The U.S. Congress is moving closer to making a statement in support of Hong Kong democracy protesters -- to the dismay of China’s leaders. Legislation advancing in both the House and Senate would amend the United States-Hong Kong Policy Act of 1992, a pillar of America’s economic relationship with China and its special administrative region, Hong Kong. Under that law, the U.S. treats Hong Kong differently than the People’s Republic of China for trade purposes. Rescinding the arrangement would effectively turn the Asian financial hub into just another Chinese city, a seismic shift.

1. Is the U.S. rescinding Hong Kong’s special status?

No. Congress isn’t going that far, and President Donald Trump -- who could suspend Hong Kong’s preferred status with a stroke of his pen, through an executive order -- has said nothing to suggest that’s on the table. Steve Tsang, director of the University of London’s SOAS China Institute, said such a move would be “the nuclear option” and “the beginning of the death of Hong Kong as we know it.” The U.S. has its own reasons for not rocking the boat that much: Hong Kong is the only semi-democratic jurisdiction under Chinese rule, offers U.S. companies a relatively safe way to access the Chinese market and employs a U.S. dollar peg, linking it with the American financial system.

2. Then what is Congress considering?

The Hong Kong Human Rights and Democracy Act of 2019 would require the U.S. secretary of state to certify, as part of an annual report report to Congress, whether Hong Kong remains sufficiently autonomous from Beijing to justify its unique treatment under U.S. law, “including the degree to which Hong Kong’s autonomy has been eroded due to actions taken by the government of China.” The legislation also would:

• Require the president to freeze U.S.-based assets of, and deny entry to the U.S. by, any individuals found responsible for abducting and torturing human rights activists in Hong Kong.

• Require the president to devise a devise a strategy for protecting U.S. citizens and businesses from rendition to China or other countries deemed lacking in protections for the rights of defendants. (It was the Hong Kong government’s introduction of such an extradition bill, since withdrawn, that sparked the protests.)

• Establish that U.S. visas won’t be denied to applicants from Hong Kong on the basis of them having been arrested or detained while protesting for democracy or human rights.

3. What’s the bill’s status?

Similar versions of the bill advanced swiftly through committees in the House and Senate, underscoring bipartisan support. The legislation could be brought up for full votes by the end of the year. If it were to pass, the White House hasn’t said whether Trump would sign it into law.

4. How has China responded?

With “strong indignation and firm opposition.” Chinese Foreign Ministry spokesman Geng Shuang has accused the congressional committees of disregarding the “vile behavior” of “violent radicals” and of “gross interference” in China’s internal affairs, adding that the Chinese government would respond with “forceful fightback” to any attempt to harm its interests. The official Xinhua News Agency used stronger language in a commentary that accused U.S. lawmakers of “smearing China to score cheap political gains as usual.” It blasted as “groundless” accusations about the loss of freedom or human rights issues in Hong Kong, noting that the 2018 Human Freedom Index compiled by the Fraser Institute, a Vancouver-based think tank, has Hong Kong ranked No. 3, way ahead of the U.S. at No. 17.

5. And Hong Kong?

The city’s leader, Chief Executive Carrie Lam, said it would be “totally unacceptable” for foreign lawmakers to interfere in Hong Kong’s internal affairs, and that any sanctions would only complicate the problems in the city. (Lam was selected in 2017 by a committee of 1,200 political insiders overwhelmingly loyal to the Chinese government.) She has sought to reassure investors that the city still adheres to the rule of law and has an independent judiciary. She also has defended police actions and said the city risked sliding into an abyss.

6. Is this what the protesters are seeking?

As a largely leaderless movement, the Hong Kong protests have made no official request for international assistance. But some prominent Hong Kong pro-democracy activists including Joshua Wong have testified in Washington in favor of the bill to put pressure on China. On the streets of Hong Kong, some protesters have made clear their interest in U.S. support by waving American flags, singing “The Star-Spangled Banner” and calling on Trump to “liberate” Hong Kong. But Trump has been much quieter about Hong Kong than he has about China’s trade practices, for instance. Trump even congratulated China on its 70th anniversary under Communist rule.

7. How autonomous is Hong Kong?

When Britain handed Hong Kong back to China in 1997, the Chinese government pledged that the city would have a “high degree of autonomy” in its legal and economic affairs for 50 years, under an arrangement known as “one country, two systems.” (China’s President Xi Jinping again endorsed the arrangement in his Oct. 1 National Day speech.) The 2019 U.S. report on conditions in Hong Kong said the city’s autonomy was “sufficient -- although diminished.” After the protests erupted in June, the State Department said that “continued erosion” of Hong Kong’s autonomy put its “long-established status in international affairs” at risk.

--With assistance from Josh Wingrove.

To contact the reporters on this story: Iain Marlow in Hong Kong at imarlow1@bloomberg.net;Daniel Flatley in Washington at dflatley1@bloomberg.net

To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net, Paul Geitner, Laurence Arnold

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