Another National Security Crackdown in Hong Kong

Happy Thursday! More than 30 years after they made their debut, the children’s entertainment group “The Wiggles” appointed their first-ever CEO this month. Some may question how it took this long to have someone steering the big red car, but we’re personally unsurprised that the group that brought us “Fruit Salad, Yummy Yummy” was operating purely on vibes this whole time.

Quick Hits: Today’s Top Stories

• National Security Council spokesman John Kirby said Wednesday that U.S. intelligence indicates the Iran-backed Islamic Resistance in Iraq was behind Sunday’s attack on Tower 22 in Jordan that killed three U.S. service members and injured more than three dozen, suggesting that it was possible a group under that umbrella, Kataib Hezbollah, perpetrated the attack—though he stopped short of directly assigning blame to the sub-group. The Islamic Resistance itself has claimed responsibility for the attack. President Joe Biden has not yet responded militarily to the strike, but the White House has suggested the retaliatory actions will come in phases. 
• The House of Representatives voted 357-70 on Wednesday night to pass the Tax Relief for American Families and Workers Act, expanding the child tax credit and restoring three business tax cuts. The $78 billion bill—which garnered support from 188 Democrats and 169 Republicans—increases the child tax credit amount while making it easier to qualify, and restores a research tax break that allows companies to recover costs of domestic research and development. The legislation heads next to the Senate, where it faces an uncertain future.
• The Federal Reserve held interest rates steady at a range of 5.25 to 5.5 percent on Wednesday, with Fed Chair Jerome Powell suggesting cuts were unlikely during the next meeting in March but would be possible later this year. “If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said following the meeting. “But the economy has surprised forecasters in many ways since the pandemic, and ongoing progress toward our 2 percent inflation objective is not assured.” 
• Leaders of several Big Tech companies—including Meta, Snap, and TikTok—testified before the Senate Judiciary Committee on Wednesday, where they faced bipartisan criticism from lawmakers for their companies’ alleged role in child exploitation and suicide. Meta CEO Mark Zuckerberg, during a line of questioning by GOP Sen. Josh Hawley of Missouri, apologized directly to parents in the audience of the hearing whose children were harmed by social media. During the hearing, several senators argued in favor of reforming Section 230, which prevents social media companies from being sued for the content on the platforms.
• Online retailer eBay agreed to a $59 million settlement with the Justice Department on Wednesday over allegations that the e-commerce company violated the Controlled Substances Act by illegally selling thousands of pill presses and encapsulating machines. Many of the pill press purchasers, the DOJ alleged, also bought molds, dies, or stamps that could have allowed them to create counterfeit pharmaceuticals. “While eBay acted lawfully and denies the DOJ’s allegations,” the company wrote in a statement, “we determined that this agreement is in the best interest of the company and its shareholders as it avoids the costs, uncertainty and distraction associated with protracted litigation.”

Hong Kong Under China’s Thumb

In the summer of 2019, pro-democracy protests broke out in Hong Kong over plans to allow criminal extradition from the city to mainland China. At the peak of the demonstrations, as many as 1.7 million people—a quarter of the total population—took to the streets. The protests stretched into early 2020 but were brought to a halt by the outset of the pandemic, affording the Chinese Communist Party (CCP) an opportunity to impose a restrictive national security law (NSL) on the city that some described as the end of Hong Kong.

This week, more than three-and-a-half years later, Hong Kong’s chief executive unveiled a new national security law that would build on the crackdown initiated by the 2020 order. The proposal, which will almost certainly be adopted, represents another step toward importing mainland China’s state suppression to Hong Kong.

John Lee, the city’s Beijing-aligned chief executive, proposed new legislation for Hong Kong’s own security law on Tuesday. Article 23 of Hong Kong’s Basic Law—the mini constitution enacted in 1997 at the end of British control that was supposed to preserve the city’s autonomy as a Special Administrative Region (SAR) of China—requires that laws be passed to prohibit acts interpreted as threats against China’s central government such as subversion or “foreign political organizations … conducting political activities in the region.” Hong Kong tried to pass such national security legislation in 2003, but backed down after widespread public outcry and protests.  

