China-US relations

US-China friction, especially over Taiwan, could burn Hong Kong too

Eugene Kin-Keung Chan says Hong Kong should keep its eye on not only how the US-China tensions develop, but also how sternly Beijing responds to Washington’s moves to cosy up to Taiwan

PUBLISHED : Friday, 30 March, 2018, 11:17am
UPDATED : Friday, 30 March, 2018, 4:11pm

The new leadership of the United States and China has dramatically shaken up global geopolitics. Donald Trump’s unpredictability and fluctuating foreign policy has left many perplexed, if not on edge. Late last year, while on his state visit to China, he said Beijing has taken “advantage of another country for the benefit of its citizens”, and has become increasingly hostile towards China this year.

In China, having further consolidated his power through the “two sessions”, the annual meetings of the national legislature and the top political advisory body, President Xi Jinping continues to embark on the revival of the Chinese people. The country envisions unification with Taiwan, considered an integral part of Xi’s great revival dream.

China always reminds others of her resolve to defend her territorial integrity and sovereignty over Taiwan, a sacred part of the country – as is Hong Kong.

How an increasingly assertive China is pushing Taiwan closer to the US

Trump’s America, however, appears to stand in the way of China’s grand scheme, leading some to predict that the US and China will fall into the Thucydides Trap – when an established power’s fear of a rising power leads to war. Hong Kong must stay alert to ensure that it is not a collateral casualty in the crossfire, as the US and mainland China are two of its major trading partners, and Hong Kong should be cautious of being used as a pawn in the power rivalry.

By value, more than 60 per cent of Hong Kong’s re-exports originate from China, and, according to the census data, some 9 per cent of China’s exports to the US and about 7 per cent of its imports from America were shipped through Hong Kong’s port in 2016. Furthermore, Hong Kong’s currency is pegged to the US dollar. Any conflict between mainland China and the US leading to volatility in the US dollar will wreak havoc on our financial system.

Recently, the Trump administration imposed tariffs on US$60 billion worth of Chinese imports, followed by the sending of a missile-guided destroyer within 12 nautical miles of an island over which China has claimed sovereignty. However, Beijing will no doubt consider America’s signing into law the Taiwan Travel Act, which encourages visits by US senior officials to Taiwan, the most provocative step. China will not tolerate any attempt by a foreign power to separate Taiwan from China, especially under Xi’s leadership.

In his speech at the conclusion of the annual session of the National People’s Congress, Xi sent stern warnings to Taiwan’s separatists. In remarks that received thunderous applause from delegates, he warned that any attempt by Taiwan to be independent would be met “with the punishment of history”.

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Analysts believe that Xi is using a carrot-and-stick approach to make Taiwan succumb to Beijing’s unification plan. On the eve of the two sessions, China announced a total of 31 policies offering preferential treatment to the Taiwanese but it is widely speculated that Beijing will not shy away from using force should these tactics eventually fail to woo Taiwan.

Tam Yiu-chung has a point: Beijing’s Hong Kong policy will only get tougher

Xi’s red line for Taiwan also has relevance for Hong Kong. In the past few years, Hong Kong has seen growth of localism and separatism. Though held at bay now, intermittent voices clamouring for separation from China can still be heard.

Certainly Beijing would like a peaceful unification process with Taiwan. But this is seen as the last offer, and Beijing will wield the stick if Taiwan’s separatism grows. The same seems to apply to Hong Kong.

In his report at the beginning of the Two Sessions, Premier Li Keqiang vowed that Beijing would offer Hong Kong full integration into the nation’s grand development plan, but that any attempts to taunt Beijing’s stance on separatism would mean swift responses from Beijing. Hong Kong should remain an active participant in China’s pursuit of the Chinese dream.

Dr Eugene Kin-Keung Chan is president of the Association of Hong Kong Professionals