HONG KONG PROTEST MONITOR 11 December 2020

11 december 2020

THE SITUATION NOW

There has been a significant drop in the incident volumes of street-level protest activities across December, which includes the previous two monitoring cycles. This is very likely influenced by recent high-profile arrests of prominent pro-democracy activists Agnes Chow, Joshua Wong and Ivan Lam in Hong Kong. Additionally, the Hong Kong authority’s targeting of exiled ex-pro-democracy legislator and activist Ted Hui by freezing his and his family’s accounts at the international bank HSBC have also undoubtedly unsettled members of the movement, especially those that have been transferring their financial assets outside of the territory under the assumption of physically leaving.

Coronavirus (COVID-19)-related restrictions, coupled with the stringent enforcement of the national security law (NSL), continue to serve as a useful deterrence against protest activity. During the recent reporting period (4-10 December), there were no significant protests that took place. Even the lone activists ‘David’ and ‘Captain America’, two individuals who have spearheaded the movement publicly during the operational pause of the broader activist movement, were inactive.

As there were no demonstrations, there was a significant shift in the volume of event reporting towards the Hong Kong police executing raids and arrest operations against pro-democracy activists and their supporters, and the international reactions these have generated.

On Monday (7 December), Hong Kong police’s new national security unit arrested eight male individuals, comprising of students, social workers, and local district councillors, over alleged participation in unlawful assembly on 19 November at the Chinese University of Hong Kong. Three of those arrested were also accused of chanting slogans, holding up banners, or spray-painting messages promoting Hong Kong independence, a possible breach of the NSL.

The arrests of the eight individuals is occurring amid a broader clampdown by Hong Kong authorities on the pro-democracy movement. More arrests are very likely in the foreseeable future.

On Tuesday (8 December), the police executed raids at the Good Neighbourhood North District Church, seizing documents and cell phones, arresting two individuals over alleged fraud and money laundering. The authorities accused them of underreporting sums raised by a crowdfunding campaign in 2019. However, this is a likely pretext to target church members who have provided voluntary aid to activists during the anti-extradition/pro-democracy demonstrations in 2019.

The Good Neighbour North District Church, a Hong Kong church whose volunteers have given humanitarian aid to pro-democracy demonstrators, on Tuesday said that HSBC accounts of the church and the pastor and his wife were frozen on Monday without explanation. The church called the move a political reprisal and urged HSBC to unfreeze the accounts.

Hong Kong’s High Court on Wednesday (9 December) denied bail to prominent pro-democracy activist Agnes Chow pending an appeal against her 10-month jail sentence on charges linked to unauthorised assembly during anti-government demonstrations in 2019. The denial of bail to Chow was anticipated and is significant. Her arrest adds to a growing list of prominent pro-democracy figures and outspoken critics.

These arrests are a stark message to the movement aimed at dissuading mobilisations and to those engaging in subversive activities that seek to undermine the authority of Hong Kong and Beijing. Coupled with COVID-19 restrictions, enforcement of the NSL has indeed deterred street-level protest activities. From a local economic perspective, there is an increasing number of highly-skilled workers who are deeply concerned over the erosion of democratic freedoms looking to relocate outside the territory.

 

Geopolitics and the local implications

Geopolitical tensions with China and Hong Kong are increasing, and this is likely to impact firms operating in Hong Kong.

On 7 December, US Secretary of State Mike Pompeo announced sanctions against senior leaders of China’s National People’s Congress in connection with the imposition and implementation of the NSL. The sanctions target the 14 vice-chairpersons of the National People’s Congress Standing Committee (NPCSC), the legislature’s senior decision-making body. The targeted individuals and their immediate family members are banned from travelling to the US. Furthermore, US persons are generally prohibited from doing business with them, while any US assets they hold are frozen. Responding to the announcement, Chinese foreign ministry spokeswoman Hua Chunying said that Beijing would take ‘firm counter-measures’ against the US’s ‘malicious’ actions.

The US House of Representatives voted on Monday to permit Hong Kong residents to live and work in the United States for a limited period. Under the proposed Temporary Protected Status legislation, which is expected to be endorsed by the US Senate in the coming days, Hong Kong residents will be given the right to work in the country for at least five years and will not be subject to deportation during this period. The US move follows commitments by the UK and Canada to offer citizenship or relaxed immigration requirements to Hong Kong residents.

