 Okay, we're back. We're live. It's the one o'clock block with Michael Davis who joins us from Washington DC. Michael Davis has plenty of experience and time on the ground in Hong Kong. And so we can certainly discuss with us how the bear is bearing down on Hong Kong these days. And that's a reference not to the Russian bear but to the Chinese bear. Welcome back to the show, Michael. It might be a dragon, Jay, but we'll. Okay, I should have used that instead. But isn't it true that, you know, Xi Jinping is bearing down on Hong Kong. He's getting worse than before. He's being meaner or repressive oppressive than he has in the past. We're at some inflection point right now, aren't we? The regime is doing this across the board. So it's put pressure on universities in China. It's of course locked up a million or more Uighur people in Xinjiang. It's harassing the Tibetans. So this is all by the PRC playbook. If we've had periods of relative calm in the past, it's because perhaps the leaders in China weren't as determined as this one. He fears the Communist Party will lose power if he doesn't use power. And that's what he's doing. And in the case of Hong Kong, of course, the more he puts pressure on this open society, the more they push back. They say that's Newton's law, you know, the pressure in one direction gets resistance. And that's what we've been seeing in Hong Kong. And it's kind of wrong headed. We all know that. And he's basically co-opted the Hong Kong government and the Hong Kong police to do his bidding. It's interesting now with his recent proposal of a national security law, which he wants to apply directly in Hong Kong. He's gone around and made all these corporate elites swear their allegiance to it and praise him for proposing it. So he's, of course, a kind of support among the pro-establishment elite in Hong Kong. And this is stunning because these people, even though they're pro-establishment would have been horrified. 20 years ago, China had declared it's going to directly apply its national security laws in Hong Kong. They would have all gasped. But now, of course, they are all in power and they want to stay there. And so they do what he says, that corporations worry that they will suffer. HSBC has its main investments. That's the Hong Kong Shanghai Bank, which is also a U.S. bank. And a British bank, actually, its home is Britain. But by its name, as its name would suggest, most of its business is in China and Hong Kong. And so while it was not willing to embrace this national security law, initially, it's now fully on board. What did I hear that the UK was willing to take some enormous number of people, if necessary, who wanted to leave Hong Kong, which was why the autonomy was granted before, as I recall. In other words, not to have everybody leave Hong Kong and worried about the oppression from China. But now the UK has restated that. What's happening? Yeah, this is actually turned out to be the biggest plank in the whole resistance. There's something in Hong Kong called a BNO passport, a British national overseas passport. When the UK handed over Hong Kong, it allowed, I think, around 200,000 actual British passports, but said it couldn't do that for what was then about 6 million people. And so that it would rather would give those other rest of those people a British overseas passport, which would be a travel document that allows them to enter countries without a visa and so on. But it only allows them to go to Britain for without a visa for up to six months. And so what Boris has done is he's suddenly declared to our surprise that those BNO passport holders would now be given a chance to go for a year. And instead of just being in Britain, they could actually work there. And if they qualify, they could get a permanent British passport. So a lot of Hong Kong people hadn't taken the BNO very seriously to qualify for it. You had to have been born at the handover in 1997. So even a lot of the youngsters who are in their lower 20s would qualify if they were born before July 1 1997. My daughter was born there a year later, so she wouldn't qualify. She also has a US passport, so that's not a problem. But a lot of her friends and people she knows do qualify. And right now only 300,000 people hold those passports. But what's happening now is they're all looking around and forgot how you get online. What do you do to get the BNO? And that number of people who qualify by virtue of being born Chinese people born in Hong Kong before 1997, there's like 2.9 million of them that qualify for that. Now, this raises a big question for the US because a lot of people are saying, okay, that gets us most of the grownups. But of course, most of the protesters in Hong Kong are younger than that. And so the question becomes what kind of further moves might the US make? We know that Trump has signaled and the State Department under a new Hong Kong Human Rights and Democracy Act has indicated that Hong Kong does not have genuine autonomy. And under that act, the Secretary of State is and was required to indicate every year whether that autonomy that's promised Hong Kong is maintained. And because of this British, excuse me, Chinese national security laws being proposed, and a lot of other shenanigans that have occurred over the past year, he said he could not certify that Hong Kong had that autonomy. And everyone agrees with that. I mean, it's pretty much would have been impossible for him to certify that