A few weeks ago, in Hong Kong’s Saddest Day, we echoed legislator Tanya Chan’s sentiment after China’s rubber-stamp National People’s Congress announced it would enact national security legislation for the city.  As sad as that fateful May 21 was, we warned “the days ahead could be much sadder” for Hong Kong. Unfortunately, that prediction has come to pass. On June 30, the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region came into force, and every aspect of its enactment is confirming Hongkongers’ worst fears.

The new law was “kept secret from the public until 11pm local time, when the law officially went into effect.” And it wasn’t just the public that was kept in the dark: Hong Kong’s top official, Chief Executive Carrie Lam, “acknowledged in a press conference shortly after the passage that she had not seen a full draft.” This, however, did not prevent Lam (and a host of pro-Beijing toadies) from welcoming the new law, sight unseen.

This is a fitting start to Hong Kong’s new era of opaqueness, in which a new Office for Safeguarding National Security run by Beijing will handle offenses “endangering national security” (Art. 49(4)), while enjoying immunity from Hong Kong laws (Art. 60). Hongkongers accused of breaking the law could be sent to juryless Hong Kong courts (Art. 46), if they’re lucky. If they’re not, and their case is handled directly by the new national security office, they’ll be tried by prosecutors and courts designated by Beijing, in unspecified venues (Art. 56). As the Central Government’s man in Hong Kong helpfully clarified, the new office “abides by Chinese law and . . . Hong Kong’s legal system cannot be expected to implement the laws of the mainland.”

For some time now, it has been clear that the end was nigh for Hong Kong’s One Country, Two Systems arrangement. On June 30, the death certificate was issued in the form of the new law. It is simply impossible to look at the new law and claim with a straight face that Hong Kong retains any meaningful autonomy. In addition to the frightening prospects mentioned in the preceding paragraph, the new law directs the Hong Kong Government to establish a new Committee for Safeguarding National Security, which “shall be under the supervision of and accountable to the Central People’s Government” (Art. 12). This committee will have a National Security Advisor (NSA), “who shall be designated by the Central People’s Government” and who will “sit in” on Committee meetings (Art. 15).

For its part, the Hong Kong Police Force (HKPF) is required by the new law to “establish a department for safeguarding national security with law enforcement capacity” (Art. 16). The appointment of this new department’s head shall be approved by Beijing’s new national security office. Meanwhile, the Hong Kong Department of Justice must set up a “specialized prosecution division,” the line members of which must be approved by the new Committee (with its Beijing-appointed NSA) (Art. 18). The appointment of this division’s head must be approved by the national security office. Last but not least, Hong Kong’s Financial Secretary shall “appropriate from the general revenue a special fund to meet the expenditure for safeguarding national security” without regard to any relevant restrictions in Hong Kong laws (Art. 19).

In other words, Beijing will now vet police and prosecutorial appointments in Hong Kong, while telling the Hong Kong Government how to spend its money. Meanwhile, the stage is set to end Hong Kong’s long tradition of jury trials, in the cases where it matters most. To top it all off, a legal mechanism has been established to have Hong Kong offenses tried by Mainland Chinese courts, potentially at locations deep within China.

This is devastating. The nightmarish future that Hongkongers feared when Britain sold them down the river in 1984 (hmm) is here. (To be fair to the UK, it is very belatedly making some amends, by offering some Hongkongers a path to British citizenship.)

In the run-up to the enactment of the new law, there were many attempts to downplay its practical consequences, raising the possibility that the law would more than anything be held over Hong Kong’s head. Chief Executive Lam’s deputy said “only terrorists and separatists would be targeted by the law.” Even the Global Times, a Chinese Communist Party (CCP) mouthpiece, suggested the law would be used sparingly, only in cases involving collusion with foreign forces.

Well, the HKPF clearly didn’t get the memo. On the day after the law was passed, the force tweeted that “around 370 arrests, including 10 (6M&4F) for breaching #NationalSecurityLaw, have been made today.” Another tweet boasted,

A man was arrested for holding a #HKIndependence flag in #CausewayBay, Hong Kong, violating the #NationalSecurityLaw. This is the first arrest made since the law has come into force.

The photos that accompany the tweet show a simple black banner with 香港獨立 HONG KONG INDEPENDENCE emblazoned across it in white. This will get you arrested in the new dystopian Hong Kong, making a mockery of the Basic Law‘s promise of freedom of expression. Adding insult to injury, the CCP’s local goons will broadcast this obscenity to the world (helpfully adding hashtags to make sure the right people get the message).

