Welcome back, Axios China readers. Today we're taking a close look at Hong Kong's future, U.S.-China trade ties and Hong Kong students abroad.
⚡️Situational awareness: The House will vote this afternoon on the bipartisan Uyghur Human Rights Policy Act, which sanctions Chinese government officials complicit in China's mass detention of Muslim minorities.
Today's newsletter is 1,662 words, a 6-minute read.
Illustration: Sarah Grillo/Axios
As Beijing forces a sweeping national security law on Hong Kong, the once semi-autonomous city's status as one of Asia's largest financial hubs is at risk.
Why it matters: Political freedoms and a strong rule of law helped make Hong Kong a thriving center for international banking and finance. But China's leaders may be betting that top firms in Hong Kong will trade some political freedoms for the economic prosperity Beijing can offer.
What's happening: Last week, the National People's Congress, China's rubber-stamp legislature, unveiled a new security law that will criminalize sedition, foreign influence and secession in Hong Kong.
The new national security law is already creating uncertainty and could undermine other pillars of Hong Kong's status:
Uncertainty: The law will affect whether companies decide to expand their Hong Kong operations, to not open up a new office there at all, or even make plans to relocate to another Asian city.
Arbitration: International businesses prefer to conduct arbitration in Hong Kong rather than mainland China because the city has an independent legal system and a strong tradition of transparency.
Extradition: The U.S. signed an extradition treaty with Hong Kong — but not mainland China — in 1996.
If the U.S. curtails its extradition treaty with Hong Kong, the city could become a haven for financial criminals.
The big picture: In the medium term, Beijing's goal is to tamp down on political freedoms in Hong Kong while convincing international investors that Hong Kong remains viable as a financial center.
What to watch: The U.S. has long granted special status to Hong Kong, where more than 1,300 U.S. companies have operations.
But, but, but: It's possible Beijing's leaders may be counting on the reluctance of Western countries, especially the U.S., to take any immediate actions that will further damage U.S. trade — along with companies already suffering from an extended trade war and the effects of the coronavirus shutdowns.
Illustration: Sarah Grillo/Axios
As the coronavirus pandemic appears to be subsiding in China, it's becoming clear that China's targets for the phase one trade deal with the U.S. are unrealistic and there is so far no sign of a plan for renegotiation, writes Axios' Dion Rabouin.
What's happening: White House National Economic Council director Larry Kudlow said Thursday the trade deal was "intact, and China has every intent of implementing it."
Background: China agreed to buy $200 billion more in U.S. goods over the next two years than it bought in 2017.
Yes, but: While China has significantly stepped up its purchases of U.S. agriculture products so far this year, including corn, soybeans, wheat and cotton, it is far from the pace necessary to meet targets for purchases overall.
By the numbers: Given the lull in imports during the January to March period, China would need to buy an "impossible" $2.9 billion of energy per month from April to December, Jason Bordoff, a former senior director at the U.S. National Security Council, writes in Foreign Policy.
Americans overall have negative views of China's handling of the coronavirus epidemic, a feeling that is particularly prevalent among Republicans, according to a Pew Research survey released May 26.
Why it matters: The Trump campaign's strategy of being tough on China is likely to resonate well among voters.
A protester waves the Hong Kong colonial flag during a July 2019 demonstration against the extradition law to China. Photo: Ivan Abreu/SOPA Images/LightRocket via Getty Images
A student resolution expressing support for the Hong Kong pro-democracy movement was voted down at the University of Warwick in England, after opposition from mainland Chinese students.
Why it matters: The charged politics of China's actions in Hong Kong are spilling over to university campuses thousands of miles away, raising questions for students and university administrators about how to protect democratic values.
Details: On Feb. 3, the University of Warwick student union met to discuss a motion that would condemn the "abhorrent human rights abuses of the Hong Kong Police Force and the Hong Kong SAR Government."
University of Warwick students who self-identified as coming from mainland China argued against the resolution.
The resolution was then voted down.
The big picture: Chinese international student organizations in several countries have courted controversy for attempting to harass dissidents or shut down activities perceived as critical of the Chinese Communist Party.
Illustration: Sarah Grillo/Axios
A new sentiment is bubbling up in Washington: that the international system has been so toothless in the face of China's transgressions, and so warped by China's participation in it, that it's time for America to walk away from that system entirely, writes Axios' Dave Lawler.
What's happening: Blowing up multilateral agreements and institutions to thwart China has become central to American foreign policy.
Trump suspended funding to the World Health Organization in the midst of the worst pandemic in a century because the organization has refused to criticize China.
The big picture: The U.S. largely led the world into the current global system. Few countries appear prepared to follow America out of it.
The bottom line: The stage is set for a momentous debate: Is abandoning the existing global order the only way to halt America's decline, as Hawley argues — or would it only hasten it?
Taking the wheel: Norwegian Air's lessors take majority ownership (Reuters)
Eye on Paraguay: Taiwan's last stand in South America (Americas Quarterly)
American awakening: Young Chinese in the U.S. find political activism during COVID-19 (SupChina)
The Hong Kong news from last week and the dramatic downtown in U.S.-China relations has me thinking of a happier time: 2008, the year I moved to China, the year of the Beijing Olympics, and the year this delightful book about American Chinese food was published.
In "The Fortune Cookie Chronicles: Adventure in the World of Chinese Food," Jennifer 8. Lee (yes, her middle initial is the number 8) goes in search of the roots of American Chinese food and its role in American society.
Food for thought: "There are some 40,000 Chinese restaurants in the United States, more than the number of McDonald's, Burger Kings, and KFCs combined.
... Our benchmark for Americanness is apple pie. But ask yourself: How often do you eat apple pie? How often do you eat Chinese food?"