level of autonomy that was promised in the basic law, given all the interference that China has had in Hong Kong. And he did his part, and that opened the door for the President to issue a some kind of decision as to what kind of sanction or what kind of action will be taken. And the President has signaled that the United States will likely no longer recognize Hong Kong special status, which would be a kind of catastrophic for Hong Kong as such, because that special status given Hong Kong. And it's given that the benefit of these countries that are willing to do it. China has asked the United States, the UK and others, Canada and so on, to treat Hong Kong specially and not treat it the same as China. So, in a way, China is complaining about foreign interference, but it has very little leg to stand on because it's actually asked these countries to treat Hong Kong separately from China, based on the high degree of autonomy. And China certainly gives them a legitimate right to do that. So, Trump has signaled to make a long story short. He's signaled, yes, the US is going to withdraw this recognition of special status, but he hasn't quite said exactly what's going to happen. And the new Human Rights and Democracy Act, which passed in Washington this past year during the protest, gives him a number of tools. He could just target individual officials, or he could withdraw completely that status, or he could withdraw it in certain areas and so on. And he hasn't told us what he's going to do yet. At the same time, and I'm sorry for the long winded story. But at the same time, the National People's Congress issued this resolution calling on its standing committee to issue a law on national security, and that this law will be promulgated directly in Hong Kong. And that law is to regulate sedition, subversion and terrorism, and even foreign interference in Hong Kong. So this idea that a national law would be applied directly in Hong Kong still is also up in the air because the standing committee has to issue the final text. The NPC, the National People's Congress ruling, specified that this law was designed to prevent, stop and punish threats to national security and terrorism and all this stuff. And I can say as a footnote here, the Hong Kong police have started labeling the protesters as terrorists. So they're trying to fit them in the box of Beijing's new national security law. Meanwhile, all these officials in Hong Kong are declaring how wonderful this law will be and how much it is needed. And they're saying, oh, it's going to be a narrow law that will only affect people who are advocating independence and so on. But no one in Hong Kong really believes that because they know that China's approach to national security has never been gentle and friendly and narrow, but very broad. So this is where Hong Kong is right now. What will be in this new national security law and what will be in the US response. And then what will the allies, they've also, there's a joint statement by Canada, Australia, the UK and the United States. What will they do themselves. So far we got Boris Johnson's, you know, BNO passport holders will be able to go to the UK. You know, I, you know, it does sound like an inflection point and it sounds like Johnson, however motivated will, whether by altruism or he wants the human capital to come whatever. It sounds like if I were if I had the ability to upgrade my, my travel documents that way I would do it. I think a lot of people will do it and and that'll leave only the younger people there. And then things will be tough. And, and I think that security law, which I think China can make that happen is who's going to stand in the way that security law is going to result in a lot of retraining into the mainland, into places like Massangia, where you get to training during the day and torture at night, and you get you get retrained over time. And the same thing with those executives you were talking about, who worry more than about their company they worry about them themselves they worry about be being retrained themselves. I think in Hong Kong now I'd be really, I'd be really concerned and anxious about the future because nobody, there's no white knight going to come in and save them. Right. And of course this is a dilemma for us policymakers in Washington. What can you do. Generally the ideas, of course, by this Human Rights and Democracy Act, which which was an amendment to a long existing law called the Hong Kong Policy Act. And so what can you actually do to sort of leverage Beijing into, you know, pulling back from this and not going so far. Now as far as I know, there's not any behind the scenes efforts to sort of calm things down. And to see this also in the broader context that the US has a trade war going on with China, and the relationship between China and the United States I mean Trump like to say he can, you know, reach deals he's the deal maker with everybody but it's a deal making disaster in some ways because we know North Korea is also going crazy today, telling you know that he's no longer going to talk to South Korea. So his love affair, as he used the term with Kim Jong-un is also a bit in trouble. And at the same time his relationship with Beijing and this trade war is a problem. And for Hong Kong, there's a little bit of uncertainty as well as to whether Hong Kong is just a pawn in all of this, and what will happen. I will say that most of the Democratic camp is happy to