China has proposed a new security law that will have ramifications on the people of Hong Kong. Hong Kong became a British colony at the end of the 2nd Opium War in the mid-19th century, and in the 20th century the colony became an important conduit for foreign capital into the Chinese economy. The inflows were possible because investors trusted British law to protect their interests even though the money ultimately flowed into the more problematic Communist economy. The British lease for the colony expired in 1997, but British laws remained in force under a compromise known as the “one country, two systems” agreement. As the Chinese economy grew into one of the largest in the world, the attractiveness of the compromise has worn thin for the Communist Party and over the last few years it has tried to gain greater control over Hong Kong. In many respects, the Communist Party has viewed the autonomy of Hong Kong as a threat to its control and views that autonomy in the same light as it views the restiveness in Taiwan, Tibet, and Xinjiang–all areas that have movements that favor independence from the control of the central Chinese government.
The US State Department issued the following statement about the proposed security law:
“The United States condemns the People’s Republic of China (PRC) National People’s Congress proposal to unilaterally and arbitrarily impose national security legislation on Hong Kong. The decision to bypass Hong Kong’s well-established legislative processes and ignore the will of the people of Hong Kong would be a death knell for the high degree of autonomy Beijing promised for Hong Kong under the Sino-British Joint Declaration, a UN-filed agreement.
“Hong Kong has flourished as a bastion of liberty. The United States strongly urges Beijing to reconsider its disastrous proposal, abide by its international obligations, and respect Hong Kong’s high degree of autonomy, democratic institutions, and civil liberties, which are key to preserving its special status under U.S. law. Any decision impinging on Hong Kong’s autonomy and freedoms as guaranteed under the Sino-British Joint Declaration and the Basic Law would inevitably impact our assessment of One Country, Two Systems and the status of the territory.
“We stand with the people of Hong Kong.”
Members of the US Congress have proposed legislation that would impose penalties on individuals and banks that “are complicit in China’s illegal crackdown in Hong Kong”. Interestingly, however, US President Trump has yet to comment on the security proposal, despite his campaign to blame China for the spread of COVID-19: “Spokesman speaks stupidly on behalf of China, trying desperately to deflect the pain and carnage that their country spread throughout the world. Its disinformation and propaganda attack on the United States and Europe is a disgrace….” Relations between the US and China have deteriorated at an alarming rate, largely because there is confusion in the US decision-making arena about which issue is most important. Is it trade? Taiwan? Technology transfer and theft? South China Sea? COVID-19? Trump’s personal relationship with President Xi? All I can find in incoherence when I try to determine the overall policy toward China.
For its part, China seems to have a handle on what it wants, although it does not really know how to interact positively with either the US or the world as a whole. The Global Times, a media outlet that often speaks for the Communist Party in China, is very clear about how it regards the issues in Hong Kong:
“The US’ biggest card is canceling Hong Kong’s separate customs territory status. This would be a blow to Hong Kong’s economy, making a dent in the city’s status as an international financial center. But, at the same time, Hong Kong is a rare contributor to tens of billions of US trade surplus each year. A large number of US companies are doing business there, where 85,000 US citizens work and live. Throwing a punch at Hong Kong means hitting the US itself.
“Hong Kong has been a link between China and the West. Yet, with the deepening of China’s reform and opening-up, this function of Hong Kong has been largely decentralized to China’s coastal areas. If the US cuts its bond with China on Hong Kong, the damage to the Chinese mainland’s economy will be not even close to the blow the US could make 20 years ago.
“More importantly, when China announced the plan, it meant Beijing had already evaluated how Washington would respond, and has been prepared for possible challenges. The possibility of China retreating under US pressure is zero.”
It is hard for me to imagine the US pushing China hard except in terms of political rhetoric which is largely directed toward the American domestic political situation. But it certainly seems to be the case that the Chinese are bewildered about US Chinese policy.
World Politics News 
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