- Before the British government handed over Hong Kong in 1997, China agreed to allow the region considerable political autonomy for fifty years under a framework known as “one country, two systems.”
- In recent years, Beijing has cracked down on Hong Kong’s freedoms, stoking mass protests in the city and drawing international criticism.
- Beijing imposed a national security law in 2020 that gave it broad new powers to punish critics and silence dissenters, which has fundamentally altered life for Hong Kongers.
China pledged to preserve much of what makes Hong Kong unique when the former British colony was handed over in 1997. Beijing said it would give Hong Kong fifty years to keep its capitalist system and enjoy many freedoms not found in mainland Chinese cities.
But more than halfway through the transition, Beijing has taken increasingly brazen steps to encroach on Hong Kong’s political system and crack down on dissent. In 2020, Beijing imposed a sweeping national security law on Hong Kong. Since then, authorities have arrested dozens of pro-democracy activists, lawmakers, and journalists; curbed voting rights; and limited freedoms of the press and speech. These moves have not only drawn international condemnation, but have also raised questions about Hong Kong’s status as a global financial hub and dimmed hopes that the city will ever become a full-fledged democracy.
What is the status of Hong Kong?
Hong Kong is a special administrative region of the People’s Republic of China that has, until recently, largely been free to manage its own affairs based on “one country, two systems,” a national unification policy developed by Chinese leader Deng Xiaoping in the 1980s. The concept was intended to help integrate Taiwan, Hong Kong, and Macau with sovereign China while preserving their unique political and economic systems. After more than a century and a half of colonial rule, the British government returned Hong Kong in 1997. (Qing dynasty leaders ceded Hong Kong Island to the British Crown in 1842 after China’s defeat in the First Opium War, and Kowloon and the New Territories came under British rule shortly after.) Portugal returned Macau in 1999, and Taiwan remains independent.
The Sino-British Joint Declaration of 1984 dictated the terms under which Hong Kong was returned to China. The declaration and Hong Kong’s Basic Law, the city’s constitutional document that Beijing enacted in accord with the declaration, enshrined the city’s “capitalist system and way of life” and granted it “a high degree of autonomy,” including executive, legislative, and independent judicial powers for fifty years (until 2047).
Chinese Communist Party officials do not preside over Hong Kong as they do over mainland provinces and municipalities, but Beijing exerts decisive influence over the region’s political sphere, especially after the enactment of the National Security Law in 2020. Beijing also maintains the authority to interpret the Basic Law for Hong Kong, a power that it had rarely used until recently. All changes to political processes are supposed to be approved by not only the Hong Kong government, but also by China’s top legislative body, the National People’s Congress, or its Standing Committee.
Hong Kong is allowed to forge external relations in certain areas—including trade, communications, tourism, and culture—but Beijing maintains control over the region’s diplomacy and defense. Under the Basic Law, Hong Kongers are supposed to be guaranteed freedoms of the press, expression, assembly, and religion, as well as protections under international law, which include those guaranteed by the International Covenant on Civil and Political Rights (ICCPR). But in practice, Beijing has curtailed most of these rights.
Was Hong Kong ever a democracy?
Although colonial Hong Kong had certain freedoms, it was never rated a full democracy [PDF] by international standards. And today, China is a one-party state that is reluctant to allow Hong Kong to hold free and fair elections. Experts note the ambiguity on this issue. The Basic Law states that the government’s “ultimate aim” is to have Hong Kong’s leader elected by popular vote, but it does not give a deadline for this to occur.
Since the handover, there have been no free votes by universal suffrage for the chief executive, who is the head of the Hong Kong government. The chief executive is instead chosen by an election committee composed of representatives from Hong Kong’s dominant professional sectors and business elite. Under the Basic Law, Hong Kong residents were previously allowed to vote for members of the legislature, known as the Legislative Council, or LegCo, as well as for members of their local district councils, which handle day-to-day community concerns.
But more recently, Beijing has curbed Hong Kong residents’ already-limited voting rights. It overhauled the electoral system in 2021 to make it easier for pro-Beijing candidates to be appointed as chief executive and as LegCo members. Beijing ruled that only “patriots” who “respect” the Chinese Communist Party can run in elections. Only one candidate was allowed to run in the 2022 chief executive election: John Lee, a hard-line former chief superintendent of the city’s police force. For the LegCo, prior to 2021, half of the body’s seventy members were elected by direct voting, while the rest were chosen by groups representing different industries and professions. Now, just twenty members are directly elected and seventy are chosen. In response to these changes, pro-democracy groups boycotted the 2021 LegCo elections, and all ninety seats went to pro-Beijing individuals.
