A new security law for Hong Kong proposed by Beijing threatens to launch a new wave of deadly protests. That poses a grave threat to Cathay Pacific.
New Beijing Law Stirs Resentment In Hong Kong
On Friday, the National People’s Congress (NPC) in Beijing announced draft legislation that would ban secession, sedition, and subversion in the Special Administration Region. Hong Kong’s legislature would be bypassed.
An NPC spokesperson defended the law:
“National security is the bedrock underpinning a country’s stability. Safeguarding national security serves the fundamental interests of all Chinese people, including our HK compatriots.”
Christopher Patten, the last British Governor of Hong Kong, said the proposed law is a “comprehensive assault on the city’s autonomy, rule of law and fundamental freedoms” and represents a “flagrant breach” of the Sino-British Joint Declaration that accompanied the return of Hong Kong to China in 1997. Over 200 political leaders from around the world signed onto his letter, which also asserted:
“If the international community cannot trust Beijing to keep its word when it comes to Hong Kong, people will be reluctant to take its word on other matters.”
Hong Kong is ruled under a “one country, two systems” approach in which Hong Kong maintains a degree of autonomy over economic and political matters from the Mainland until 2047. Under Hong Kong’s Basic Law, Article 23 required Hong Kong to prohibit against secession and foreign interference:
“The Hong Kong Special Administrative Region shall enact laws on its own to prohibit any act of treason, secession, sedition, subversion against the Central People’s Government, or theft of state secrets, to prohibit foreign political organisations or bodies from conducting political activities in the Region, and to prohibit political organisations or bodies of the Region from establishing ties with foreign political organisations or bodies.”
Such laws were never enacted. The last major attempt was in 2003, which resulted in mass protests and was subsequently dropped.
Beijing’s latest action has already mobilized protestors in Hong Kong, who took to the streets yesterday to protest the proposed regulation. Police deployed tear gas and many arrests were made, but protestors vow that civil unrest will only intensify. Protestors and advocates assert that the people of Hong Kong must be granted self-determination, allowing them to decide the proper course for their region.
With tensions growing between the USA and China over coronavirus, China has warned of a new Cold War emerging. The bold move to clamp down on Hong Kong will only further strain tensions between China and other powers sympathetic to Hong Kong.
Cathay Pacific Will Suffer
Flag carrier Cathay Pacific of Hong Kong finds itself in the unenviable position of being collateral damage in the war over Hong Kong.
Long before COVID-19, civil unrest in Hong Kong led to fewer tourists, fewer business trips, and consequently stagnant revenue for Cathay Pacific. COVID-19 exacerbated the issue, but at least created a common problem for all airlines in the region.
But with travel starting to resume again, Cathay Pacific will be left behind if civil unrest scares away people from visiting or doing business in Hong Kong.
If you were hoping to visit Hong Kong anytime soon (noting it has done a tremendous job in its COVID-19 fight), be mindful that carriers will be reluctant to re-introduce service if there are daily or even weekly protests.
Last autumn, weekly protests were over a law that did not go nearly as far as what is now under consideration. I would expect protests will only escalate in frequency. In this precarious time for the region, Cathay Pacific must walk a fine line so as not to annoy either side all while it fights for survival in a new COVID-19 world.
image: Cathay Pacific