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Apple Daily Forced Closure; U.S. Advisory to Businesses; Hong Kong as a geopolitical issue, and more. 
July 28, 2021
​CFHK’s last newsletter reported on the June 17 arrests of top Apple Daily editors and executives, the raid on the newspaper’s offices and seizure of reporters’ notebooks and computers, and the freezing of company accounts using the unfettered powers of the National Security Law (NSL). Days later, on June 23, the newspaper’s board of directors announced the government’s actions would force Apple Daily to stop publishing. Despite having ample funds to keep operating, the order freezing the bank accounts by the U.S.-sanctioned official, Chief Secretary John Lee, prevented Apple Daily from paying staff and vendors, and put it in jeopardy of violating Hong Kong labor laws.
 
On the night the staff put out the newspaper’s final edition, crowds gathered at Apple Daily’s offices.
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Click on Tweets above to read full thread with videos via @XinqiSu on Twitter.

In the early morning hours, Hong Kongers stood in long lines around newsstands for hours to buy copies. 
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Click on Tweet above to watch video via @maryhui on Twitter.

The persecution of Apple Daily and its staff continued with the arrest at the airport, a few days later, of an editorial writer who was attempting to fly abroad to safety. The newspaper’s founder, Jimmy Lai, has been a priority target of the Chinese Communist Party and is serving prison sentences for peaceful protest and the first of three trials under the NSL.

Apple Daily’s forced closure was a devastating blow to press freedom and the rule of law and also, therefore, to Hong Kong’s status as an international financial center. Gordon Crovitz and board member Mark Clifford wrote that what happened to Apple Daily could happen to any company in Hong Kong.            
 
“The way the authorities undermined the functioning of equity markets, property rights and contracts is a warning for other companies that are publicly traded in Hong Kong or simply doing business there….

“The National Security Law empowers one official to make it a crime for a publicly traded company to operate, even when no one has been convicted or even charged with a crime. Mr. Lee justified these steps by claiming articles published by Apple Daily violate the security law. Arrested Apple Daily journalists and executives were interrogated about more than 100 news stories and opinion pieces, articles and videos by Mr. Lai and others, and on its English-language website. But authorities refused to disclose a list of allegedly offending articles, making it impossible to know the basis of any charges….

“This story of what happened to Apple Daily is only partly about undermining the free press. It’s more broadly a warning of what can happen to any company operating in Hong Kong that the authorities claim committed some offense under the vague terms of the National Security Law.

“There is sad irony in what happened to Apple Daily. Hong Kong was transformed from a barren rock to a world business and financial center by immigrants from mainland China, such as Mr. Lai, who flourished under the rule of law developed when Hong Kong was a British colony. The free flow of information enabled prosperity and broad freedom. Now, Hong Kong shares and bank accounts can be frozen on the order of a single official, destroying private enterprise as well as freedom.”


Read the entire WSJ opinion piece here. 

CFHK’s statement on the forced closure of Apple Daily appears here.
 
For The Dispatch, CFHK President Ellen Bork wrote:
 
“Businesspeople may feel they can sidestep landmines and moral quandaries by indulging Beijing in the way Taiwan is described on an airline website, or by firing an employee for a tweet about Tibet. But these are examples of a much larger problem. Chinese Communist leaders’ perceptions of their interests are expanding, not contracting, to include not only new geographic areas, like the South China Sea and northeast India but also the party’s definition of human rights and national security.” 
 
Read the full opinion piece here, and watch CFHK board member Mark Clifford’s interview with the BBC here.

The Biden Administration's Warning to U.S. Businesses in Hong Kong

Apple Daily’s forced closure figured prominently in the Biden Administration’s July 16 Hong Kong Business Advisory, “Risks and Considerations for Businesses Operating in Hong Kong.” The Advisory warns U.S. businesses of the “potential reputational, regulatory, financial, and, in certain instances, legal risks associated with their Hong Kong operations.”  
 
In a nutshell, the Biden Administration has told American businesspeople (1) that they and their companies are profoundly vulnerable under China’s expansive, vague concept of national security that does not respect the bounds and norms of Hong Kong’s formerly revered judicial system; and (2) that they must comply with U.S. law -- including sanctions on Chinese and Hong Kong officials -- even while China’s government is adopting measures that pressure them not to.
 
The Advisory, issued by the State, Treasury, Homeland Security and Commerce Departments,  explains crucial aspects of the new national security regime that bring Hong Kong’s legal system into closer alignment with the mainland’s, despite the guarantee of the 1984 Sino-British Joint Declaration’s provision that Hong Kong courts would remain independent. Among the most disturbing features of the system: a parallel national security system with judges designated for NSL cases; an Office for Safeguarding National Security (OSNS) staffed by PRC security services under Beijing’s direct control; authorization of PRC security services to collect data in Hong Kong; and the power to confiscate travel documents and prevent exit, including of foreign nationals, from Hong Kong.  
 
