February 26, 2019
Michael Chugani (MC): Hello, I’m Michael Chugani and this is Straight Talk. With me today is the US Consul General, Mr. Kurt Tong. Thank you very much. Now, Mr. Consul General, you were here about a year ago.
Kurt Tong (KT): About a year ago, yes. Thanks Michael.
MC: In that year, a lot has happened. Since you last came, we’ve had the trade war, we’ve got legislative councilors who were disqualified, we’ve got a national anthem law and we have a Congressional report that said we should reassess the Hong Kong Policy Act.
I’m going to start off with the trade war because just yesterday President Donald Trump said okay, negotiations have gone well and he’s going to delay the tariffs for a while. Now, Mr. Consul General, a lot of people say, critics say, that the trade war was not necessary, and it was America’s way to try and suppress the rise of China. Would you say that was true?
KT: Well, thanks Michael and thank you for having me again this year. It’s been… I enjoy this… it’s a really good opportunity to have some dialogue.
The situation with the ongoing trade negotiations, I would characterize it as “we’ve entered a second overtime.” We had a brief first overtime for about two days and then the president, as you said, has indicated that he’s going to postpone raising U.S. tariffs for a period of time while we have further negotiations.
I think the U.S. continues to have high expectations for these talks. There’s a lot of very important structural issues that we’re now substantively engaged on. We have a clear agenda and there is reason to think that we can actually have a significant breakthrough in improving the nature of the U.S.-China economic relationship, which the U.S., as you know, had a lot of points of dissatisfaction with. So, I’m hopeful that these negotiations would go well and that is very much the intentions of the talks…
The tariffs, you know, are an action-forcing event. They focus the mind and they help China understand to the degree of which the U.S. really considers these problems that have built up in the nature of the U.S.-China economic relationship to be very serious.
MC: Was it necessary? Because people say that it’s hurt both the U.S. and it’s hurt China, it definitely has hurt Hong Kong, and that it could’ve been settled without tariffs, and that by imposing these tariffs, President Trump is trying to, I ask again, to suppress the rise of China.
KT: That’s clearly not the case. We’re not trying to suppress the rise of China, we’re trying to interest China and create incentives for China to focus on significant problems that are…
MC: Have they been playing unfair?
KT: Who?
MC: China. In trade.
KT: Yes. Absolutely, it’s been an unfair…
MC: In areas like technology transfer, forced technology transfer.
KT: … Unfair and non-reciprocal on trading relationship in the way it’s been structured, and particularly, with respect to technology and investment. So, we’ve focused the mind through tariffs and have had negotiations. This is not uncommon in global commerce or trade negotiations.
MC: Sure, now the thing is that I’m going to link that with the Huawei issue, with the arrest of a senior Huawei official.
KT: Well, that’s the wrong thing to do, because they’re not linked.
MC: Okay, they’re not linked. But you know, it’s been said that the two are separate. I understand that, but people, critics look at it as one whole thing. You’ve got the trade war, you’ve got the arrest of the Huawei official and then you’ve got the U.S. trying to stop Huawei into dominating 5G. All these things combined…
KT: Well, critics…
MC: …will give people an impression that they’re trying to suppress the rise of China.
KT: Right, and those people, those critics are incorrect. There is no linkage between the Huawei technology issue, the specific case against Mrs. Meng or the ongoing bilateral trade negotiations. These are separate things and that’s the way the real world works.
Now, there’s a talking point that is being issued by the Chinese side that the United States is interested in containing or suppressing China.
MC: Right.
KT: That is a talking point also intended to create leverage and motivate people to…
MC: You’re not trying to do that?
KT: Hmm?
MC: You’re not trying to do that? The U.S. is not trying to do that?
KT: That’s right. We’re trying to resolve specific problems in specific ways using specific levers. When someone breaks the law, you have a law enforcement action.
MC: Sure.
KT: When there’s a technological risk, that will be considered, debated and as you have seen there’s been a lot of countries considering the right way to deal with risk mitigation, with respect to technologies coming out, particularly 5G. And in the trade area, trade and investment area, you have a negotiation. If you need to create leverage in order to have that negotiation, you create leverage and have a negotiation. This is how the real world works.
