China Claps Back: New National Security Bill A "Death Knell" For "US Influence" In Hong Kong

Update (1045ET): As Trump's top diplomat, Pompeo has become the object of intense anger by the CCP and the Chinese press. A quick look through Global Times editor Hu Xijin's twitter feed reveals many "clap backs" - rebuttals to hawkish comments about China made by the secretary of state.

Friday was no different, as Hu, an English-language mouthpiece for the CCP, tweeted that the new security bill targeting Hong Kong isn't a "death knell" for the city state's autonomy, but rather a "death knell" for "US influence" in the territory.

Aping Trump's playbook, Hu also branded Pompeo with a new nickname: 'Lying Pompeo'...

...We feel obligated to note that nicknames don't really carry the same bite when applied to the surname, instead of somebody's first name. For example, they should have went with "Lying Mike" Pompeo.

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Secretary of State Mike Pompeo has issued a statement responding to China's new "National Security" law effectively criminalizing all forms of political dissent in the territory. In it, he unequivocally insisted the US would "stand with Hong Kong" and oppose Beijing's decision to "unilaterally and arbitrarily" crack down on Hong Kong's freedoms, which were supposedly enshrined in the "one country, two systems" deal with the British back in the 1980s.

Beijing has capitalized on a loophole in HK's "Basic Law" requiring the city state to have some kind of National Security law. But the sensitive political climate has kept an official law off the books for decades. Now, it's being extraneously imposed by Beijing.

As Hong Kongers prepare to take to the streets in protest, Pompeo hinted that the law - which would be a "death knell" for political freedoms and autonomy for Hong Kong - would result in the US stripping the city-state of its special economic status, which was contingent on China keeping its hands off Hong Kong.

  • POMPEO SAYS U.S. STANDS WITH PEOPLE OF HONG KONG, STRONGLY URGES BEIJING TO RECONSIDER ITS 'DISASTROUS PROPOSAL' -STATEMENT
  • U.S. SECRETARY OF STATE POMPEO SAYS CHINA'S DECISION TO BYPASS HONG KONG'S LEGISLATIVE PROCESSES AND IGNORE WILL OF THE PEOPLE 'WOULD BE A DEATH KNELL' FOR AUTONOMY PROMISED UNDER AGREEMENT -STATEMENT
  • U.S. STRONGLY URGES BEIJING TO RECONSIDER `DISASTROUS PROPOSAL'

A State Department spokeswoman exhorted China to "honor" its commitments under the Sino-British agreement that led to Hong Kong return to Beijing.

"We urge Beijing to honour its commitments and obligations in the Sino-British Joint Declaration," said State Department spokeswoman Morgan Ortagus in a statement, referring to the bilateral treaty signed in 1984 that guarantees a "high degree of autonomy"

Hong Kong's government said Friday it would "fully cooperate" with the Standing Committee and the NPC as the law is implemented, and urged Hong Kongers to view the law "positively".

Of course, Hong Kong Chief Executive Carrie Lam, better known to demonstrators as "piglet" due to her obsequiousness to Beijing, is deeply unpopular and has reportedly said she would resign her post if Beijing would allow it.

  • H.K.’S LAM SAYS CITIZENS SHOULD VIEW SECURITY LAW 'POSITIVELY'
  • LAM: SECURITY LAW CAN BOLSTER BUSINESS CONFIDENCE IN HONG KONG
  • LAM SAYS HONG KONG FINANCIAL SYSTEM REMAINS ROBUST
  • CARRIE LAM: HONG KONG WILL REMAIN A FREE SOCIETY
  • LAM: H.K. GOVT WILL RELAY CONCERNS ON SECURITY LAW TO BEIJING

As we've explained for President Xi, it's just the start of a his promise to reassert dominance over Chinese territories like Taiwan and Hong Kong, where anti-government protests flared during the second half of 2019. Rising unemployment and a crumbling economy will likely make matters worse as an increasingly frustrated public blames Beijing for their strife.

"Xi feels threatened, the leadership feels threatened -- this is a crisis,” David Zweig, an emeritus professor at the Hong Kong University of Science and Technology and director of Transnational China Consulting, told BBG. "This is, ‘We’re not going to give an inch, we’re going to tighten up, and Hong Kong’s national security as a potential subversive center is greater than its economic value.’”

In the meantime, officials responsible for overseeing Beijing's relationship with Hong Kong insisted that the law would impact "very few people", and the Chinese press rolled out a full-on offensive playing down the significance of the law.

With all the economic and political drama, Kyle Bass's decision to bet on the HKD peg to the dollar finally breaking is looking increasingly prescient, as the currency comes under increasing pressure.