Read the Biden Administration’s Hong Kong Business Advisory, “Risks and Considerations for Businesses Operating in Hong Kong” here:     
 
The Biden Administration’s Advisory continues the major shift in Hong Kong policy that began when the Trump Administration determined that Hong Kong was no longer sufficiently autonomous to merit separate treatment in U.S. law. For decades, the position of the U.S. was that Hong Kong’s value as a financial center would protect Hong Kong’s autonomy because the CCP would not interfere with the rule of law and other attributes that make Hong Kong uniquely attractive for business among Chinese cities. This view was intimately related to the rationale for “engagement” that drove China policy more broadly, i.e., that investment and trade would lead to political moderation at home and deference to the U.S.-led international order abroad.​

​Some leaders of Hong Kong’s expatriate business community appear unpersuaded that things have changed all that much. On CNN on July 19, Tara Joseph, President of the American Chamber of Commerce in Hong Kong (AmCham) said Hong Kong businesses were getting used to a “new normal.” Joseph acknowledged that the pro-democracy protests, sanctions on Chinese and Hong Kong officials, and the reduction in democratically elected seats and loyalty litmus test for political participation has “added to a layer of complexities and concerns. But as far as operating here, there are still aspects of Hong Kong that are still very open, and extraordinarily important for businesses.” 
 
But, asked the host, Michael Holmes, “how might China's moves against the democracy movement impact the traditional way that business and investment and so on is done in Hong Kong?” Ms. Joseph replied:
 
“The rule of law here is an internationally-recognized system of rule of law which is different from on the mainland.
 
“That makes commercial contracts very important to be completed in Hong Kong. And that gives people a sense of safety. And if there's any chipping away of that, then that is of great concern. Now we have seen some signs of chipping away of rule of law when it comes to the democracy movement. But as far as business goes, right now things seem relatively comfortable. There's also, free flow of information.“ (Emphasis added.)

 
AmCham’s own May survey showed that 40% of AmCham’s members are considering leaving Hong Kong, with the NSL a leading concern. In another interview on July 24, the day after Apple Daily announced it would be forced to close, Ms. Joseph asked and then answered her own question: “can you have a major financial center like a London or a New York or the old Hong Kong and still do that without free flow of information and data? And this is something where the jury is still out.”

Regarding the idea that there is one legal system for democrats and one for business, Dennis Kwok – a founder of Hong Kong’s Civic Party and former pro-democracy legislator, now at Harvard University – and Elizabeth Donkervoort of the American Bar Association Rule of Law Initiative have this to say:   
 
“There is a tendency within the commercial sector to view laws such as the HK NSL as primarily aimed at curbing political dissent. This is a dangerous assumption in light of the current environment in the PRC, where the Chinese Communist Party (CCP) is at the heart of the political, legal, and private sectors. In the PRC anything, including civil disputes, can become ‘political’ or of a ‘national security’ nature. In the PRC, national security concerns can touch on any aspect of the economy, from finance to energy to technology to infrastructure.”  
 
Read the Kwok-Donkervoort paper here. 

Even businesses that have bent over backwards to maintain good relations with Beijing are having trouble. In an investigative feature, Reuters reports that
 
The reason for the pullback by state firms isn’t HSBC’s financial soundness, which isn’t in question, but rather Chinese politics. People inside the state enterprises and HSBC say Beijing has grown disenchanted with the bank over sensitive domestic and international legal and political issues, from China’s crackdown in Hong Kong to the U.S. indictment of an executive at Chinese national tech champion Huawei Technologies.
 
Read “How Beijing Humbled Britain’s Mighty HSBC” here.

PictureMs. Chow’s photo from Harcourt Chambers.
Hong Kong’s legal system different from the mainland’s?
 
Among the legal professionals caught up in the NSL crackdown is the barrister Chow Hang-tung. Chow is also a vice chairman of the Hong Kong Alliance, which for some 30 years organized the iconic annual vigil to commemorate the June 4, 1989, crackdown on democracy protesters in and around Tiananmen Square. This year, as the authorities banned the vigil for the second year in a row, Chow suggested that people light a candle to remember the victims of the massacre and said that she would do so in a public place. 

Human Rights Watch brought together more than 70 organizations and individuals in a joint letter to Hong Kong’s Justice Secretary Teresa Cheng urging that charges against Chow for “inciting unlawful assembly” be dropped.  

