On Tuesday, Beijing adopted a new national security law for Hong Kong. It comes in the wake of several years of continued social unrest beginning with the Umbrella Movement in 2014 and the anti-extradition movements in 2019.

The mass movements, while mostly peaceful, included violence and vandalism. They also severely impacted the business community, socio-economic stability and Hong Kong’s previously sterling reputation for a business climate that was second to none.

Under the guise of national security and preserving order in Hong Kong, the new law seeks to bring stability to the economy and business environment in Hong Kong by criminalizing acts that threaten social (and national) stability. These have been labelled subversion, secession and terrorism.

Making the law even more problematic, these crimes punishable under the new law overlap with China’s “three evils” of ethnic separatism, terrorism and religious extremism, which have led to the creation of re-education camps in Xinjiang, the incarceration of more than 1 million ethic Uighurs and the oppression of Tibetan minorities.

For Hong Kong citizens, this new law may affect their ability to protest peacefully to the local government or Beijing for fear of being labeled a seditionist, secessionist or worst a terrorist. It is also the end of the "One country, two systems" model that has protected their rights and privileges compared to mainland China.

Saliently, the law is unambiguous in that people are subject to it whether they are living in Hong Kong or not and whether they are a Hong Kong citizen or not. Moreover, the fact that the new law is retroactive means that past activities by Hong Kong and non-Hong Kong citizens can be prosecuted as well under it.

This means that the new national security law has immediate implications for Hong Kong citizens, Japan and other countries tethered to Hong Kong through businesses, and citizens with a Hong Kong connection.

Last year Hong Kong was Japan’s fifth-largest trading partner at $33.6 billion a year. At least 30,000 Japanese nationals and 1,400 Japanese companies are located there. Many of these businesses will now filter their decision-making through the lens of whether the decisions fall under the rubric of the new national security law.

For example, if they hire local citizens who in their private capacity attend the annual Tiananmen Square Incident’s commemorative events, will the businesses be charged with supporting anti-China citizens?

What if a Hong Kong-based Japanese business works with suppliers from Taiwan? Will this be seen as supporting Taiwan's independence?

There are even questions about how Japanese businesses will continue to be able to work with the numerous Japanese studies programs in Hong Kong that equip their students with Japanese language skills and critical-thinking skills about Japan and the region (including China). Will these programs be deemed as subversion?

Given China's arbitrary arrests of Canadians Michael Kovrig and Michael Spavor and the Japanese scholar Nobu Iwatani, a professor at Hokkaido University, the new law only deepens the concerns of researchers doing work related to Japan-China relations.

Will our research be deemed supporting subversion, secession, and terrorism when we conduct research on the Chinese political system, ethnic groups, Hong Kong or other topics? Will we be subject to the new national security law when our findings are not in line with the Chinese Communist Party’s interpretations?

If so, we are entering a research ice-age when it comes to research on China. This will have grave consequences for our ability to conduct high quality research on China to contribute to building a better understanding of it and to craft more effective policies to foster peaceful co-existence.

The United States’ approach to the new law has been for the Senate to approve a sanctions regime in response the Beijing’s adoption of the law. The new sanctions bill is meant to send the strongest of messages to Beijing that the new national security law threatens Hong Kong’s rule-of-law system and the rights guaranteed under the Basic Law of its citizens.

While the U.S. bill is important, there will be questions as to how it is enforced and how it is linked to other initiatives to restrain China’s behavior and actions in Hong Kong and the region?

Adopting the Magnitsky Act to punish mainland and Hong Kong officials that are deemed culpable for human rights that are trampled under the new national security law may be part of giving the U.S. bill more teeth, but in reality this will be difficult to enforce without a more well thought-out long-term strategic policy in response to the new law.

U.S. President Donald Trump has said that he would reassess their extradition treaty, export control, travel advisories, and place sanctions on certain Chinese and Hong Kong officials. This was done as the U.S. and many countries believe that the new national security law fundamentally violates the "One country, two systems" model that defines the Hong Kong-mainland relationship.

Revoking Hong Kong's special status will be a blow to Beijing as Hong Kong will begin to lose its comparative advantages as an international finance center.

It is the "One country two systems" model, Hong Kong's previous good governance and its independent rule-of-law system that made Hong Kong the premiere location in East Asia as an international finance center.

These advantages have been key comparative advantages to internationalize the yuan for Chinese President Xi Jinping’s signature initiatives such as the "Belt and Road" initiative.

Hong Kong's special status also allowed China's political and economic elites a safe place for capital flight, the acquiring of a passport that allowed freer movement globally, and the ability to eventually emigrate to countries where they could live outside the influence of the CCP.

Seen from the perspective of Beijing, the new law, in tandem with the U.S. response of removing Hong Kong’s special status, may be short-term pain for long-term gain as it could accelerate China’s long-term interest in turning Hong Kong into another ordinary Chinese city.

This is not in the interests of Hong Kong citizens or friends of Hong Kong such as Japan. Hong Kong’s stability and role as nexus between China and the world give it a critical role in helping us engage with China. Its highly educated, internationally oriented and civic minded citizens are a bridge to China, not a Trojan horse as many within the CCP fear.

While working with like-minded states, Japan needs to continue to convey to Beijing that the new national security law must be carefully implemented to ensure the "One country, two systems" model remains robustly intact. This will be both a delicate and difficult task as overt criticism by Japan may elicit downstream security complications in the East China Sea and economic coercion against Japanese businesses in China.

With the arrest of about 370 people, at least 10 of them for allegedly violating the new national security law on July 1, we should be realistic about China’s intention to send the strongest of signals to Hong Kong citizens that there will be no more tolerance for mass protests.

The comment by Zhang Xiaoming, deputy head of the Office for Hong Kong and Macao, that suspects arrested on national security law charges “will be tried in the mainland” should further dampen any optimism that the "One-country, two systems" model remains intact.

The new national security law in Hong Kong is a critical juncture in relations with Beijing as we enter a prolonged period of hard authoritarianism in which China is willing and able to silence its own citizens and non-citizens alike.

With no easy solutions to this increasingly dark period of relations with China, Japan and other like-minded states will need to draw inspiration from the Enlightenment scholar Thomas Paine’s maxim “It is not in numbers, but in unity, that our great strength lies.” It will only be through collective action, mutual protection and strategic patience that we can withstand the growing tide of absolutism with Chinese characteristics.

Stephen R. Nagy (@nagystephen1) is a senior associate professor at International Christian University and a visiting fellow with the Japan Institute for International Affairs.

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