What began as a series of marches in Hong Kong against proposed legislation to allow extraditions to mainland China has erupted into a broader challenge to Beijing’s grip on the city. The local government suspended the bill in June and declared it “dead” in July, but protests continued -- as did outbreaks of violence and vandalism. Frequent scenes of police firing tear gas at demonstrators in the global financial hub have raised questions about how far the central government in Beijing is prepared to go to assert its authority over the city’s 7.5 million people. President Xi Jinping, on a visit to Hong Kong in 2017, warned that challenges to its rule wouldn’t be tolerated.

1. Isn’t Hong Kong part of China?

Yes, but it’s a semi-autonomous region. The city was an outpost of the British Empire for 156 years, during which time it developed into a global business hub. In a 1984 joint declaration, the British agreed to give the city back in 1997 and China promised to allow a “high degree of autonomy” for 50 years -- until 2047 -- including guarantees of free speech, capitalist markets and English common law under a “one country, two systems” arrangement.

2. Why are people still protesting?

Hong Kong’s leader, Chief Executive Carrie Lam, has declared the extradition bill “dead” but stopped short of formally withdrawing it from the government’s agenda, meaning it could resurface. However, the protesters’ list of demands has grown wider, to include Lam’s resignation, an independent inquiry into police conduct and the release of a growing number of detained protesters -- dozens of whom are facing as many as 10 years in prison on a colonial-era charge of rioting. Some pro-democracy activists have revived calls for electoral reform, including direct elections for the chief executive, amid fears that personal freedoms are being increasingly restricted under Beijing’s rule.

3. What does China say?

Its Hong Kong and Macau Affairs Office has defended the police and city government and called on Hong Kong residents to “stand firm and guard our beautiful homeland” against “the very small group of unscrupulous and violent criminals and the dirty forces behind them.” Director Zhang Xiaoming has rejected any compromise until the disturbances end, according to a city lawmaker. Chinese officials and state media have made charges of foreign interference, describing the U.S. as a “black hand” behind the protests -- a claim the State Department has dismissed as “ridiculous.” Chinese officials have repeatedly warned against undermining or challenging the central authority or the “one country, two systems” principle. The People’s Daily, the Communist Party’s flagship newspaper, said that Hong Kong’s top priority was to punish criminal acts and restore social order.

4. How bad might this get?

That depends on China. Troops from its People’s Liberation Army have been in the city since the 1997 handover, but have played a minimal role in day-to-day affairs. Concern has grown that soldiers might be called on to restore order, especially after the garrison posted a video on social media showing Chinese troops practicing riot control. The Hong Kong and Macau Affairs Office has not ruled it out. For some people, the greatest fears are a crackdown mirroring the one three decades ago on mostly student protesters in Tiananmen Square, and a subsequent U.S. withdrawal of the special status under which the Americans agreed to treat Hong Kong as distinct from China for trade and economic matters.

5. What’s the problem with extradition?

Opponents say the law could open the door for anyone -- including political dissidents or civil rights activists -- who runs afoul of the Chinese government to be arrested on trumped-up charges in Hong Kong and sent to the mainland, where they would face what the U.S. State Department called China’s “capricious legal system.” The law would apply to Hong Kong citizens, foreign residents and even people passing through on business or as tourists. Critics noted the draft bill assigned to the city’s chief executive -- chosen by a committee stacked with Beijing supporters -- the leading role in handling extradition requests; currently the legislature can block extraditions.

6. What does Hong Kong’s government say?

First off, that the bill is needed to prevent Hong Kong from becoming a haven for criminals, and that it has been amended to protect human rights and ensure suspects aren’t extradited for political offenses. More broadly, Lam has warned of a “very dangerous situation” as the protests become more disruptive to daily life. She has said protesters are threatening people’s livelihoods, the city’s stability and the “one country, two systems” structure.

7. Have the protests affected business?

It seems so. The economy was already under pressure from the U.S.-China trade war. Flag carrier Cathay Pacific Airways Ltd. said ticket sales dipped in July and future bookings were hurting. Visits to Hong Kong Disneyland have suffered. The city’s vital retail sector reported sales slumped more than expected in June, the fifth straight month of declines. Small businesses reported feeling more pessimistic in July than at any time in the past seven years. Richemont, owner of Cartier, echoed Swatch in saying that protests in Hong Kong, the top export market for Swiss watches, weighed on sales due to store closures and lower tourist arrivals. Lam said in July that she saw “no room for optimism” for her city’s economy this year. Financial Secretary Paul Chan warned on Aug. 5 that Hong Kong risks a recession if the disturbances continue.

8. Have protests worked before?

Yes, but less so lately. In 2003 demonstrations blocked a proposed national security law and contributed to the resignation of then-Chief Executive Tung Chee-hwa. Nine years later, high school students, parents’ and teachers’ groups thwarted the Hong Kong government’s attempt to introduce a course lauding China’s Communist Party and criticizing democracy. But the pro-democracy movement fractured after the government successfully faced down student-led demonstrators who occupied city streets for 79 days in 2014, refusing to yield to their demands for direct elections for the chief executive. Since then, China has barred some activists from seeking elected office, prosecuted protest leaders and banned a pro-independence political party.

9. Are there any other potential flash points?

Hong Kong still has to enact national security legislation to prohibit subversion against China and activity by foreign political bodies. Lam has said she wants to create a “favorable social environment” before reintroducing it. Hong Kong is also considering making disrespecting the Chinese national anthem a crime, with prison sentences of as long as three years. And there were protests last year after Lam outlined a project to build artificial islands between Hong Kong island and Lantau to the west. Detractors object to the estimated $80 billion cost and the environmental impact. The islands would help accommodate a continuing influx of mainland Chinese, whom many Hong Kong residents blame for rising property prices and overcrowded public hospitals.

To contact the reporters on this story: Fion Li in Hong Kong at fli59@bloomberg.net;Carol Zhong in Hong Kong at yzhong71@bloomberg.net;Karen Leigh in Hong Kong at kleigh4@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Paul Geitner, Grant Clark

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