Net loss and no gain in bill pushEditorial | Central Station 9 Sep 2019
The US Congress returns from recess today. Nearly everyone across Hong Kong society, from the government to the opposition, is monitoring whether the Senate and House of Representatives will give priority to the Hong Kong Human Rights and Democracy Act as soon as the session resumes.
The proposed bill will have far-reaching effects on the SAR.
As thousands marched yesterday to the US consulate in Garden Road in Central - demanding the proposed bill be passed to sanction individual Hong Kong officials - hundreds splintered from the march to vandalize MTR facilities. Meanwhile, little was said about the downside the bill could mean.
The bill is an amendment to the Hong Kong Policy Act of 1992 that accords Hong Kong preferential treatment economically. For example, because of this, our exports to the United States are spared the trade war tariffs currently imposed on mainland products.
If passed, it would largely curtail the international status now enjoyed by the SAR, formally tying the preferential treatment to local human rights records and democratic progress in 2020, and requiring the US president to report to Congress each year to justify continuation of those privileges.
In particular, individuals held responsible for suppressing human rights would have their US assets frozen.
That means a much higher political risk for doing business here, as the act would make the SAR's unique tax position uncertain since it would subsequently be reviewed annually. As for the foreign companies already operating here, while their operations would continue, will they look elsewhere to diversify their investment to reduce the risk in the long term?
As for new investors, they may simply choose Singapore to base their regional headquarters due to the increased political risk.
The demonstrators hoped that with the bill, the US Congress could put pressure on Chief Executive Carrie Lam Cheng Yuet-ngor and Beijing policymakers to soften their crackdown on anti-government protests and accelerate local democratic reforms.
However, it's more likely than not that this is just pie-in-the-sky wishful thinking.
While freedoms and substantive progress in democratic reforms are what people want, the cost of pushing for them in the form of the Human Rights and Democracy Act could be unwisely high. In the worst case scenario, Hong Kong may lose both - no preferential trade status and no democracy.
It can be negative because communist cadres in Beijing would tighten rather than relax their control over Hongkongers' freedoms. Former Legislative Council president Jasper Tsang Yok-sing knows Beijing better than anyone. His doubt that Zhongnanhai would ever bow was based on his understanding of the communist party.
At the same time, once the bill is passed, Hong Kong would instantly lose its special trade status that is guaranteed by the Hong Kong Policy Act, putting jobs at risk and affecting the lives of many families.
Hong Kong's current situation is extremely bad and the chief executive can't escape blame.
Nonetheless, asking the US Congress to intervene with a piece of US legislation will do the SAR greater damage than good. Reforms can only start from within - not assisted by outsiders.