In 2023, new election rules set by Chief Executive Lee reduced the number of directly elected representatives from 90 percent to 20 percent of the total council seats. The remaining seats must be appointed by the chief executive or indirectly appointed by an electoral college. Prior to the rule changes, the district council was one of the last systems in which voters had a direct, unrestricted voice in their elections. Due to broad dissatisfaction with the new restrictions, voter turnout for the 2023 district council elections plummeted to 27.5 percent of eligible voters, compared to 71 percent in the 2019 election.
Unlike China, Hong Kong has numerous political parties. They have traditionally split between two factions: pan-democrats, who call for incremental democratic reforms, and pro-establishment groups, who are by and large pro-business supporters of Beijing. The latter have typically been more dominant in Hong Kong politics. Although only a small minority of Hong Kongers have favored outright independence from China, youth movements, mostly led by student protesters, have demanded a more democratic system. Students have formed several political groups, including more radical, anti-Beijing parties such as Youngspiration, Hong Kong Indigenous, and Demosisto. But the powers of these groups and pro-democracy parties have weakened significantly as Beijing has cracked down on political opposition, including via the national security law. Several parties have disbanded, and some members have been forbidden from running in elections or jailed.
How has Beijing eroded Hong Kong’s freedoms?
Beijing had been chipping away at Hong Kong’s freedoms since the handover, experts say. Over the years, its attempts to impose more control over the city have sparked mass protests, which have in turn led the Chinese government to crack down further.
For instance, in 2003, the Hong Kong government proposed national security legislation that would have prohibited treason, secession, sedition, and subversion against the Chinese government, but popular protests defeated that effort. In 2012, it tried to amend Hong Kong schools’ curricula to foster Chinese national identity, which many residents dismissed as Chinese propaganda. And in 2014, Beijing proposed a framework for universal suffrage, allowing Hong Kongers to vote for the city’s chief executive, but only from a Beijing-approved short list of candidates. The proposal led to protesters organizing massive rallies, collectively known as the Umbrella Movement, to call for true democracy.
In the years following the 2014 protests, Beijing and the Hong Kong government stepped up efforts to rein in dissent, including by prosecuting protest leaders, expelling several new legislators, and increasing media censorship.
In the summer of 2019, Hong Kong saw its largest protests ever. For months, people demonstrated against a Beijing-endorsed legislative proposal that would have allowed extraditions of accused criminals for trials in mainland China. Then Chief Executive Carrie Lam withdrew that bill in September, but the protests, which garnered international attention following reports of police brutality and excessive use of tear gas and rubber bullets, continued until the outbreak of COVID-19 in Hong Kong in early 2020.
What is the national security law Beijing imposed on Hong Kong?
Beijing took its most assertive action yet on June 30, 2020, when it bypassed the Hong Kong legislature and imposed a national security law [PDF]. The legislation effectively criminalizes any dissent and adopts extremely broad definitions for crimes such as terrorism, subversion, secession, and collusion with foreign powers. It also allows Beijing to establish a security force in Hong Kong and influence the selection of judges who hear national security cases. Pro-democracy activists and lawmakers expressed fears that it could be “the end of Hong Kong.” Meanwhile, Chinese officials and pro-Beijing lawmakers said it was necessary to restore stability following the massive protests.
Authorities have used the law to try to eliminate all forms of political opposition. They disqualified pro-democracy candidates from running in elections and removed elected lawmakers for publicly opposing China’s control over Hong Kong. As of July 2023, police had arrested at least 260 people under the law, many of them prominent pro-democracy activists, former lawmakers, and journalists. Thousands more people have been arrested for participating in the 2019 protests. Beijing and the Hong Kong government have also curbed media freedoms, with pro-democracy publications such as newspaper Apple Daily closing after journalists were harassed and jailed. Jimmy Lai, founder of Apple Daily and a high-profile pro-democracy advocate in Hong Kong, was detained by the police in 2020. He faces up to a lifetime in prison for myriad charges under the new national security law, including foreign collusion, as well as charges under preexisting colonial law, including sedition, fraud, and unauthorized assembly.
The crackdowns have begun to extend to foreigners working in Hong Kong. A Chinese Canadian scholar researching the consequences of the Chinese government’s 1989 massacre of protesters at Tiananmen Square was recently fired from her teaching position at a Hong Kong university after being denied a work visa. The government has even claimed jurisdiction over the activities of foreigners in their own countries. Moreover, the Hong Kong police have offered bounties for information on pro-democracy protesters and activists, many of whom have sought asylum abroad or are living outside of Hong Kong, and at least one of whom is a U.S. citizen. These moves have by and large ended mass public protests and silenced many Hong Kong residents who fought for democracy. Thousands of people, including prominent activists and students, have fled the city.