MC: Okay, I’m going to bring the issue back to Hong Kong now because we’re in Hong Kong and I think one of the things that concerns a lot of Hong Kong people, especially businesses in Hong Kong, is that Congressional report that came out that said that because they see Hong Kong’s autonomy is diminishing, perhaps it’s time to reassess to giving Hong Kong a special custom’s status, right? Now, you have said, Mr. Consul General, that they’re not going to take… the U.S. is not going to take back the Hong Kong relations act for the time being, is that right?
KT: So, the most important point to make is… since you’ve segued from trade negotiations to the Hong Kong policy act … there’s no relationship between those issues as well.
MC: Yes, of course. It’s a separate issue.
KT: It’s an entirely separate issue. The Hong Kong Policy Act is a piece of legislation that allows the United States to treat Hong Kong differently than it treats the rest of China for the purposes of U.S. law. That will continue as long as Hong Kong continues to be substantively autonomous in those various areas of US law.
So, I think… again, it’s a much more legalistic, methodical, scientific conversation that is often portrayed. So, I think that… We will issue another report again soon, coming out of the State Department, and the Consulate assisted in the creation of that. It will report the reality of Hong Kong’s situation on autonomy.
MC: What is the reality, Mr. Consul General?
KT: The reality is that Hong Kong continues, in many ways, in many areas, to enjoy a high degree of autonomy. But there are issues and areas for concern.
In particular, this last year, 2018, was not a particularly good year for Hong Kong’s autonomy. There were signs of increasing pressure being put on Hong Kong’s political space, and some unfortunate events that happened in 2018, which create a sense that Hong Kong maybe losing some of that grip on autonomy.
So, I think the report is likely to reflect that fact, but also it will be fair in assessing the overall balance of the pros and cons with respect to autonomy.
MC: I’m going to try and pin you down on that. Now, the last time you were here, you said that the emphasis seems to be less on autonomy and more on “One Country.” That’s what you said last time. Now, you’re saying a new report is coming out…
KT: It’s required by Congress.
MC: Sure, right. And things have happened, unfortunate things. I think what you meant was that you’ve had candidates being disqualified to run in elections, you’ve had a foreign journalist expelled for hosting a talk at the Foreign Correspondents’ Club by a pro-independence party. Then you’ve got people in Hong Kong saying free speech has limits, you cannot even talk about independence.
You, when you were last here, you said, free speech is free speech, right? And as long as it’s peaceful, it should be allowed, right?
You’re now saying that the new report, as required by law, will come out soon and it will reflect these things. How strongly will it reflect these things… that the autonomy is now under threat?
KT: Well, the report is yet to be issued. You know, I don’t want to lessen your enthusiasm for actually reading it when it comes out.
But the point that matters is that I think there’s been a trend in the last few years, and in 2018 in particular, of emphasis on “One Country” in ways that impinge on the realization on the full benefits of “Two Systems,” and the autonomy, the high degree of autonomy, that Hong Kong is supposed to enjoy under the Basic Law.
So, the thing that concerns me is that the concern from the mainland side about politics in Hong Kong… Hong Kong politics is different than mainland politics and… I understand that that’s uncomfortable for the mainland.
But that counter-pressure that is then being applied can impact the political sphere in Hong Kong, in a narrowing of political space. A deeper concern for U.S. interests is that it could, actually, over time, start to influence the economic sphere as well.
And really … this year we’re experiencing… we’ve enjoyed the 175th anniversary of our Consulate. We’ve spent a lot of time reflecting on what our Consulate is about, what the U.S. presence is about in Hong Kong. When you really dig into it, a lot of it is about economic ties, trade, and investment, and business.
And, if that political atmosphere changes to a sufficient extent it ends up hurting the business environment, that would be very problematic, I think, for everyone involved, for the United States, for China, for Hong Kong people certainly, and even for the region.
MC: Okay. Quick break. See you soon.
Thanks for staying with us. This is Straight Talk. With me is Mr. Kurt Tong, he is the Consul General of the U.S.
