip of the iceberg. The larger point is that the world at large – much of it anyway – is now seriously and comprehensively re-evaluating its relationship with China. The new national security law is part of that re-evaluation but only part. There are a host of contentious issues. Extradition policies, Huawei and 5G, disputed islands in the South China Sea, Taiwan, and the WTO are some of the many others. On that last point, the WTO, Peter Carl , a former Director General for Trade at the European Commission, published an article last week in which he suggested the world may need to recreate the WTO, only this time without China. Others have whispered similar thoughts, but the fact of Mr. Carl’s article speaks volumes. 

***

We scratch our head in wonder. Putting aside the WTO issues, why, we ask ourselves, is China provoking so many countries over so many issues? And why now? In some respects, it seems out of character. If there is any persistent theme in China’s discourse with the world, it is China’s insistence that it will not tolerate interference in its internal affairs. Why then did China’s officials include Article 38 in the new national security law? Surely, they knew that their claim to govern speech in foreign countries flies in the face of the doctrine of non-interference in the domestic affairs of others.  

But the really big question is the timing of everything. We in the West have for years been indoctrinated with the notion that China plays the long game, that China’s leaders, inheritors of four thousand years of civilization, know time is on their side. So why is China challenging virtually everyone now? The Hong Kong issue illustrates the point. Under the terms of the 1984 Sino-British Joint Declaration, China’s obligation to accord special privileges to Hong Kong only has 27 years to run. In 2047 China’s international obligation to “one country, two systems,” comes to an end. One has to ask, why did not China, the country of “The 100-Year Marathon,” simply wait?

And yet, on issue after issue, China has decided it cannot wait. So, this period of lockdowns, protests, and COVID-19 is further exacerbated by mounting controversies among the world’s great powers. It’s a tough time for optimists. But maybe, just maybe, if these conflicts had to come, better now than later.  
SOURCES AND LINKS
Liberal Democracy Have a Duty is a link to the PROMARKET article by Jacques Crémer. This was the source of today’s featured quote and much of the context section of this entry.  As a blog takes you to an earlier version of this same piece. 

Jacques Crémer is a link to a biographical note on this French economist as published on the website of the Toulouse School of Economics. 

A WTO Without China takes you to the Les Echos article by Mogens Peter Carl which raises the possibility of successor organization to the WTO, one without China.  

July 25 Thoughts on Trade is a link to last Friday’s blog post from Terence Stewart. In it, Mr. Stewart highlights portions of the Peter Carl article mentioned above, including English translations for portions of it. Mr. Carl’s article is in French.

An Executive Order on Hong Kong takes you to the text of President Trump’s order of July 14 mentioned above. 

Possible Export Restrictions is a link to the South China Morning Post article also mentioned above. 







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