Hong Kong police fired tear gas and water cannons to disperse thousands of people who rallied on May 24 to protest against Beijing’s plan to impose national security laws on the city.

In a return of the unrest that roiled Hong Kong last year, crowds thronged the Causeway Bay shopping area in defiance of curbs imposed to contain the coronavirus. 

Hong Kong was rocked by unprecedented, pro-democracy protests last year which began over the proposed extradition law, which sparked fears that locals would be prosecuted in the Chinese mainland. It later turned into a major pro-democracy movement with demands to elect local officials without Chinese interference.

China is preparing to set up national security agencies in Hong Kong to deal with pro-democracy agitators, the state media reported, a day after Beijing introduced a controversial national security law to firm up control over the former British colony.

Currently, a Chinese Military garrison comprising over 10,000 troops — mainly a symbolic presence for external defence — is stationed in Hong Kong. The public order is maintained by the Hong Kong Special Administrative Region (HKSAR) government.

What is the new Bill about?

The draft Bill on establishing and improving the legal system and enforcement mechanisms for the Hong Kong Special Administrative Region (HKSAR) to safeguard national security was submitted to the National People’s Congress (NPC) during its week-long session in Beijing and is expected to be passed on May 28.

The Bill is a political bombshell for the former British colony as China has decided to bypass the local legislative council to bring about a new national security law, tailor-made to control Hong Kong after the pro-Beijing local administration headed by Chief Executive Carrie Lam failed to control months of mass protests by pro-democracy groups demanding autonomy and freedom from China.

After the lawmakers vote on the draft Hong Kong National Security Law on May 28, the NPC Standing Committee can hold interim meetings to sign the Bill into law.

The Standing Committee refers to a small group of powerful legislators who meet round-the-year. The near 3,000-member NPC, regarded as a rubber-stamp Parliament for routine approvals of the ruling Communist Party’s decisions, holds a full session only once a year.

One country, two systems policy

Hong Kong, an economic powerhouse, is a Special Administrative Region (SAR) of China. It has observed a “one country, two systems” policy since Britain returned sovereignty to China on July 1, 1997, which has allowed it certain freedoms the rest of China does not have.

While China still has extensive capital controls and often intervenes in its financial markets and banking system, Hong Kong is one of the most open economies in the world and one of the biggest markets for equity and debt financing.

The size of Hong Kong’s economy may only be equivalent to 2.7 per cent of mainland China’s now, down from 18.4 per cent in 1997 when it reverted to Chinese rule, but the territory punches above its weight due to its world-class financial and legal systems.

All that is possible due to its unique system of governance. Under the ‘one country, two systems’ formula agreed as part of Britain’s handover of the territory to China, Hong Kong is guaranteed liberties that are unavailable on the mainland such as freedom of expression and an independent judiciary.

These freedoms give Hong Kong a special status internationally, allowing it to negotiate trade and investment agreements independently from Beijing - for instance, it does not have to pay the tariffs that the US is imposing on Chinese imports.

How do other countries react to the Bill?

The security laws have also worried financial markets and drawn a rebuke from foreign governments, human rights groups and some business lobbies.

Washington said China’s proposed legislation could lead to US sanctions. “It looks like, with this national security law, they’re going to basically take over Hong Kong and if they do, Secretary of State Mike Pompeo will likely be unable to certify that Hong Kong maintains a high degree of autonomy,  and if that happens there will be sanctions that will be imposed on Hong Kong and China,” national security adviser Robert O’Brien said.

China has dismissed foreign complaints as “meddling”, and said the proposed laws will not harm Hong Kong’s autonomy or investors. Beijing’s top diplomat said the proposed legislation would target a narrow category of acts and would have no impact on the city's freedoms nor the interests of foreign firms.

Last year’s anti-government protests plunged Hong Kong into its biggest political crisis in decades, battered the economy, and posed the gravest popular challenge to President Xi Jinping since he came to power in 2012.

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