The Tuesday release didn’t include the exact legislative text under consideration, but it made clear that government officials are intent on expanding the kinds of restrictions introduced in the 2020 NSL. A more than 110-page public consultation document on the proposal outlined new criminal offenses and an expansive understanding of what conduct is implicated under national security provisions. “We propose to introduce a new ‘Safeguarding National Security Ordinance’ to comprehensively address risks endangering national security that the [Hong Kong Special Administrative Region] is facing at present and may face in the future,” the document reads. New offenses would include sabotage, treason, external interference, and insurrection—the last of which is a direct response to the 2019 protests. The ordinance would also expand the definition of what constitutes a state secret to include information on the “economic and social development” of Hong Kong, which could implicate international businesses working in the city once seen as a relatively safe conduit to investing in China.

Lee—who was selected to be chief executive in 2022 by a committee packed with pro-Beijing members and the only candidate allowed to run—argued that Hong Kong’s security situation demands action. “We can’t afford to wait,” he said Tuesday. “While we, society as a whole, look calm and look very safe, we still have to watch out for potential sabotage, undercurrents that try to create troubles.”

The rhetoric aligns with the mainland’s approach of using “national security” as a catch-all to justify severe restrictions and crackdowns on civil society and dissent. “There has been a persistent narrative from the Hong Kong government that foreign interference remains a problem even after the national security law,” said Ryan Neelam, director of the public opinion and foreign policy program at the Lowy Institute and a former diplomat who served at the Australian consulate in Hong Kong. “That’s been used to justify a lot of changes that have eroded Hong Kong’s autonomy and changed the way Hong Kong’s society operates.”

Official promotional materials for the proposal say the new ordinance “should achieve convergence, compatibility, and complementarity” with the 2020 NSL, with the new ordinance effectively covering any legal gaps left unaddressed by the previous law. “It’s an expansion of those restrictions in parallel with the Chinese laws now being implemented in the mainland, particularly the national security law in mainland China, the anti-espionage law, and the state secrets laws in the mainland,” Eric Lai, a nonresident fellow at Center for Asian Law of Georgetown University Law Center, told TMD. “The Hong Kong government is simply transplanting all these practices and these legal norms into Hong Kong’s common law system.” 

The 2020 NSL precipitated a systematic hollowing out of Hong Kongers’ freedoms and rights protections. “What we’ve seen happening in Hong Kong over the past three-and-a-half years since July 1, 2020, is just a fundamental transformation,” said Thomas Kellogg, the executive director of the Center for Asian Law. “You had a truly open, dynamic, robust civil society scene; amazing media scene; lots of great NGOs doing fantastic work; the only part of the [People’s Republic of China] that is able to commemorate the June 4th, 1989 Tiananmen Square massacre; and a very deliberate and relatively short-order dismantling of that civil society and the legal protections that underpinned it.”

Hundreds of pro-democracy activists, protesters, and former opposition lawmakers have been arrested since July 2020, and countless NGOs and rights groups have been closed or forced to relocate to outside of China. Independent newspapers have been shuttered, including Apple Daily, the publication founded by the self-made billionaire Jimmy Lai who is now on trial for national security charges. “You’ve had media organizations, one after another, local media organizations shut down or be raided by the police,” Neelam told TMD. “The sense that there’s a free press in Hong Kong, a local thriving, vibrant free press, that used to be there, there’s only a few outlets really doing that anymore, and the risks to them are certainly increasing. I could go on for a while, but basically [in] every sector of society, you could see the chilling effect, followed by raids, followed by high-profile arrests.”  

Hong Kong’s electoral process was also changed by the central government to kneecap any opposition to Beijing. In the spring of 2021, the National People’s Congress passed a resolution overhauling the elections for Hong Kong’s Legislative Council to ensure only “patriotic” lawmakers secure office. These changes halved the number of representatives directly elected by the people and increased the number of seats selected by the Election Committee, a body stacked with Beijing loyalists. Similarly antidemocratic changes regarding the election of local officials went into effect last year. “There’s no more genuine political opposition parties in Hong Kong that could run for elections,” Lai told TMD. “These were elements for the path to democracy in Hong Kong in the past, and now these elements are gone.”   

