On June 30, a new national security law was enacted in Beijing and immediately enforced in Hong Kong. That was the day when the long-eroding fiction of “One country, two systems” finally disappeared in Hong Kong. Who lost Hong Kong in this old East Asian power game?

In Washington, it has been a journalistic tradition to ask “who lost” a specific country. For example, who lost Manchuria in the 1930s, who lost Vietnam in the 1970s, who lost Iran in the 1980s and who lost Iraq in the 2010s? How will future historians argue over who lost Hong Kong? My take is that it was not Trump but Xi who lost the city.

Did Trump lose Hong Kong?

No. The U.S. president does not recognize the values of Hong Kong in the first place, so it was hardly his to lose. According to former U.S. national security adviser John Bolton’s notorious memoir, Trump has not only been ignorant of but also indifferent to what has been happening in Hong Kong since the spring of 2019 when the extradition bill was proposed.

By early June 2019, massive protests involving some 1.5 million were under way. It was when Bolton heard Trump say, “That’s a big deal” but “I don’t want to get involved,” because “We have human rights problems, too.” Bolton lamented that those remarks by Trump “pretty much ended my Twitter campaign pressing China.”

Bolton hoped that Hong Kong would give Trump “leverage over China,” but Trump had a different idea. On June 4 that year, the 30th anniversary of the Tiananmen Square massacre, Trump refused to issue a White House statement because he thought doing so might undermine the ongoing trade negotiations with China.

Trump was quoted as saying (inaccurately), “That was 15 years ago” and “Who cares about it? I’m trying to make a deal. I don’t want anything.” On Aug. 13, Trump even tweeted: “I have ZERO doubt that if President Xi wants to quickly and humanely solve the Hong Kong problem, he can do it.” No, Xi did not and would never do it.

Did U.S. foreign policy lose Hong Kong?

Bolton thought so. He deplored that “Hong Kong’s fate might have all but disappeared” when Trump told Chinese President Xi Jinping in his June 18 phone call that Hong Kong “was a domestic Chinese issue, and he had told his advisors not to discuss Hong Kong publicly.” Of course, “Xi was appreciative” and “Trump acquiesced.”

Did American foreign policy elites lose the city? The answer is mixed. Under the Hong Kong Policy Act of 1992, they have supported Hong Kong’s autonomy by promoting trade, investment and high-level visits. Washington, however, has not been assertive enough in urging Beijing to promote democracy in Hong Kong.

During the Umbrella Movement in 2014, for example, it was the United Kingdom that was most active in criticizing China. Prime Minister David Cameron expressed his deep concern, saying that Britain should stand up for the rights under the Anglo-Chinese agreement of 1984, including residents’ rights to demonstrate.

In October 2014, however, when Chinese foreign minister met with U.S. President Barack Obama and his national security adviser, the U.S. side only expressed “hope that differences between Hong Kong authorities and protesters will be addressed peacefully.” Democrats should not blame Trump for losing Hong Kong, either.

Did Hong Kongers lose Hong Kong?

It depends. Yes, younger political activists lost a free and democratic Hong Kong. Many of them reportedly have started leaving the city, probably for good. For mature citizens in business circles, however, it is not necessarily the end of Hong Kong yet.

Recent business news from China and elsewhere suggest that Hong Kong can still be a financial hub in the region. Chinese mainland’s state-owned companies are increasing their investment in Hong Kong and many Chinese firms listed in U.S. markets are leaving for Hong Kong due to tighter regulations in the United States.

Did foreign investors lose Hong Kong?

Probably not. They can always find alternative sites to continue their businesses, although I don’t expect many of them would come to Tokyo. On the contrary, if I had enough money, say making $20 million a year, I would rather move to Singapore since Tokyo’s taxes are too high and regulations too complicated.

According to Bolton’s book, “Hong Kong’s economy now amounted to only 2 percent of China’s total, whereas at the time of the handover from Great Britain in 1997, it amounted to 20 percent.” Hong Kong seems to have lost much of its value long time ago. If so, who really lost Hong Kong? My conclusion is that Xi did.

Xi lost Hong Kong as proof of China’s good will

Future historians may wonder why the Chinese Communist Party crossed a possibly unnecessary red line in Hong Kong in 2020. Were democratic movements so threatening to mainland China that the new law was needed to stop and contain the spread of protests to Shanghai or Beijing? I can’t believe this.

The new Hong Kong National Security Law is so comprehensive that it will make Hong Kong just another rich but ordinary city in China where foreign investors may never find it worthwhile to return. This simply means that Beijing “won” Hong Kong while losing its only reliable financial gateway to the world.

It is not the end of the game. While Xi may feel that he is winning the battle over Hong Kong, he is actually losing the war against the international community. The values that Beijing is losing are much more than financial. China is now losing its credibility as a responsible member of the regional and international communities.

This is what happened to Japan in the 1930s when it created the state of Manchukuo after annexing Taiwan and the Korean Peninsula earlier. Although those moves were conducted in accordance with international law, Japan lost something much more important than what it gained in territory: international trust in its good will. I hope China learns a lesson from Japan.

Kuni Miyake is president of the Foreign Policy Institute and research director at Canon Institute for Global Studies.

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