China's Security Law Ushers in a New and Uncertain Era in Hong Kong

The passing of China's new Hong Kong national security law marks the start of an uncertain and potentially volatile phase in the city's ongoing political crisis, as pro-democracy forces square-off with newly empowered city authorities backed by Beijing, increasing the risk of a sweeping crackdown on dissent that could also impact foreign institutions. On June 30, Beijing's National People's Congress unanimously approved the legislation, which President Xi Jinping then signed into law before it was incorporated in Hong Kong's Basic Law. The long-expected move empowers the Hong Kong government to crack down on alleged secessionism, subversive activity, terrorism and foreign collusion in Hong Kong. As earlier leaks indicated, the law includes both aggressive penalties and strong tools for government enforcement:

The law defines secessionism as crimes broadly attempting to separate Hong Kong from China, giving latitude for interpretation. It imposes a maximum of life imprisonment for those playing a keystone role in these activities, with three to ten years imprisonment for participants.
The subversive activity definition encompasses attempts to overthrow China's government system or the Hong Kong government, with similar penalties to secessionism.
The terrorism definition also encompasses a wide range of activities including bombings and other serious acts of violence, as well as disruption of public transport, interference with public utilities and the endangerment of public health. The maximum sentence for terrorism charges is life imprisonment, while the maximum penalty for promoting acts of terrorism is a ten-year prison sentence.
Foreign collusion encompasses disseminating state secrets, as well as appealing to foreign powers to interfere with Hong Kong policymaking, manipulating election results, or imposing sanctions on China or Hong Kong.
The law will also allow for jurisdiction to be transferred to mainland courts in select situations, including when the Hong Kong government is unable to effectively enforce the law or in instances of complex foreign interference.
The law includes provisions that appear to allow for foreign institutions, individuals and media operating in Hong Kong to be prosecuted even if conducted outside of Hong Kong.

Hong Kong's pro-democracy camp will work to balance the need to maintain public furor against Beijing's ongoing erosion of the city's autonomy with the need to also save its strength for September legislative council elections, where it hopes to gain ground and challenge Beijing-aligned authorities. Whether the next period sees tumultuous protests or a stifling of the pro-democracy camp will now depend on how Hong Kong authorities choose to apply their new sweeping powers and how the prosecution of such crimes proceed in the court system. On the extreme end, the government may opt for a sweeping crackdown and mass arrests of protesters, as well as the banning of legislative council candidates to hamstring the opposition. This would, however, come with the risk of fueling public backlash against pro-Beijing lawmakers that could undermine their chances in September and fuel long-term unrest — particularly if more moderate pro-democracy forces are left standing.

The law has already had somewhat of a chilling effect on political activity in Hong Kong. The city's pro-democracy Demosisto party has disbanded, with its members saying they would participate in future movements in a personal capacity, although it held no legislative council seats. The tiny pro-independence Hong Kong National Front also said it would break up and move its work to Taiwan and the United Kingdom.
Protesters have signaled resolve to continue to some degree their confrontation with the Hong Kong government, even if with less controversial methods. Demonstrators gathered at lunchtime June 30 following the bill's passage for a small protest in the Landmark shopping mall in Central, with police sealing off parts of the mall and conducting searches.
The Civil Human Rights Front protest group called for a July 1 peaceful march from Causeway Bay to Central. Other online calls emerged for protesters to gather in Victoria Park on July 1 to "celebrate" the passage of the law.

Whether the next period of Hong Kong's political crisis sees tumultuous protests or a stifling of dissent will depend on how city authorities apply their sweeping new powers under China's national security law — and the opposition's response.

In the United States, domestic political pressure will prompt the administration of U.S. President Donald Trump to issue a response to China's moves in Hong Kong. But the scope to which the White House will further escalate or punish Beijing over its security law will be limited by the Trump administration's desire to also maintain its "phase one" trade deal with China ahead of the November presidential election.

Prior to the passing of the legislation, the U.S. Department of State announced June 29 it was ending defense exports to Hong Kong and imposing restrictions equivalent to China's on exports of dual-use defense goods, citing risks of re-export and use by the Chinese military.
On June 26, Washington also moved to ban visas for Chinese and Hong Kong officials involved in eroding the city's autonomy, which China then reciprocated by saying ti would target U.S. officials who "behave egregiously" regarding Hong Kong affairs.
On May 29, U.S. President Donald Trump laid out a menu of options for U.S. policy shifts to reflect Washington's decision to decertify Hong Kong's autonomous status from mainland China, including rescinding the city's special tariff status.