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Hong Kong is facing a major political crisis amid repeated street protests and mass demonstrations. The political crisis, triggered by now-suspended Hong Kong government’s extradition bill which would allow extraditions to mainland China and Taiwan, swell as Hong Kong residents demand the bill’s full withdrawal, an independent inquiry into police actions toward protesters, greater autonomy and an amnesty for those arrested in clashes between demonstrators and police. The protests which started in June, with hundreds of thousands of Hong Kong residents taking to the streets for peaceful demonstrations have taken a violent turn in the recent weeks with demonstrators storming government headquarters and blocking roads to the territory’s airport thereby disrupting the operation of the major Asian transport hub. The Chinese central government has stated it as “the worst crisis in Hong Kong” since the handover in 1997.

Reasons for the outcry

Hong Kong, a former British colony in south-eastern China, has long enjoyed a special status under the principal “one country, two systems”. The Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China is the constitution of the Hong Kong Special Administrative Region and a national law of the People’s Republic of China. According to it, Hong Kong will retain its common law and capitalist system for 50 years after the handover by Britain in 1997.

But there are fears that China is extending its influence over Hong Kong long before this deadline. Hong Kong has seen rapid changes in its 22 years under Chinese rule. The city’s government, along with Chinese officials have pushed for closer links with Chinese mainland through massive infrastructure projects, changes in education and deeper business ties. The region has also become increasingly politically polarised, as nearly every event has been seen to harbour a hidden agenda for one side or the other.

In February 2019, with the Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation (Amendment) Bill 2019 being proposed by the Hong Kong government, protesters saw the move to try Hong Kong citizens under Chinese law as deeply problematic. It could have been used by authorities to target and extradite political enemies and allowed greater influence of mainland China in the region’s affairs. But there are other issues at stake too. Pro-democracy advocates believe their leaders should be elected in a more democratic way that reflects the preference of voters. The chief executive is currently elected by a 1,200-member election committee - a mostly pro-Beijing body chosen by just 6% of eligible voters. This has led to the demand for resignation of the Chief Executive Carrie Lam and the implementation of the universal suffrage for the Legislative Council and the Chief Executive Elections, which the citizens were earlier promised will come in effect by 2017.

Hong Kong’s economic worries

Hong Kong businesses fear protests will push the economy into recession and could destroy the city’s cherished entrepreneur status. The tiny island has a GDP bigger than many industrialised countries, low tax and abundant cheap labour, and is a world-class financial centre boasting a stock market with a total value of more than £2.5tn. The city’s most powerful vested interests are deeply worried after 13 weeks of street protests which have paralysed the city. With the slowdown in the Chinese market and the country’s growing trade war with the US, the city was already under stress in terms of economy. The three months to June were the weakest since 2009. Retail sales fell by 6.7% in June and tourist numbers crashed by 13% in the same month. The American Chamber of Commerce in Hong Kong in June mentioned that companies have already reported “serious consequences from the disruption,” including lost revenue, disrupted supply chains and shelved investments. The aviation and the tourism markets have been the worst affected.

Beijing’s stance on the political crisis

China’s response till now has been fairly subdued. That may be because China is benefiting from not appearing to be involved. Though over the past week, it has implied that it might intervene to end the demonstrations by moving military equipment and personnel to a sports centre in Shenzhen, China, that is visible from Hong Kong. Beijing has argued that it is not directing Lam’s response but is prepared for providing assistance. Beijing has also enlisted pro-China tycoons in Hong Kong as part of its efforts to control local opinion. China seeks to shape the narrative in its favour. Yang Guang, a Chinese spokesman for the Hong Kong and Macao Affairs Office recently stated, “The protests showed signs of terrorism.” He also suggested that they were the real threat to rule of law.

For Beijing, the question is whether they want to destroy Hong Kong. If they interfere directly, it spells the end of one country, two systems. Officials in Beijing are increasingly critical of the protests. Memories of the 1989’s crackdown on Tiananmen Square’s pro-reform movement shadow the current unrest, raising the question of how far the Beijing authorities will go to crush the present crisis.