Hong Kong: Security law as fire accelerant between USA and China?

Skyline von Hongkong - das neue Sicherheitsgesetz sorgt für Unruhe

On May 21, 2020, the highly controversial “National Security Law” was announced in the Chinese government. As a result, the Asian markets have corrected, in particular the Hang Seng (Hong Kong Index) lost more than 5.5% in one day. The passing of the law – planned for 28 May 2020 – could have far-reaching consequences for the Hong Kong Special Administrative Region. The Hong Kong government has been trying to introduce such a law since 2003. However, this has increasingly failed due to resistance from the opposition and the population.

Last year there were protests against an extradition law that was averted by an overwhelming cohesion of the Hong Kong population. Now the Chinese Communist Party has had enough and is trying with an iron fist to introduce the National Security Law via a detour in Hong Kong (there is an outcry). The law could have enormous effects on the freedom of the people and the economy in Hong Kong, but also beyond the borders.

The potential dangers and implications

The effects are far-reaching and affect a wide range of areas. Hong Kong’s autonomy is under threat! The end of “one country two systems”? Hong Kong’s status was guaranteed until 2047 and enshrined in international law. After less than half that time Beijing could destroy the law. Its introduction could lead to the abolition of freedom of expression, freedom of the press and the right of assembly (right to demonstrate) under the guise of the Security Law and adapted to conditions in China. In concrete terms, this would mean the death of the opposition and all pro-democracy efforts. The last bit of democracy left would thus be eliminated.

The Security Law would give the Mainland Chinese police and the People’s Republic’s secret service far-reaching powers to take action against government critics in Hong Kong. Hong Kong was previously legally independent from Mainland China. It would be easy for the Communist Party to arrest opponents of the government. Since China is far from being a constitutional state and often acts in an arbitrary manner, fear prevails. Not only among the population, but also among Western companies and the economy as a whole.

The autonomy of Hong Kong and the special regulations resulting from it have allowed Western companies to benefit. Hong Kong’s legal system has provided stability. The laws of the Special Administrative Region have made it easier for foreign companies to establish themselves there. This could give way more and more with the adoption of the Security Act, removing stability and independence from Hong Kong.

Hongkong`s special situation

Hong Kong has always been considered a bridge between China and the USA. By linking the Hong Kong Dollar to the US Dollar, Chinese companies and wealthy people can use Hong Kong as an exchange office. The possibility of exchanging the “insecure” Renminbi for the “strong” US Dollar is of great importance here. If this peg were to be removed, there would be considerable effects on the Chinese currency. But also on the economies of China and Hong Kong. Furthermore, the announcement has already triggered sharp criticism in the Western world. The USA and Great Britain in particular have expressed their reservations about the security law.

The probability of the USA interfering and thus further increasing the tensions between the two superpowers increases dramatically. This would also have global repercussions if the trade war intensifies and geopolitical dangers increase. One can almost be sure that Taiwan will be the next target if Beijing gets away with the iron fist policy in Hong Kong. The domestic political pressure on the USA to guarantee Taiwan more security is growing enormously. Even to the point of state recognition. Europe and Germany, which have been holding back so far, will not be able to simply stand by and watch Chinese expansionist policies.


The planned Security Law for the Hong Kong Special Administrative Region is in fact a security law for the central power in Beijing. Its sole purpose is to keep the Communist Party in power. The Communist Party fears the freedom virus from Hong Kong even more than the corona virus from Wuhan. In order to stop the democracy movement in Hong Kong and to ensure that it does not spread to China, it would even take immense economic risks.

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