see the United States step up, because they see no alternatives they they have gone to the streets in the millions. They've done everything from non violence to violence they've done it all and none of it that it's not heard, either by their Hong Kong officials or by Beijing. So, so this is a problem and the US then has this big global relationship with China, and the rest of the world is standing by at this inflection point, because we know that China is like the Cold War, it's a struggle between authoritarianism and democracy. And right now, democracy is not doing so well because the leadership in Washington, and actually in London as well, is not the kind of leadership that we would hope. We haven't we haven't helped them we haven't stepped up. You know, even with even with the bully pulpit, we haven't, you know, tried to cool it off we haven't tried to talk to Xi Jinping and stop it and that's consistent isn't it with American policy over the past few years. What happened, we don't say anything. We don't use any tools, we only do this kind of tariff war thing and war of blame but we don't actually try to affect their conduct as it regards other territories like the South China Sea the East China Sea, all that is we have no influence on those things. The trick is and where I stand because I deal a lot also in South Asia, India, and East Asia as well, is that the US has policies on these things and in the trade war, you know, there was actually a lot of support for getting tougher on China because it didn't seem the go go softly approach was working, but to make even a tougher approach work, you need diplomacy. And what we found is that in the current administration that they've cut off most of those avenues, they abandoned TPP almost you know that the trade agreement, almost from day one and that that would have been a very good vehicle to get allies together to divide in policy and dealing with China. So then that the way they're acting now over Hong Kong is also problematic because there's no diplomacy with our allies the Europeans are like the deer in the headlight they don't know quite what to do. So China is very adept at using United Front tactics to divide and conquer in Europe, rewarding the countries that they go along to get along and punishing those who don't. So, so this kind of leadership seems to be missing. I don't like to see the US bowling the rest of the world, but I think the US is basically inherited a position of leadership in the world. And right now, this America first approach hasn't been delivering what those. But it but it does suggest that, you know, when, when, what is it when that when when the chickens are away the fox will play or whatever the old slogan is. I think Xi Jinping sees that Trump is a paper tiger. He sees he does that Trump doesn't follow through that Trump doesn't really do diplomacy doesn't even speak on the subject. He has no consistent policy. And Xi Jinping says okay, this is a great opportunity for me. I'm going to do what I wanted to do before I'm going to take over I'm going to cut the autonomy I'm going to, I'm going to move 2047 till right now. I'm going to control this place and and that'll be good for me because it'll show the people in China. I'm really in charge. It'll show the people in Xinjiang I'm really in charge, and I will use all these things because nobody is going to stop me nobody, not Europe, not anybody in Asia, not the United States. And so this is his moment isn't it. And, you know, and I suggest that that he is more involved in all the time. Because if you get away with something that you, you know, make another target to try to get away with that. Yeah, I think one of the things about I think you're right I think the thing about China is you can actually get tough on China in some ways they respect that. They expect if you have an interest that's contrary to theirs that you're going to step up and take care of it. But if you do that in a way that's ineffectual, or you feign that you're not doing that, you know, your buddies and back slapping. Then, they're not children they know how to deal with diplomacy they know how to take care of their business, and they will do so. And I think even in the prior administration I think Obama when he first took office he had in his character he had the idea that I didn't want the United States to be a bully that I'll be nice to China. And, you know, it would be more respectful and I think they took advantage of that and he quickly learned and unleashed Hillary Clinton on them to be tougher. Basically, if you want to succeed in the relationship with China, you have to identify what your goals are and work with your allies engage in diplomacy and stand tough when you need to. And that's what they expect from you. I mean they're always quoting their ancient strategies and they expect it from you. If there's a sign that you don't know what you're doing that they're going to take advantage of. Yeah, move right in. Now what about what about Taiwan? You know there's a similar issue about control in Taiwan and the future of autonomy is the right word but maybe it is. In the autonomy of Taiwan, we're trying to want it. China is making all efforts it can but it's not nearly as successful because Taiwan is a democracy in a much truer sense. So what's happening there and how does this play with Hong Kong? Well, this plays hugely with Hong Kong. The thing that we know from opinion polls that prior to