Other leaders of the Hong Kong Alliance, Lee Cheuk-yan and Albert Ho, who appear in this photo below from 2020 with Chow, are already serving prison terms for peaceful protest. Others in the photograph have been arrested or convicted as well. Intense pressure on the Alliance has caused it to lay off staff and curtail its activities. The June 4 museum, operated by the Alliance, was forced to close and has been fined for operating without an entertainment license.

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Albert Ho, Lee Cheuk Yan, and Chow Hang-tung (in front), leaders of the Hong Kong Alliance, observing the June 4 vigil in 2020 despite the ban.
The text of the letter to Justice Minister Cheng, which CFHK signed, appears here.

Sanctions and Inaction  
 
On July 16, the Biden Administration levied sanctions on seven more Chinese officials under the Hong Kong Autonomy Act. Nonetheless, within days, another Apple Daily editor was arrested, while others who were previously detained were charged with national security offenses. Other trials, including Apple Daily’s founder Jimmy Lai, and the trials of dozens of democratic activists and politicians on “subversion” charges simply for organizing an informal primary prior to official elections, are continuing.
 
CFHK’s statement welcomed the Biden Administration’s sanctions on Chinese officials but noted that
 
“in order for these to be effective, it is essential that the U.S. work with the United Kingdom, China’s treaty partner in the Joint Declaration, and with other democratic allies and partners in a robust, coordinated, and sustained response to China’s determined threat to the rules-based international order of which its repression in Hong Kong is a key part.”
 
There is little sign that the UK is preparing to rally its allies and partners to bring about China’s compliance with its obligations under the Joint Declaration. The UK declared a breach of the Joint Declaration as early as 2016 over the case of several Hong Kong men snatched from Hong Kong and Thailand and taken to the mainland apparently because of their connection to a bookstore that sold titles critical of mainland leaders. More recently, both Prime Minister Boris Johnson and Foreign Secretary Dominic Raab have declared breaches of the treaty in response to Beijing’s imposition of the NSL and the reduction of democratically-elected seats in the legislature. 
 
However, the UK has not imposed sanctions for these breaches of the Joint Declaration. On July 20, several Members of Parliament (MP) pressed Foreign Secretary Raab over the government’s policies toward China prompted by the joint action of the U.S., U.K., and other countries accusing China of a “pattern of irresponsible, disruptive, and destabilizing behavior in cyberspace, which poses a major threat to our economic and national security.” 
 
Although Lisa Nandy was not the only MP to accuse the government of incoherence in its China policy, she did so particularly sharply. Ms. Nandy noted that although Foreign Secretary Raab insisted that the Chinese government “can expect to be held to account” for its cyber-attacks, his colleague, the Chancellor of the Exchequer, wants the UK to pursue closer financial ties with China in order to benefit from “the potential of a fast-growing financial services market with total assets worth £40 trillion.” 
 
“While the Foreign Secretary is imposing sanctions” related to Xinjiang, Ms. Nandy said, “the Chancellor is cashing cheques. How does the Foreign Secretary expect to be taken seriously in Beijing if he is not even taken seriously around his own Cabinet table?” 
 
As for Hong Kong, the U.K. government’s current focus is not on gaining China’s compliance with its treaty obligations or on British citizens imprisoned for pro-democracy activities. On the latter issue, see a question to the government by Lord David Alton, and the government's non-response here. To see Foreign Secretary Raab answer a question from MP Aaron Bell about the U.K.’s “historic and moral commitment to the people of Hong Kong in the face of the new national security law,” and for an account the debate and other insights into UK policy toward China, take a look at the very useful Beijing to Britain newsletter here.

Hong Kong as a Geostrategic Issue
 
On June 22, CFHK’s chairman Ambassador James Cunningham, a former U.S. Consul General in Hong Kong and Macau, testified before the Senate Finance Committee that events in Hong Kong are part of the “clash between authoritarian and liberal values” that requires  
 
"building and reinforcing our capacity, together with partners, to counter Chinese influence and to pursue our vision of Asia’s future. That vision is based on political freedom, opportunity, prosperity, respect for the individual and, of course, open and productive trade and investment. The Chinese Communist Party and General Secretary Xi Jinping have of course a quite different vision, based on authoritarian control, assertion of Chinese ‘rights’ and the restoration of Chinese primacy in Asia, intimidation, and subordination of the citizen to the State. The contest between these different models among and within nations is the defining theme of our age….
 
Beijing did not need to seize control of Hong Kong and gut the ‘high degree of autonomy’ it had promised in order to return stability to the city. That it chose to do so out of fear and perhaps impatience serves as a reminder of how easily Beijing can eschew political dialogue, ignore its commitments and dismiss the regard of the international community.”   ​

 
The authors of a new report from the Atlantic Council also see Hong Kong in geostrategic terms.  