The US offer is certain to further exacerbate worsenning relations with China, while confirming Beijing’s view that key Western powers are undertaking collective action against what it asserts are its domestic affairs.  However, the US offer amounts at present to little more than an extended visa with no indication of the status of Hong Kong residents at the end of the stipulated period. China can be expected to emphasise this point, which many Hong Kong residents will already have recognised as a disincentive compared to the more opened-ended UK, Canadian and some European Union settlement offers. While Beijing may take action against US interests within China, there could also be a reaction in Hong Kong to what can be characterised as a political rather than humanitarian offer resulting in US interests in the territory being targeted.

Additionally, the latest sanctions have compelled Beijing to pledge retaliation, but these are likely to be limited in scope and do not affect the broader commercial relationship between the world’s two largest economies. Given the precedent, China is highly likely to retaliate through almost-reciprocal measures, potentially targeting senior US lawmakers assessed as hostile to China’s interests. Despite next month’s change of US administration, the prospects for an immediate improvement in relations are low, given bilateral consensus in Washington over disputes with Beijing. Beyond Hong Kong’s political status, these include longstanding opposition to Chinese trade policies, as well as concern over Beijing’s treatment of ethnic Uyghurs and military developments in the South China Sea. Organisations with interests in US-China relations, particularly with regards to Hong Kong’s future political and commercial environment, should monitor updates and assess their impact on operations and planned investments.

On Monday (7 December), former pro-democracy legislator and activist Ted Hui, who is in self-imposed exile in the UK, said that some of his bank accounts had been unfrozen and he had quickly transferred funds from his HSBC accounts. Hui’s family members also had their accounts frozen, presumably by the Hong Kong authorities. It is unclear if they were unfrozen. Hong Kong police on Sunday said they were probing an unspecified Hong Konger that had fled overseas with frozen bank accounts over suspected money laundering and potential breaches of the NSL. This individual is believed to be Hui.

Police on Monday confirmed that the freeze was conducted as a probe into alleged embezzlement via Hui’s and his family members’ accounts. Prior to this, on Sunday (6 December), police had accused Hui of embezzling money from a crowd-funding campaign and colluding with foreign forces, considered a violation of the NSL. Chief Executive Carrie Lam on Tuesday denied allegations that the freezing of the accounts were guided by political retaliation.

UK authorities are closely following Hui’s situation given that such punitive measures may also impact other political dissidents, non-activist Hong Kongers and businesses with UK ties. Hong Kong banks have already faced significant criticism in the UK over the support for the NSL. Labour Party politicians in the UK have been especially outspoken about threatening boycotts of UK-based banks in Hong Kong akin to boycotts during South Africa’s Apartheid. UK secretary of state Dominic Raab has been under increasing pressure to target HSBC and Standard Chartered over concerns arising from the banks’ backing of the NSL.

The developments relating to HSBC’s freezing of bank accounts of individuals associated with the pro-democracy movement is certain to elevate concerns that the UK-based bank is being used by Hong Kong authorities to enact politically motivated retaliation, while undermining international confidence in the territory’s legal and financial system. Such concerns will add further impetus to the UK to enact boycotts against banks viewed as infringing on democratic principles and potentially damage the image of Hong Kong’s once thriving finance sector. This year marked the first time that the number of international firms operating in the territory declined, especially SMEs in the tech sector and larger financial companies. This trend is likely to accelerate over the coming months.

Western governments have called for the formation of a united international response against China over issues including the situation in Hong Kong;  momentum for such a development is likely to increase once president-elect Joe Biden is sworn into office in January 2021. Movement towards a coherent and systematic Western response is certain to complicate trade ties, with significant implications for international businesses.

Jake Sullivan, president-elect Joe Biden’s anticipated pick for national security adviser, on Tuesday posted a tweet expressing that he is ‘deeply concerned’ about the suppression on pro-democracy activists. The tweet suggests that the situation in Hong Kong is likely to remain an important aspect of the Biden administration’s foreign policy agenda, with significant implications for international businesses, particularly those with links to the United States. A continued tough stance on China is likely under Biden, particularly given broad bipartisan support for such a stance. However, it is expected that the Biden administration’s approach will be more multilateral and coherent, in contrast to the Trump administration’s transactional and unilateral approach. Biden’s approach is likely amenable to more stable bilateral relations and augurs conditions more favourable to the foreign business community.

A recent report by Bloomberg News, which used  data from a Freedom of Information Act request, indicated that the UK Passport Office has issued over 200,000 British National (Overseas), or BN(O) passports to Hong Kongers in the first ten months of 2020, equating to a rate of approximately five a minute.

