Xi Needs a Trade Deal as Much as Trump Does

As the world watches the standoff between the people of Hong Kong and the Chinese troops amassed on its border, it’s understandable to fear the worst is yet to come.

Chinese President Xi Jinping last month warned that any attempt to split Hong Kong from China — which agreed in 1997 to allow Hong Kong to keep its liberal system for 50 years — would end with "bodies smashed and bones ground to powder." The victory of pro-democracy forces in local elections last weekend has already prompted a stern warning from Beijing. The prospect of a Tiananmen-style confrontation in Hong Kong is real.

It is not, however, inevitable. That is the opinion of Emily Lau, the former chair of Hong Kong’s Democratic Party.

First, she told me in an interview last weekend at the Halifax International Security Forum, there is the 1997 agreement, which Chinese officials do not want to break. "They would look very bad to the world and even the Chinese people," she said. Second, there is Hong Kong’s status as a world financial center, which Chinese officials do not want to jeopardize.

China also has external disincentives to refrain from a military incursion.

One of them is President Donald Trump’s threat that such a move would derail trade negotiations.

Xi has "a million soldiers standing outside of Hong Kong that aren’t going in only because I asked him, 'Please don’t do that, you’ll be making a big mistake,'"Trump said last week with typical bluster. "It’s going to have a tremendous negative impact on the trade deal. And he wants to make a trade deal."

There is something to this. China’s economy has already been wounded by new tariffs and there could be capital flight if trade tensions with the U.S. are not resolved. Trade negotiations have created some leverage for the U.S. with China when it comes to Hong Kong.

But while Trump’s top priority with China may be a trade deal, Congress has other ideas. Last week both houses passed by a near-unanimous vote the Hong Kong Human Rights and Democracy Act, which would sanction and ban travel for any person responsible for human-rights abuses against citizens in Hong Kong.

These kinds of tailored sanctions have typically been imposed after a government commits an atrocity — such as the Saudi murder of columnist Jamal Khashoggi of The Washington Post. This bill is meant to send a message to the officers and soldiers garrisoned inside Hong Kong: If you engage in violence against demonstrators, you will be held accountable.

On balance, Lau said, she supports the legislation.

Although it would be difficult to "establish the facts in this process," she said, the prospect of sanctions could restrain many police officers or government officials with family or financial connections in America. "If you ban them from traveling and freeze their assets, they would be very scared," she said.

Regardless of whether Trump signs the bill, it’s almost certain that the sanctions will become law — Congress has the votes to override Trump’s veto. (If he does nothing, it becomes law next week.) And if he does veto it simply to preserve his negotiations with Xi, it would still be a mistake. When asked Tuesday about the Hong Kong protesters, Trump said, "We’re with them," then emphasized the need for an agreement with China.

Xi needs a trade deal as much as Trump does. The American president should seize this opportunity to show China and the world that even a divided Washington can show solidarity with Hong Kong.

Eli Lake is a Bloomberg View columnist. He was the senior national security correspondent for the Daily Beast and covered national security and intelligence for the Washington Times, the New York Sun, and UPI. To read more of his reports, Go Here Now.

© Copyright 2019 Bloomberg L.P. All Rights Reserved.