the recent election, Tsai Ing-Wen was actually going to lose. And then the woman down the Nationalist Party was set to win. But what happened is Hong Kong. And when everybody in Taiwan saw what Beijing was doing in Hong Kong was happening in Hong Kong. The political tide shifted dramatically. So one of the things that's been true for years and pretty much every time the DPP has won in Taiwan it's been because of Beijing shenanigans either putting more missiles in place or whatever threatening Taiwan. So whatever they want to happen in Taiwan, usually they manage to orchestrate the opposite happening. And even now part of the story in Hong Kong offering some, I haven't followed the latest statements on it but it's some kind of asylum options for Hong Kong activists. And so one of the expectations is that some Hong Kongers will be moving to Taiwan if the situation gets really bad in Hong Kong. And with this national security law the risk of Beijing overreaching increases exponentially. So this is where it's at in Taiwan. As it moves away from Beijing and there's even pressure there to declare openly independence, then the threat of war gets serious. And I don't know if the current US administration is up to the task of handling a race crisis in America, a pandemic and a war in Taiwan and the Taiwan Straits. So let's hope things stay under control. It's even optimistic to think of that possibility. In the meantime, our relationship with China and whatever is left is deteriorating with the blame game going both ways. And the tariff certainly war is not over. And Trump is pushing Chinese students out of the country. The Chinese are closing the border against Americans. It's not a time you want to go there and try to get a job as it was clearly the time 20 years ago. Go to China, get a job, make a career, you'll make money, you'll find friends, you'll drink beer in the sidewalk cafes. I don't think it's like that anymore, is it? Yeah, it's become tough. And I think young people may be more worried about doing this. I know the Chinese, as you know, the Chinese students are the largest group of foreign students in the US. If we get to 300 and some 1000, yeah. And Beijing also uses its tactics in the US and some of their tactics have become more famous in Australia, where they've tried to influence university policies and get students expelled who protest against China and so on. But in the US, there's these organizations like the Chinese Students and Scholar Association and the consulates and so on have influence. Becca, I've heard that the largest group of CSA members is in the University of Hawaii, actually. So there's big membership there and it's been said, told to me and I haven't directly researched it that the actual head of that association on the west coast in Hawaii is literally picked by the console, Jim Beijing's console general in San Francisco. So China uses its skills to mobilize students and get protest going and so on. And now recently, during the episodes last year I was on a speaker panel with Joshua Wong and others at Columbia University and it was interesting to see that the police were all around the building where we were going to have this session. And the cues to get in were so long that not even half the people could get in. And then there were students standing up to sing between his national anthem in the middle of an everything. And this is at a university where the university had abolished the CSS on campus. This is something that's known and then of course you get into the big fight about Chinese scholars who study engineering and chemistry and stuff, whether they're going to get visas to the United States. You know, our campuses are aflame with all these disputes between China and the United States. And I heard that the Confucius Society was strong in Canada, Canada closed them all down. I don't know where the Confucius Society is right now here in the US, but it's nice to say is a lot of contention, and it's part of an unraveling it looks like to me, of the relationship that was pretty sweet. It was 18 or 20 years ago and we were all in the same boat working together for a better economy, but trade relations, and trying to teach the Chinese. I use I don't mean that in a negative way but trying to bring them along and show them all our stuff so that we could be partners. They may have seen it more as an opportunity than a better than an equality but suffice to say, that's gone. I worry about it being part of a historical, historical drift toward hustle relations and even war. Yeah, I think there is that danger and the regime in Beijing is, we were fond of saying has a kind of legitimacy we call performance legitimacy. I know that, while the US government for all of its ills has a democratic form of legitimacy because it's actually elected in China that's not the case. And, and so what will a regime do when the economy is collapsing or they have problems. They of course had a Coronavirus and become also part of the information war. And so we know that they, they virus first showed its head in China, Wuhan and assuming that was the cause of it the source of it, then China has got into a big propaganda campaign to show how well they've handled it in comparison to the United States which has the highest cases. So this, this, this conflict is multi directional it involves trade and aid it involves technology it involves outreach to other countries and who's going to be friends and who's