In October, the UK issued around 60,000 such passports, over a 50 per cent spike from October 2019 and more than any year since 1997. Chinese foreign ministry spokeswoman Hua Chunying on 4 December accused the UK of meddling in China and Hong Kong’s domestic affairs. Should China decide to halt its recognition of BN(O) passports, as previously threatened, this would have very clear and decisive ramifications on international travel for employees of businesses with UK ties.

In a meeting on Wednesday (9 December) to finalise the BN (O) passport settlement scheme for Hong Kongers, UK Home Secretary Priti Patel met for the first time with Hong Kong pro-democracy activists in self-imposed exile. Patel, who promised to ‘stand by’ Hong Kongers and defend their freedoms, is also the first UK cabinet minister to meet former Hong Kong legislator and prominent activist Nathan Law after he fled to the UK in July. The Hong Kong government condemned the meeting and accused the UK government of breaching the Sino-British Joint Declaration by providing Hong Kongers with the BN (O) settlement scheme.

The meeting between Hong Kong pro-democracy activists and the UK’s home secretary is likely to further foment geopolitical tensions between China and the UK over Hong Kong. The BN(O) scheme in particular has drawn the ire of Beijing, with a recent Bloomberg News report outlining a marked increase in issuance of BN (O) passports over 2020. The meeting may increase the likelihood that China will stop recognising BN(O) passports as threatened in the past, with significant implications for international travel by staff of UK-linked businesses.

On 8 December, former chairman of the Danish Conservative People’s Party Youth Committee, Anders Storgarrd, said he was proud of having been able to ‘trick a communist superpower’ by facilitating pro-democracy legislator Ted Hui’s escape from Hong Kong to Denmark and on to the UK. Hui was able to regain his confiscated passport after Danish parliamentarian Uffe Elbaek provided official documentation supporting Hui’s official visit to Copenhagen last week to participate in an unofficial conference on climate change. Danish prime minister Anders Fogh Rassmussen and other politicians assisted Storgaard in devising a fake itinerary for Hui’s visit to provide to Hong Kong police.

Danish politicians’ facilitation of Hui’s escape is in the immediate-term likely to strain diplomatic relations with China, and compel Beijing and Hong Kong authorities to tighten scrutiny against Danish businesses. Chinese foreign minister Wang Yi responded to a visit by Czech senate leader Miloš Vystrčil to Taiwan in August with sharp criticism that prompted heavy disapproval from German counterpart Heiko Maas. Given Beijing’s continuing so-called wolf warrior diplomacy, similar responses against Denmark over Hui are possible. Recently, the Chinese government has been criticised after one of its official government Twiter accounts posted an image alluding to alleged war crimes by Australia.

Also on Wednesday, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on Wan Kuok Koi, a leader of the Hong Kong-based 14K triad organised criminal group, and three entities associated with him. In a statement, OFAC said that Wan, also known as ‘Broken Tooth’, was designated for alleged corruption, and that 14K is involved in illegal activities such as drug trafficking, illegal gambling, racketeering, and human trafficking. The sanctioned entities were the Cambodia-based World Hongmen History and Culture Association, Hong Kong-based Dongmei Group, and the Palau-based Palau China Hung-Mun Cultural Association.

The US sanctions were imposed on ‘International Anti-Corruption Day’ under the Global Magnitsky Human Rights Accountability Act, which targets those accused of serious corruption and human rights abuses abroad. As part of the sanctions, OFAC accused Wan of co-opting elite figures in Malaysia and Cambodia and claimed that overseas Chinese actors sought to cover for illegal criminal activities by framing them under China’s Belt and Road Initiative (BRI) and other Chinese Communist Party (CCP) initiatives. Practically, the sanctions prohibit US persons from transacting with Wan, while freezing any US-held assets and banning him from entering the US. Given OFAC’s identification of BRI and other CCP initiatives as potential cover for illicit activities, as well as bilateral tensions, there is a high likelihood of further US sanctions targeting Chinese individuals involved in BRI initiatives globally. Organisations with interests in US-China relations and BRI projects should monitor updates and assess how the increasing threat of US sanctions impacts operations and strategy.

A day later on Thursday (10 December) Beijing responded with its own sanctions on unspecified US officials and the withdrawal of visa-free travel into Hong Kong and Macau for US diplomatic passport holders as a reprisal for US sanctions on Chinese officials announced on 7 December. The US officials include those in executive and legislative branches and their immediate family members, as well as NGOs.