Now, Mr. Tong, before the break, we talked about the U.S. Policy Act, I think that is one thing that concerns a lot of people in Hong Kong. And you did say that what concerns the U.S. is that, as people see autonomy eroding, and more focus being put on “One Country” rather than “Two Systems,” it could then spill into affecting business ties, the business atmosphere, and that concerns the U.S. … because you have got a lot of companies in Hong Kong that do business here, right?
KT: Yes. A huge presence.
MC: Exactly. Now, you know last year when you are here, you did say, and I will say it again, that you felt that emphasis is now more on “One Country” than “Two Systems,” and autonomy is eroding. A new report is coming out, again, and I am sure, even though you won’t tell me what it is, it is still being done, I don’t think that it will say “everything is fine.” I am sure it will say that “things are not fine,” right?
Now, how much worse does it need to get before the U.S. Congress says “okay, now we must take a serious look at whether we should give Hong Kong special status.”
KT: So, there is no “autonomy meter,” right? And it’s not…
MC: That I do know, but Mr. Consul General, you have said that…
KT: Let me…
MC: Okay.
KT: It’s not… so my point being that it is not a black or white question. And the report, it will be very careful to be fact-based, to be careful in assessments, and make sure that we get our stories straight.
The Hong Kong Policy Act provides a legal framework for a variety of activities and cooperation, and the application of U.S. law, to the relationship between the United States and Hong Kong.
The likely way that things will happen going forward is that there will be some scrutiny of the various aspects of implementation of that law. And, if there is autonomy in those areas of application, then it will continue just fine. And I expect that to be mostly the case in most areas going forward.
If in a specific area of bilateral activity, like say law enforcement cooperation, things are going great, Hong Kong is showing a high degree of autonomy, Hong Kong is acting like a “Two Systems” special place, then the U.S. will continue to treat it as such.
MC: But in what areas do you feel that autonomy is eroding?
KT: Well, the biggest implication, I think, is in the political sphere, again, that political activities have been constrained. You talked about some of the negative events with respect to freedom of expression, over the past year…
MC: Will those things be…
KT: And that’s the concern. So that is the general background.
Then, when you consider the Hong Kong Policy Act and U.S.-Hong Kong cooperation, in some ways it’s more specific to various activities.
MC: Do you expect, I know this is like you don’t know yet, but do you expect that when the report comes out, it will be more critical than the one before?
KT: Well, I think, given what I have told you about our assessment of the previous year, I think that could be the case, yes.
MC: It would be more critical than the one…because the one before drew a very angry response from Carrie Lam, the Chief Executive, right? So, you said the new one coming out will be even worse?
KT: It’s an uncomfortable thing for one government to make a report about the activities of another government…
MC: Sure.
KT: … either the Hong Kong government or the mainland government. That’s an uncomfortable thing, people sometimes react to that. I get it. We are required by law because of these special circumstances of “One Country, Two Systems,” and because we’re being allowed under U.S. law to apply these special – positive – aspects of a unique relationship…
MC: I’ll ask you…
KT: … We are required to report on it, and we will report on it. And people might not like what we say, but we…
MC: But it’s the U.S. law, so you report on it, right?
Now, I am going to ask you one more question, and then I will move on. Now, you think the report will be worse than the one, well, more critical than the one last year, right? Okay, fine. Now, can I assume that it will be more critical because in that year, you have had candidates being disqualified, you have had a journalist being expelled, you have had a political party being banned, and then the insistence that you cannot even talk peacefully about independence, if you do you will no longer be able to run for elected office again. Are these the things that will make the report more critical?
KT: You have cited some important examples of what we would consider negative trends in autonomy in Hong Kong’s political space.
MC: So those were the issues that will make the report more critical?
KT: Again, I hope you look forward to reading it.
MC: But then the point will not be reached. In your opinion, as Consul General, the point will be not reached for the Congress to say, “we are going to take away the Policy Act?”
KT: Well, the Act … would require another act of Congress to change, and I haven’t seen anyone suggest that.
MC: All right, okay. Now, I am going to move on. We have got another thing here now that a lot of controversy, an extradition proposal from the government, stemming from an alleged murder case in Taiwan involving a Hong Kong person.
