Haynes: Future of Hong Kong at the center of US trade war with China

Nov 15, 2019, 6:56 AM

Alexander Haynes is an aspiring journalist raised in the northwest with a background in investigation and policy. He is a graduate of an internship program at KTSW 89.9 in San Marcos, Texas and will always have a new book recommendation for anyone who asks. He has been reporting on the ground from Hong Kong during the city’s recent protests and time of civil unrest.

Hong Kong’s protests started in June 2019 against proposals to allow extradition to mainland China. Critics feared this could undermine the city’s judicial independence and endanger those critical of mainland China.

Carrie Lam, the Chief Executive of Hong Kong (appointed by China) agreed to suspend the extradition bill however demonstrations developed to include demands for full democracy and an inquiry into police actions that have lasted over five months.

The extradition bill was withdrawn in September. Clashes between police and activists have become increasingly violent, with police firing tear gas and rubber bullets without warning and protesters attacking officers and throwing petrol bombs, in recent days.

Haynes: A Seattle journalist reports from Hong Kong’s battle for freedom

The trade war between the United States and China has been an almost purely economic debate; one primed over numbers, tariffs, imports, and exports. The marching order for a trade deal has been a talking point since 2016 primaries, and an economic tariff game since early 2018.

President Donald Trump has enormous pressure to sign any trade deal to signal positive perception, possibly even a deal that disregards functional impact on the United States economy or overseas authority. With that being said, the trade war is far more complicated when the protests in Hong Kong are considered.

The White House’s ideal trade deal is one championing the authority of isolationist tariffs – tariffs which will, bluntly speaking, remove the United States’ economy as a player in foreign trade round tables.

The greatest example is one of the world’s most important re-exporters, Hong Kong. The special administration region de facto loses economically in any deal, as tariffs on Chinese goods are raised, and consequently China raises tariffs on American imports. While Hong Kong is technically protected by the United States-Hong Kong Policy Act, Hong Kong Baptist University Economics leader, Dr. Billy Mak Sui-Choi noted that President Trump has already broken all of the rules in negotiating a trade deal. That is, the trade deal is fundamentally redefining the rules of trade negotiations.

Only five percent of Hong Kong’s imports are from the United States, while overall exports total three percent towards the United States. Although these numbers appear small, they bear a significant effect on what remains of Hong Kong’s middle class; a group sharply dwindling as poverty rates now reach one in five people.

In fact, Hong Kong’s financial advisors have already warned that the middle class will continue to be hit by unpredictable and steep tariffs, estimating 5,700 products will be affected.

In response to the growing poverty rate, Hong Kong has increased government housing projects and mobilized large-scale infrastructure projects that are supposed to create jobs. While the mandates achieve the notion in spirit, the job creation has actually fed back into mainland Chinese development, while forcing Hong Kong’s citizens into a dependence on the government’s hand. To define the conditions in the language of antiquity: Hong Kong is on a path to serfdom, the antithesis of their democracy.

Hong Kong will feel the impact of the trade war foremost as it inevitably feeds their economy to China. Even more concerning than the economic ramifications is the continual erosion of democracy, further dependence on mainland China for agriculture (a quaint $4 billion of agriculture is exported to Hong Kong), and the notion that Hong Kong sovereignty has already been traded as part of this deal. The isolationist trade deal will abandon the ally of Hong Kong, granting China authority in the Pacific Rim to do as they will.

The recent stall of the Hong Kong Human Rights and Democracy Act is the distasteful philosophical result of the trade war. For several weeks, Senate Leader Mitch McConnell (R-KY) has stalled on putting the bill to a vote while his office refused to comment.

However, on Thursday morning, per Sen. Josh Hawley (R-MO), the bill was finally put on a “hotline” (motion to vote without debate) after Senator Marco Rubio (R-FL) made a dedicated push on Wednesday evening. If no senator objects, the bill could be passed as this article is published. Even Senator McConnell finally showed support of the bill in a Tweet after the news broke.

International support of Hong Kong’s democratic movement would be an idealistic blow to China’s nationalistic push, not only into Hong Kong, but into Tibet, Kashmir, Singapore, Taiwan, Macao, and other regions bordering mainland China.

The Hong Kong Human Rights and Democracy Act may initiate a second thesis of international leadership and solidarity with Asian countries pushing for democracy; a values context that has become absent in the United States trade conversation. However, the functional pull-out from trade with Asian countries removes the authority to build weight behind the act.

The lack of international leadership has already resulted in movement forward for the Regional Comprehensive Economic Partnership (RCEP), a 16-country Asia-Pacific trade deal set to be signed in 2020. Notably, the United States is absent, allowing China to usurp and become the juggernaut trade arbitrator of the deal. Without an economic sway in such deals, the United States will be at a loss to assist emerging economies which are being swallowed by China’s cronyism.

A further statement from BRICS (a Brazil, Russia, India, China, South Africa trade deal) concluded that protectionist activity must be taken against the United States in response to tariff actions. While BRICS are still “emerging markets,” China is pushing ahead of the pact as the rational leader against the United States. Hence forward, China can act at will in other regions if they maintain a position of economic leadership in such organizations as BRICS and RCEP.

Spady: Wake up, America — China is our real enemy

Regardless, if the United States continues moving towards isolationism in the coming years, the ability to politically and morally operate with regions such as Hong Kong will wane. The connection will bounce home to Seattle as well, a key port for Pacific Rim nations. While Port of Seattle imports have grown one percent over the past year, much of that growth was seen in surplus shipments from the beginning of the year before a recent 25 percent tariff rate was applied. End-of-year imports in the port are troubling, falling 13.8 percent in the past month.

Hong Kong being exchanged to the whims of China will only lead to a fall of democracy throughout the Pacific Rim, and subsequently, damage to free international relations between those countries and the Seattle market.

Hong Kong has already been traded as part of the trade deal – that much is unfortunately inevitable. The Hong Kong Human Rights and Democracy Act will most likely be null and void by the time we reach the first stage of any trade deal.

The trade deal will inevitably signify a solidification of isolationism, giving China more room to dictate the flow of other economies, and thus, as has been observed in Hong Kong, a manipulation of their population and governmental system; a devastating threat to the advancement of democracy at home and abroad.

You can follow Alexander Haynes’ reporting from the streets of Hong Kong on Twitter, @ACLHaynes – make sure to listen to The Saul Spady show every morning from 6-9 a.m. on 770 KTTH for these types of stories and more.

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Haynes: Future of Hong Kong at the center of US trade war with China