In “Hong Kong’s Future on Edge: Countering the National Security Law,” Ash Jain, Joel Kesselbrenner and Peter Mattis write that Hong Kong must be given higher priority in a “a broader China strategy that will display a clear commitment from the world’s democracies to uphold the rules-based order they created and the values upon which it was founded.” In order do that, the democracies must take seriously China’s promises in the 1984 treaty that guaranteed Hong Kong autonomy and civil liberties. “Every day that China does not adhere to the Sino-British Joint Declaration,” they write, “is a day in which Beijing should pay a cost, have its freedom of action curtailed, or have its efforts to achieve its global ambitions frustrated.” 
 
Read the Atlantic Council report here and CFHK president Ellen Bork’s take on the report and the need for American leadership in RealClearWorld here.

Communism loyalty test

The Chinese Communist Party says loving China means loving the Communist Party. The CCP’s push to indoctrinate Hong Kongers through “patriotic education” continues. U.S.- sanctioned Chief Executive Carrie Lam spoke to a “patriotic education summit” on July 10. “Loving one’s home country is entirely justified, and treason should never be tolerated,” Lam said, according to the South China Morning Post’s report, continuing that “national education had been stigmatised by certain groups of people with ulterior motives and in the media, which had undermined students’ sense of national identity and led to serious consequences.”
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U.S.-sanctioned Hong Kong Chief Executive Carrie Lam at the forum on “patriotic education.”
The SCMP noted that Lam was denigrating the 2012 protest movement which forced Lam’s possibly even more reviled predecessor, C. Y. Leung, to back down on a plan to impose “patriotic education” in schools. That movement propelled Joshua Wong, then 12 years old, to the forefront of Hong Kong’s civil society and pro-democracy movements. Wong is now in prison serving sentences for peaceful protest and for observing the anniversary of the June 4, 1989, massacre of democracy protests last year in defiance of a ban. He also faces trial for “subversion” as one of the several dozen activists who organized an informal primary among pro-democracy parties last year. Also present at the forum, Tan Tie-niu, deputy Director of Beijing’s Liaison Office in Hong Kong, said Hong Kong educated students must have a “Chinese heart” in addition to a “Chinese face.” Mr. Tan is among the additional 7 Chinese officials sanctioned by the Biden Administration under the Hong Kong Autonomy Act. The list appears here.
 
Under the new national security environment, no one is too young to be targeted for indoctrination. Watch this promotional video by a private, pro-Beijing kindergarten. 
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Click on Tweets above to read thread and watch the videos via @Stand_with_HK on Twitter.

Toddlers grow up and the rigged elections being put into place will need adult voters.  Preparations continue with the appointment of Hong Kong’s Chief Secretary, the U.S.-sanctioned John Lee, to a vetting committee. Mr. Lee describes the committee’s task as rejecting  “those ‘faking to embrace’ or ‘faking to pledge allegiance’ from the doors of the governance structure.” 
 
The vetting is one part of the electoral changes Beijing announced in March and Hong Kong’s rubber stamp legislature adopted in May. For a review of those changes and the “patriotism” litmus test, read this excellent “explainer” from Hong Kong Free Press, here.
 
At the local level, dozens of elected officials have resigned in anticipation of being disqualified for exhibiting support for the 2019 protests against the proposed extradition law. Read more on South China Morning Post here.

ICYMI
 
CFHK’s Mark Clifford and Ellen Bork joined the discussion, “Can Hong Kong Remain a Global Financial Center?” hosted by the Hudson Institute. Watch the discussion here. Ellen participated in a panel discussion launching the Atlantic Council report, which can be viewed here.
 
Next Time
 
A look at the NSL trials that have gotten started with the conviction of Tong Ying-kit, 24, a former waiter who faces up to a life sentence after being convicted of “terrorism” and “secession” charges for driving a motorcycle into three policemen and while carrying a banner with a slogan that became associated with the 2019 protests, “Liberate Hong Kong, Revolution of our times.”

About CFHK
 
The Committee for Freedom in Hong Kong (CFHK) presses for political and economic consequences for China’s failure to keep its promises regarding Hong Kong’s freedoms; supports the rule of law, freedom of expression, and the release of political prisoners – and urges the business community to stand against China’s assault on freedom, which also imperils Hong Kong’s status as an international financial center. Hong Kong’s fate is linked to the preservation of freedom, democracy, and international law in the region and around the world.  
​
For more information, please contact:

Ellen Bork
P: +1 (301) 718-4813
E: media@thecfhk.org
www.thecfhk.org
@thecfhk 
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