In the immediate-term, Beijing’s measures are set to complicate US diplomatic travel and mark a worsening of already tense bilateral relations between China and the US. Hong Kong is likely to remain a significant hurdle towards the stabilisation of US-China relations under the US’ upcoming Biden administration. Additional measures against China over Hong Kong and reciprocal actions are likely against the backdrop of continuing arrests of activists and apprehension about the territory’s evolving legal and financial system under the NSL. Companies with interests in Greater China should factor continuing geopolitical tensions over Hong Kong and concomitant business risks into their strategic and operational planning.

 

Operational implications from COVID-19

On Sunday (6 December), Hong Kong reported at least 100 new coronavirus cases, the fourth occasion in the past week when triple-figure daily infections were recorded.  At least 30 case were untraceable and the majority locally transmitted. Local public health officials warn of an ‘explosive outbreak’ soon unless new infections can be reduced through further restrictions. 

The government has already imposed measures greatly restricting social gatherings, reducing their options beyond ordering local or territory-wide lockdowns that would almost certainly meet public and commercial resistance.

On Wednesday (9 December) Hong Kong recorded at least 104 new coronavirus cases, 99 locally acquired infections including 35 with no known source. There have been triple-figure daily infections recorded over the past week, almost all of which have been locally transmitted.  The government has responded to what it calls the ‘fourth wave’ of the virus by re-imposing a wide ranging of restrictions intended to enforce social distancing. From Thursday all government-run leisure facilities and beaches will close until further notice, five weeks after they were reopened following a previous lockdown.

Local public health officials warn of an ‘explosive outbreak’ soon unless new infections can be reduced through further restrictions.  The government has said it plans provide free COVID-19 vaccines to the entire population, with three million from the territory’s 7.5 million receiving them by mid-2021.


THE WEEK AHEAD

There are no street-level demonstrations scheduled for this reporting cycle (11-17 December); however, this does not mean a complete retrenchment in planning and execution of mobilisations, especially ad hoc or short-notice events such as flash-mob rallies or activities by prominent activists including David and Captain America. Much of the focus is still likely to be trained geopolitical developments and COVID-19 reporting and activities.

The monitoring period is likely to see incremental ratcheting up of diplomatic tensions between Hong Kong and Beijing on one side and US and Western allies on the other. In the US, the administration of President Donald Trump is unrestrained in its punitive measures, especially during this ‘lame duck’ phase of the tenure. There have been continual signals that his administration will enact measures, potentially including executive orders and by administrative fiat, aimed at punishing China and Hong Kong but also intended to tighten the guardrails of the incoming Biden presidency. These are likely to incur temporary pain or nuisance across the divides on directly targeted entities, with secondary and tertiary effects on associates. The activities, however, are unsettling for the business community, and likely to remain so until the new administration commences in January.

At risk of further retaliation, if not limited to symbolic gestures from Beijing and Hong Kong, will be Denmark and Danish interests in the territory. Beijing and Hong Kong have a number of options at its disposal that are very much likely to fit within the normal punitive, yet limited, measures previously enacted. This could include travel embargoes of prominent Danish citizens and possible harassment of dual nationals in the territory and Greater China. The UK government, British businesses and its citizens are also at risk of punitive measures, particularly if London continues accelerating the exodus of Hong Kongers and providing more legitimacy to the pro-democracy movement through formal engagements with the government of Prime Minister Boris Johnson.

COVID-19 case numbers continue to rise across the territory, compelling the authorities to impose tighter restrictions. If cases number rates continue to rise, the imposition of territory-wide lockdown cannot be ruled out.  

See details of upcoming protests below.


UPCOMING PROTESTS 11 - 17 December

Monday 14 December

0930: David will appear at the Lai Chi Kok Reception Centre, New Kowloon for a 'Support Jimmy Lai wit You' protest.

1100: David will hold a protest called 'Greeting to the Confirmed cases on the Police Force' at the Airport Police District Station, Chek Lap Kok. 

1315: David will hold a 'Lunch with You and Reading Apple Daily at Causeway Bay' at Hysan Place, Causeway Bay, Hong Kong Island. 

1500: David will appear at the Government Office, Central district, Hong Kong Island, for a 'Oppose the Liberal Studies Being Reform' protest. 

1800-2100: David will hold a protest called 'Report to the Police Station with You' at the Tsing Yi Police Station, Tsi Ying Island. 

Outside of this reporting period:

Thursday 24 December

TBC: Pro-democracy activists are calling for flash-mob style rallies in Kowloon dubbed ’12.24 May I Return to Hong Kong with Peace and Good New with You’. Details on locations are likely to announced at least an hour before the start.

 

PROTEST CHRONOLOGY 4 – 10 December

No significant protests were reported.

 

 

END REPORT