KT: Right.
MC: Now, you know, the funny thing is a lot of people in Hong Kong, politicians saying “fine, let’s have one with Taiwan,” but they’re worried about having one with mainland China, right? And the reason being that if you allow that, then Beijing can demand to have this or that person to be extradited for political reasons, right? Now, the U.S. and China, you do have a treaty, right, to use in China, you have a…
KT: No.
MC: You do have one.
KT: With Hong Kong.
MC: With Hong Kong? Not with…I am sorry, yes. You have one with Hong Kong, but not with the mainland.
KT: Because of the Hong Kong Policy Act and “One Country, Two Systems.”
MC: Exactly, right. And that came about 20 something years ago with Hong Kong, right?
KT: We had one predating the handover, but that agreement has remained in force, again because of the Hong Kong Policy Act allowing us to do that.
MC: So, are you worried that you have one with Hong Kong, and then if Hong Kong said “could you please extradite this person to Hong Kong,” is the U.S. worried that if Hong Kong has one now with mainland China, then that person upon arriving in Hong Kong, the Chinese government can say “we want that person over there,” does that worry you?
KT: Well, here is the thing. I am going to give you a careful answer on this.
I think the details in this kind of thing really matter. So I am not prejudging the likely outcome of Hong Kong’s deliberation about what to do with respect to fugitive transfer vis-a-vis the mainland, vis-a-vis Taiwan. And also I don’t want to prejudge what the U.S. reaction would be. Because it really depends upon the details and how these things are implemented, in terms of the carve-outs and protections for individuals, with respect to possible fugitive transfer or extradition.
So, we will just have to wait and see. There is a possibility that if it is structured in certain ways, then that could have some impact on the implementation of our bilateral arrangement between the U.S. and Hong Kong. But I don’t want to prejudge that.
MC: Sure.
KT: We are just going to wait and see what happens.
MC: Okay. We have just got a couple more minutes. The Greater Bay Area, some details have been announced. Yet again people say that this is going to even further worsen Hong Kong’s autonomy. Does that worry you?
KT: I don’t know. I honestly don’t know.
MC: Do you think it will?
KT: I honestly don’t know. I have carefully read the framework that was announced.
Let me put a more positive spin on it. I think the Greater Bay Area initiative does create some significant opportunities to reestablish momentum around the reform and opening process for the Chinese economy, using once again – as was the case 40 years ago and during the 40-year reform and opening period that we have heard so much about lately – to use South China as a place that shows the way to the rest of China, in terms of economic reform and opening.
So, a Greater Bay Area initiative that would most excite foreign businesses, as well as foreign governments, would be one that, in a sense, pushes the reform and opening process, and the kind of global best practices and rules-based systems that are prevalent in Hong Kong and Macau, into Guangdong. That would be great.
MC: Not the other way around?
KT: That would create enormous opportunities for foreign businesses, as well Hong Kong businesses, as well as mainland businesses. Everyone would be happy.
So, I really think that, again, the devil is in the details on this, and there were not that many details so far…
MC: Yeah, they are working on the details.
KT: … that they have announced. If, at the end of the day, it’s just some slogans and some bridges, then that’s kind of a neutral outcome. It doesn’t really help open up China, but it also doesn’t really pose a big problem for Hong Kong.
MC: Okay. I have got one minute left. The last time you were here, I asked you free speech is free speech, and you said you can use it even if you promote independence as long as it’s peacefully done. Do you still stand by that?
KT: Well, that’s our approach in the United States.
There has been a lot of discussion around flags and anthems of late, and in the United States, you can burn flags or misbehave during the national anthem – people don’t like it when you do it, it’s considered impolite, and not good but…
MC: So free speech is free speech, even for independence?
KT: … certainly, it’s legally protected free speech.
MC: But for Hong Kong, you think it should be allowed, you can speak about independence peacefully?
KT: Our interpretation of freedom of expression is that it’s a boundless thing, and people should be allowed to express themselves as long as they are not specifically hurting another person.
MC: Okay, I have got to end it right there. Thanks. See you next week. Good evening.