not. It involves the South China Sea. Now it involves Hong Kong, and in some ways Hong Kong's like the frontline of this, and the situation is is rather dire at the moment. More than just US trade interests I think everybody in the world admires Hong Kong, it's just one of the most admired cities on earth. And so to see it put through this, this turmoil and this threat. I think bothers us all of course in Hawaii we worry more about it because we have so many people whose roots and whose family ties and stuff are there. Because most of the Chinese that originally came to Hawaii came from the southern part of China and Guangdong and so on so Hawaii's connection I think is especially important. There's an operatic tragedy here, a Shakespearean kind of tragedy because you know that it never never goes back history never moves back. It always moves forward and you know if you say well there are only a limited number of logical options for the way this is going to go. One of them is of course that somehow Xi Jinping relents for some reason I can't imagine that reason right now, and he gets kinder and gentler. They go back to some level of autonomy, or at least stability. The other option is that he becomes more repressive, and that that really does seem like a likely possibility given the fact that nobody's standing in the way and it serves his interest to do that. You know, in very not only in Hong Kong but other places other, you know, including Europe, it's going to look good for him to control the situation in Europe. So I see that as the other major fork in the road here, and I suggest to you, that's probably where this is going to go. Isn't it? It's very difficult and very risky at the moment. I can say one of the things that has been a pet peeve of mine is that Hong Kong itself, the government in Hong Kong and the corporate elite in Hong Kong. In some ways in this autonomy model were charged with an intermediary role that they could maybe soften Beijing's attitude towards Hong Kong by representations they could make in the interest of Hong Kong. And I think this has been one of, in fact, I'll be honest with you, I've written an op-ed that I'll probably send to you in a day or so on this, that one of the big deficiencies is they're not representing Hong Kong well. It seems that they're in the game to stay in the game and saying what Beijing wants and doing what Beijing wants is in their view more rewarding than representing Hong Kong's core concerns to Beijing and trying to mediate and moderate Beijing's approach to Hong Kong. Their approach is very much in the authoritarian, hardline authoritarian playbook. Now, we do have wiggle room at the moment, but I'm not optimistic that it will be taken advantage of and that is because this national security law has not been finalized yet. So that would leave room. I mean, there are very concrete issues on the table. This law is, you know, in Hong Kong, like in the United States, the court of final appeal and all the courts can exercise review over laws. So if a law is passed that violates your free speech and you're arrested, you can bring that up in court and the court can exercise what we call constitutional judicial review and decide whether that law violates the guarantees in the Constitution or in the Hong Kong case in the basic law. And the courts in Hong Kong do this all the time. So this is one of the great things about Hong Kong. It really has the rule of law, at least up until now, and the courts can do that. But what are the courts going to do with a mainland law that's suddenly injected into Hong Kong? Are they going to be able to declare some part of that mainland law to be in violation of the rights guarantees in the chapter on rights in the basic law? That's very doubtful. My guess is Beijing will probably even when they issue it will declare it conforms to the basic law. So if you take, this is a very practical consideration because the heart of the Hong Kong difference is the rule of law. And the protection of the rule of law is the very basis for wanting Hong Kong to have autonomy so that Beijing can't interfere in the basic law. The basic law is full of language saying that mainland departments shall not interfere in Hong Kong, that Hong Kong shall pass national security laws on its own. It says that literally on its own, and I'm quoting, all these things designed to keep Beijing's, this two systems, that system from interfering in Hong Kong. And part of it is this power in the courts and quite frankly because Beijing has monopolized the government and has ways that it monopolizes the legislature. It has been the courts and the people that have been able to guard Hong Kong's autonomy. The courts do it in the courthouse and the people do it on the street. And so, for them to do it on the street their rights need to be protected from overreaching national security laws and secrecy laws and public order laws and so on and the courts are the ones that do that. So this is at the core of how this thing works. Now what do you do? What will the courts do with this new national security law if its language is vague and overreaching and in the NPC ruling which is going to be part of this law, it declares that mainland agencies on national security will be set up in Hong Kong. Now, if these officials now behind the scenes allegedly going to supervise the police in investigations, if they behave in a way that violates basic rights of protesters and