What has been the international response to Beijing’s actions?
Several countries have condemned Beijing’s moves and taken retaliatory measures. The United States has imposed sanctions on Chinese officials whom it alleged were undermining Hong Kong’s autonomy, restricted exports of defense equipment to Hong Kong, revoked Hong Kong’s special trade status, and warned U.S. companies of the “growing risks” [PDF] of doing business in Hong Kong. It also joined a handful of countries, including Australia, Canada, and New Zealand, that suspended their extradition treaties with Hong Kong because of the national security law. In August 2021, the Joe Biden administration deferred the deportations of the several thousand Hong Kong residents in the United States.
The United Kingdom (UK), which also ended its extradition agreement with the region, said it would allow three million Hong Kong residents to settle in the country and apply for citizenship. Canada announced measures to make it easier for Hong Kong youth to study and work, creating pathways for permanent residency. The European Union, which expressed “grave concern” about the national security law, limited exports of equipment that China could use for repression.
However, the opposition has not been unanimous. Fifty-three countries—most of which are participating in China’s Belt and Road Initiative—signed a statement read before the UN Human Rights Council in July 2020 supporting the national security law, while twenty-seven countries signed a statement criticizing it.
What does Beijing’s crackdown mean for Hong Kong’s financial status?
Hong Kong is still a global financial hub, but Beijing’s actions have jeopardized its standing. Relatively low taxes, a highly developed financial system, light regulation, and other capitalist features had made Hong Kong one of the world’s most attractive markets and set it apart from mainland financial hubs such as Shanghai and Shenzhen. Multinational firms and banks—many of which maintain Asian regional headquarters in Hong Kong—have historically used the city as a gateway to do business in the mainland, owing in part to its proximity to the world’s second-largest economy and its reliable legal system based on British common law.
However, executives of some companies with large footprints in Hong Kong have voiced concerns about the national security law, criticizing the broad powers given to mainland authorities. The Biden administration has cautioned that companies could violate the vague national security law without realizing it. “Beijing’s ideal scenario is to keep Hong Kong as a financial center without all the freedom. But it seems that you really cannot maintain Hong Kong’s international financial standing while stifling its freedom,” says Victoria Tin-bor Hui, a political science professor at the University of Notre Dame.
Some firms have left the city or are boosting hiring in other Asian financial capitals, such as Singapore and Tokyo, while Hong Kong stocks have taken a plunge since 2019, and the region’s initial public offering (IPO) market continues to decline. The number of American companies with regional bases in Hong Kong also fell to an eighteen-year low in 2021. Social media companies, in particular, have expressed unease about a part of the law that requires them to surrender requested user data to the Hong Kong government. Even TikTok, an app owned by mainland-based company ByteDance, suspended operations in the city.
Also to blame for the exodus were Hong Kong’s COVID-19 restrictions, which included a lengthy quarantine requirement and other strict measures imposed in an attempt to align with Beijing’s so-called zero-COVID policy. Authorities banned flights from several countries, including the United States and the UK, and restricted gatherings. These moves led many economists to lower predictions for the city’s growth and warn of brain drain. “Hong Kong is facing an exodus of educated workers on a scale not seen since the early 1990s,” said a Hong Kong General Chamber of Commerce report released in 2022.
Yet, some experts believe that Hong Kong can maintain its commercial status despite its democratic decline. In recent years, Beijing has moved to connect Hong Kong more to the mainland, creating the Greater Bay Area project, an ambitious plan to integrate Hong Kong and cities in neighboring Guangdong Province into a more cohesive economic region. Many firms and investors are betting that this increased connectivity will boost the amount of wealth flowing from the mainland into Hong Kong.
On The President’s Inbox podcast, the University of Notre Dame’s Victoria Tin-bor Hui explains the national security law imposed on Hong Kong.
The podcast Hong Kong Silenced tells the story of how life in Hong Kong was turned upside down in the year after the national security law was imposed.
The Wilson Center’s Mike Davis details the constitutional journey that led to the passing of the 2020 National Security Law in his book, Making Hong Kong.
CFR’s Jerome Cohen outlines the new criminal justice legal landscape under the National Security Law in his article published in the Academia Sinica Law Journal.
During this 2023 roundtable, CFR’s Jerome A. Cohen and Doughty Street Chambers Barrister Caoilfhionn Gallagher discuss the broad reaching consequences of the trial of Jimmy Lai.
Eleanor Albert and Clara Fong contributed to this Backgrounder. Will Merrow created the map.