Washington Urged to Reassess Hong Kong Policy: CSIS Report

People walk past Hang Seng Bank in Central Hong Kong on Jan. 19, 2024. (Bill Cox/The Epoch Times)

Washington has been urged to reassess its policy toward Hong Kong as the city’s autonomy is being further eroded by Beijing.

On May 7, the U.S.-based think tank Center for Strategic and International Studies (CSIS) released a 40-page research report, painting a stark picture of Beijing’s tightening grip on the semi-autonomous territory and urging the American government to reassess its Hong Kong policy.

Titled “The Erosion of Hong Kong’s Autonomy since 2020: Implications for the United States,” the CSIS report is based on an extensive research trip. Two of the co-authors, Jude Blanchette and Scott Kennedy, visited Hong Kong in September 2023. Over nine days, they conducted 35 interviews with a wide range of stakeholders, including authority representatives, former Hong Kong officials, LegCo members, executives from local and multinational companies and financial institutions, university professors, local and international journalists, NGO leaders, and public interest legal experts.

The report first emphasized Hong Kong’s importance to the United States by listing relevant data.

The former British colony is the 15th-largest export market for the United States and a top destination for American consumer products. As of 2023, approximately 1,300 American companies were based in Hong Kong, with banks, law firms, accounting firms, and other financial services the most prominent among this group. Additionally, roughly 84,000 Americans live in Hong Kong, while about 250,000 Hong Kong-born immigrants live in the United States.

The bilateral relations go beyond commercial and people-to-people ties, considering that Hong Kong has long served as an entrepôt between the United States and the rest of the communist China “playing a critical role in trade, investment, finance, travel, and legal services.”

Resilience and Erosion of Autonomy

A pervasive erosion has been observed across Hong Kong’s various sectors, including the legal and political systems, civil society, and the business environment, according to the report. Under the leadership of Xi Jinping, the Chinese Communist Party (CCP) has intensified its suppression of dissent, curtailing fundamental freedoms and undermining the rule of law in the city.

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“Hong Kong is not yet like a regular city in mainland China, but the trajectory is clear and worrying,” reads the summary. “Areas of resilience remain, but in ways that look largely unsustainable, for example, coming down to the impressively brave behavior of discrete individuals, such as university administrators fighting off curriculum changes.”

Based on an analyst’s sharing, Hong Kong’s current situation seems closer to how Chinese cities operated in 2004–05 under former CCP leader Hu Jintao, who was escorted out of CCP congress in 2022 under Xi’s cemented control, “when governance was less ideologically oppressive, there were more open consultations with government authorities, civil society organizations were constrained but growing, and village leaders were chosen through direct elections.”

Suggestions for Washington

In response to the alarming developments, the authors outlined three policy options for the American government: punitive measures, revocation of Hong Kong’s special treatment, and strategic engagement.

The first option involves targeted sanctions against Chinese and Hong Kong officials complicit in the erosion of autonomy, aimed at raising the cost of Beijing’s aggressive actions. This strategy is also what the American government has been doing in the past few years, as shown in the sanction of Hong Kong Chief Executive John Lee.

While some urge Washington to go further—for example shutting down or limiting privileges of Hong Kong Economic and Trade Offices in the United States or imposing new sanctions on individuals involved in Article 23 formulation—the report cautions that such measures could inadvertently push Hong Kong officials closer to the Chinese leadership.

The second option entails the gradual revocation of Hong Kong’s special status under American law, treating the territory as an integral part of China. This approach has already been showcased under the Trump administration’s decertification of Hong Kong’s special status in 2020. U.S. Customs and Border Protection required all goods imported from the city to use the label “Made in China,” rather than “Made in Hong Kong.”

While the approach may signal a firm stance against Beijing’s encroachments, it risks “accelerating Hong Kong’s loss of autonomy in every dimension.”

“Beijing will likely conclude it has no choice (or even see this as an opportunity) but to install the CCP more rapidly and make other changes to Hong Kong’s political economy (including eliminating the Hong Kong dollar, for example).”

The third option advocates for strategic engagement, leveraging diplomatic and economic ties to preserve Hong Kong’s unique identity and remaining freedoms. By maintaining pragmatic interactions with the territory, the United States aims to provide a lifeline for Hong Kongers seeking to uphold their way of life amidst growing authoritarianism.

“This approach, even while creating immigration and asylum pathways for Hong Kong residents wishing to leave, recognizes that the vast majority will stay in the city—and it is important to support their freedoms. It also recognizes the value that people from all sides in Hong Kong place on a strong and unique relationship with the United States.”

Frances Hui of the Committee for Freedom in Hong Kong Foundation speaks during a press conference discussing the implications of the Safeguarding National Security Bill (Article 23 legislation) at the House Triangle near the U.S. Capitol building in Washington on March 22, 2024. (Madalina Vasiliu/The Epoch Times)

In conclusion, the CSIS report underscores the urgency for the United States to adopt a nuanced and multifaceted approach toward Hong Kong. As the international community grapples with the escalating crisis in Hong Kong, the stakes have never been higher in preserving the city’s autonomy and safeguarding the aspirations of its people.

A policy built entirely around punishments or giving up on Hong Kong would be counterproductive and result in the further undermining of whatever autonomy remains, the authors concluded.

“Spots of resilience persist, and the best policy approach to managing the challenge of Hong Kong will be rooted in a strong understanding of how its citizens, government authorities, businesses, and civil society organizations envision their city’s future,” reads the report.

“Washington would be wise to focus on sustaining what space remains for civic engagement, foreign interaction, and political debate. Such an approach will require patience and persistence, but it lies firmly within U.S. interests.”

Leo Cheung contributed to this report.