whoever. Professors perhaps, journalists, if they are behind the scenes doing things that violate rights, will the court be willing to declare their actions, not just the law itself, but their actions in violation of the Bill of Rights in Hong Kong. Maybe in the short term but not in the long term. When I get out of this actually Michael is that is that the, there's a group of business guys, bankers, financiers, international but you know Chinese living, living in Hong Kong to invest money into mainland China, and they make a huge amount of money. And they've been compromised. I think the Chinese government Xi Jinping and his representatives have somehow compromised them with the notion that they can continue to do this. They can continue to be the funding source and make all the money. As long as they don't get in the way of Beijing's attempt to, you know, repress the young democratic contingent in Hong Kong. And I suggest that over time what's going to happen is Beijing will repress that group. And the fellows who are compromised will continue to make at least some money, and autonomy will be lost. In other words, the democratic street people are going to be thrown under the bus in favor of some money and power. And this is more than it seems on its face because once you put in place a system where Beijing officials can determine who are winners and losers in Hong Kong's economy by you either sign on and declare you want this national security law, or your toast. Once they have the power to declare winners and losers, then what used to be rated every year as the freest economy in the world will no longer be the freest economy. It will start looking like the mainland economy with official fingerprints all over who wins and who loses. And of course, in that world speaking out would be at your own peril. Sounds like small potatoes because of course the Hong Kong economy used to be 20% of China's. Now it's about 3%. Don't imagine that that is what it seems. Nothing is what it seems when it comes to Hong Kong. Most of the foreign investment, something like 70% of China's overseas investment into China passes through Hong Kong because it has the rule of law and pretty much all of the red capitalist in China set up in Hong Kong so that they can participate in the global trade regime without having interference from Beijing. So while the overall economic, you know, the economy may be a smaller portion is a very important portion. So one of the things that's stunning here is it looks like Xi Jinping is willing to sacrifice it in order to maintain a CCP control. Yeah, this is what's happening. I only have one more question for you Michael before we have to go and that is, you know, you spent a good part of your career in Hong Kong, and maybe maybe some would say those are the best days in Hong Kong. And, you know, there are always people who are looking for, or should be people in the United States we're looking for adventure I think there are fewer of them these days now. Just because of COVID because of many things. But would you ever go back, would you ever go back to live there work there teach there right there do business there. I definitely would if I wasn't going to be arrested. I mean, I, Hong Kong is is an exciting place. And I do know and have friends who are young professors who are there. They're Americans and they, they're in the middle of all of this. I don't know quite how to deal with it. I was there at the, at the get go so I kind of got in on the first day, and have a status as a public intellectual which perhaps allows me to say and do things that I would do at my peril, maybe not getting tenure or not getting promoted or all these other things that young scholars worry about. But, and those tools have been around for a long time. But it's an exciting place to work. And I hope China doesn't ruin it but but I think if if it becomes a place just speaking now not of human rights lawyers like myself, but of business lawyers or business men or, or other sorts of people. Then I think if it becomes a place where China's picking winners or losers, then I think there may be a lot of business move out of Hong Kong. They become wary of we know people invest in China because they make money. But what is you know the tipping point where it no longer is a viable or a safe because basically businessmen are looking at political risk. And so that's the question, but otherwise working in Hong Kong and with Hong Kong people is as good as it gets. It sounds like there's a lot of this tilts on on the United States. If we had a working State Department with policies and implementation. If we had, you know, executives in our government who could fashion real engagement with them. The future of Hong Kong it seems to me would change would improve. Maybe that'll happen. It's hard to say the trick is is someone who who can calibrate how to be firm and still at the same time do diplomacy and the work that needs to be done to conduct a relationship. And, but I hope it doesn't means someone who will just give it give Hong Kong away in order to do a deal. Hong Kong doesn't deserve that. Michael Davis it's so good to talk to you. I hope it can catch up again, and I'm sure there'll be plenty to talk about next time too. Very good I look forward to a Jag maybe one one time I'll eventually get myself over there to do it. That's what I've been looking forward to. Okay, in the meantime, wash your hands and wear a mask okay. Doing