The crackdown has driven thousands of Hong Kongers to leave, with more than 123,000 people decamping to the United Kingdom. (In an ironic twist of fate, thousands of mainlanders are applying to move to Hong Kong, even in the face of worsening repression, as the city still offers more freedom and opportunity than the mainland.) But part of the new security law is also designed to target people who’ve left Hong Kong, particularly outspoken critics of the mainland. The consultation document includes language about the need to both prevent subversive individuals from “absconding” and address those who are already overseas, noting that officials may consider “adopting measures of sufficient strength to address, combat, deter, and prevent acts of abscondment, and to procure the return of absconded persons.”  

Businesses and investors may also need to reassess the risks of operating in Hong Kong. Lee argued Tuesday that the new national security measures were necessary so Hong Kong could “put [its] full efforts on improving the economy,” but the new ordinance could potentially drive investors away from the city. “The red lines have shifted,” Neelam told TMD. “They’ve been blurry, and does this move it further into the realm that creates new risks for businesses and expats, particularly with such a strong focus on foreign interference, which is hard to legally define? But there’ll be some concerns about what this does to Hong Kong as an international city.” The city’s stock index, the Hang Seng Index, has declined essentially for the last four years.  

The central government in mainland China has arrested foreign business executives on suspicion of espionage—in some cases, effectively “disappearing” individuals for years. In the past, Hong Kong’s separate legal system and due process protections provided a kind of buffer to the CCP’s harassment of businesses. But now that national security exceptions to Hong Kong’s legal safeguards are expanding, the fear is that the central government’s targeting tactics could reach international enterprises and their employees in the city. 

The full legislation will be introduced after an abbreviated public consultation period which ends on February 28—likely a formality given the makeup of the government. “We all expect that this bill will cruise to final passage by the Legislative Council,” Kellog said. “And in pretty short order.”

Worth Your Time

• Writing for the Free Press, Rupa Subramanya told the story of death row inmate Richard Glossip and his ongoing quest to end capital punishment in Oklahoma. “Glossip has been scheduled to die nine times,” Subramanya wrote. “He’s had three last meals. He’s said farewell to his wife, Lea, five times. And every time, he’s been granted a stay or an appeal—another chance. Now, a quarter-century after being convicted of a murder almost everyone agrees he is not guilty of, his long, tortuous journey is nearing its climax. All of which is to say that, in the not-too-distant future, Glossip, 60, will be dead, or he will be the man who brings down the death penalty in one of the most pro-death penalty states in the country. Or possibly, even, both.”

Presented Without Comment

Politico: House Republican Reported for Doing Pull-Ups at the Top of Capitol Dome 

Also Presented Without Comment

CNBC: Judge Dismisses Disney Lawsuit Against Florida Gov. Ron DeSantis Alleging Retaliation

Also Also Presented without Comment

Axios: Congress Tries to Address Surge of Swatting Incidents

“In a letter addressed to congressional spouses, a copy of which was obtained by Axios, House Sergeant at Arms William McFarland wrote that there has been an ‘increased number’ of swatting incidents at members’ personal residences. McFarland said his office ‘will be planning a virtual conference to discuss swatting with congressional staff,’ and—at upcoming party retreats—he will ‘personally be on hand’ to discuss security matters with spouses.”

Toeing the Company Line

• In the newsletters: Scott argued (🔒) vague laws are to blame for Biden’s ability to pause liquefied natural gas exports, Andrew and Drucker reported on an effort to get Democrats and independent voters to vote for Nikki Haley, and Nick wondered (🔒) if the 2024 election vibes are starting to shift.
• On the podcasts: After Sarah and David dive into some Supreme Court gossip on the latest episode of Advisory Opinions, Sarah is joined by Judge John K. Bush of the Sixth Circuit Court of Appeals to discuss the method and merits of the “history and tradition test.” On The Remnant, Jonah talks with Peter Berkowitz, a senior fellow at the Hoover Institution.
• On the site today: Drucker considers whether New Hampshire Gov. Chris Sununu has a GOP future after being Haley’s right-hand man, and Carl Graham explains how the military prepares joint operations.

Let Us Know

Should businesses operating in Hong Kong voice their support for the city’s autonomy at risk of hurting economic ties with China?