Xi might sacrifice HK to save his ambitions 1

The protests in Hong Kong are intensifying and no mediation seems possible. Within the territory, there is a standoff between regular Hong Kongers and Chief Executive Carrie Lam (林鄭月娥), while the Chinese Ministry of Foreign Affairs has directly accused the US of being behind the protests, saying that US Secretary of State Mike Pompeo is behaving as if he is still the head of the CIA.

It said that the demonstrations are “somehow the work of the US” and that many Americans, and even a US flag, have appeared at the demonstrations.

Last week’s Shanghai trade talks between the US and China broke down at the “right” time, as it allowed Beijing to assign blame for its failure in Hong Kong and pave the way for dealing with it using nationalist slogans.

History shows that when China is unstable, Zhongnanhai relies on nationalism to maintain its hold on power. There have been signs of the Chinese People’s Liberation Army (PLA) amassing troops along the Shenzhen border, on Danshan Island in Zhejiang Province and on Dongshan Island in Fujian Province, that is, both to the north and to the south of Taiwan, as it is holding drills in the Bohai Sea. This is clearly intended for domestic consumption.

As foreign observers focus on Taiwan and Hong Kong, they forget about the ongoing contest in Beidaihe.

Next month, the US is to further increase trade tariffs on Chinese goods, and there have been reports that Foxconn Technology Group would sell a Shenzhen plant.

Businesspeople have a well-developed sense of smell and what will they do if the Hong Kong situation spreads to the Greater Bay area? Given domestic and international pressures, sending troops to Hong Kong might, in Beijing’s eyes, be the best option.

After restoring order, the PLA troops would not just disappear, they would take over the Hong Kong government.

Article 4 of the Garrison Law of the Hong Kong Special Administrative Region of the People’s Republic of China authorizes the PLA to implement military rule: “Members of the Hong Kong Garrison may exercise the powers conferred by the laws of the Hong Kong Special Administrative Region in the course of rendering assistance in the maintenance of public order or in disaster relief.”

Military rule is not something new — in Taiwan it was called “battleground administration.” Military rule has to deal with a “hostile population,” so all three branches of government are concentrated in the hands of a military governor. The military governor has unlimited powers, and in addition to arresting and sentencing people, he can also liquidate or close financial institutions.

Chinese President Xi Jinping (習近平) is known to attack his enemies and consolidate power in the name of fighting corruption. Hong Kong is regarded as a favorite place for corrupt officials to launder and keep their money.

If military rule is implemented in Hong Kong, the military governor would have the power to order local financial institutions to hand over the financial documents of specific individuals — political enemies.

This might decimate Hong Kong’s prosperity, but it would also mean that any corrupt officials opposed to Xi would lose their final hidey-hole. This would be a major victory for the pro-Xi faction.

Access to foreign reserves and corrupt officials’ finances would come as a timely respite to a Beijing buffeted by the winds of a trade dispute, and it can put the blame on the US.