No doubt, some in Hong Kong’s international business community will continue to put on a brave face. And for companies that are in China for China, Hong Kong might still be a better bet than, say, Shenzhen. But savvy companies and businesspersons will be looking very carefully at their Hong Kong exposure. Risks of all sorts have to be evaluated in a new light. To take just one example, the choice of Hong Kong as a venue for dispute resolution will be subject to increasing concerns, as I discussed in Hong Kong’s National Security Law Has Left Lawyers Uneasy (Law360). If litigation against a Chinese party, especially a well-connected and/or state-owned one, is a possibility, how secure will your company’s assets be in a Hong Kong bank? How impartial will a Hong Kong judge gunning for an appointment to the national security bench (Art. 44) be when hearing such cases?

The new Hong Kong will be fraught with serious dangers for international businesses. While Hong Kong will not turn into a barren rock, the city’s new reality is simply inconsistent with a role as Asia’s world city. And to be fair, the city’s decline began long before the national security law and the unrest that led to it. Hong Kong has been steadily losing out to Singapore and Mainland cities for many years, due to a variety of factors.

But the demise of One Country, Two Systems is not just killing off a world-class business center. Hong Kong’s very spirit has also suffered a lethal blow. As the imposition of the new law approached, Yuen Chan poignantly tweeted:

Do you remember that feeling of lightness when crossing from the Mainland into Hong Kong – knowing you could speak freely, publish freely, didn’t need to look over your shoulder, interviewees didn’t need pseudonyms, you could conduct interviews with a microphone out in the open?

“Feeling of lightness” perfectly captures the experience of returning to Hong Kong from the Mainland (at least in the good old days), even for non-journalists. That feeling of lightness for me was seeing my phone come to life with all the WhatsApp, LINE and Gmail messages that couldn’t get through while I was in China. It was being able to access news sources without censorship and find books that were not sold across the border. It was attending June 4 vigils, engaging in critical discussions about government policies at lectures, and visiting places of worship free of government interference. It was the care with which customs officers preserved chain of custody and recorded witness statements when I examined seized counterfeits at their warehouse . . . because rule of law mattered. It was a police force that could be trusted.

All of that is now at risk. The wonderful example of a Chinese society reaching the pinnacles of development is fast eroding. As in a reverse takeover transaction, the CCP is hollowing out the soul of Hong Kong, leaving only the thinnest of shells to give cover to those who naively or self-servingly claim it’s business as usual. Yes, the barristers may continue to wear wigs, the government’s pronouncements may pay lip service to civil liberties, and the street signs (and police tweets) may be in English. But behind that ornamentation, the reality is that from Beijing to Xinjiang to Tibet to Hong Kong there is now one system of repression.

What’s more, the turn of events in Hong Kong makes it clear that the CCP has no intention of making China look more like Hong Kong, but the opposite, giving yet more reason for despair.

Photo of Fred Rocafort Fred Rocafort

Fred is a former diplomat who joined Harris Bricken after more than a decade of international legal experience, primarily in China, Vietnam, and Thailand. His wide range of experience includes starting and operating his own business in Asia, working as an in-house counsel…

Fred is a former diplomat who joined Harris Bricken after more than a decade of international legal experience, primarily in China, Vietnam, and Thailand. His wide range of experience includes starting and operating his own business in Asia, working as an in-house counsel for a Hong Kong-based multinational, as well as many years as a State Department official, providing a client-centric perspective to his legal work. Fred co-hosts Harris Bricken’s weekly Global Law and Business podcast, which covers legal and economic developments in locales around the world to decipher global trends in law and business with the help from international guests.

Fred began his career overseas as a U.S. vice-consul in Guangzhou, China, adjudicating thousands of visa applications and advocating for fairer treatment of American companies and citizens in China and for stronger anti-counterfeiting enforcement. After entering the private sector, Fred worked at a Shanghai law firm as a foreign legal advisor and later joined one of the oldest American law firms in China. He also led the legal team at a Hong Kong-based brand protection consultancy, spending most of his time out in the field, protecting clients against counterfeiters and fraudsters from Binh Duong to Buenos Aires.

Fred is an ardent supporter of FC Barcelona—and would be even in the absence of Catalan forebears who immigrated to Puerto Rico in the mid-1800s. An avid explorer of Hong Kong’s countryside, he now spends much of his free time discovering the Pacific Northwest’s natural charms.