Hong Kong’s Crisis and the Turn Toward Extraterritorial Law

China’s new National Security Law, as well as its increasing reliance on law as a mode of repression, reflect important shifts in Chinese governance. Even if the National Security Law was perfectly legal in its passage, China’s use of extraterritorial jurisdiction may represent a tactical error that could have unintended consequences.

Editors’ note by Steven J. Davis and Luigi Zingales: On June 30, 2020, the Chinese government approved a new National Security Law for the Hong Kong Special Administrative Region. Ostensibly, the law aims to prevent any form of pro-independence activity not only in Hong Kong, but everywhere in the world. Article 38 of the new law reads as follows: “This Law shall apply to offences under this Law committed against the Hong Kong Special Administrative Region from outside the Region by a person who is not a permanent resident of the Region.” Besides issues of extraterritoriality, the law raises important questions about freedom of speech. Are criticisms of the People’s Republic of China and its government “endangering national security”? Do they represent a crime under the new law? Does this law apply also to criticisms raised in campuses in Europe or the United States? 

Freedom of expression is a core element of the history and culture of the University of Chicago from its foundation. Recently, these principles have been powerfully reiterated by President Robert Zimmer. For this reason, we have decided to open a debate in ProMarket on the impact of the new law on freedom of expression in Hong Kong and everywhere in the world. We start today with an opinion by University of Chicago Law School professor Tom Ginsburg. We invite academics and experts throughout the world to contribute to this important debate.   

For over a year, the world has watched as battles over Hong Kong’s future have shifted from the courts and the ballot box to the streets. Demonstrations, sometimes violent, have been met with both ineffectual concessions and repressive crackdowns. But this month, with the deployment of Beijing’s new National Security Law for the Hong Kong Special Administrative Region (SAR), the Chinese government has given itself powerful tools to shut down dissent. 

The result is what some have described as “the end of Hong Kong” as an autonomous entity, 23 years after the British handover, and 27 years before China’s promise to maintain a “One Country, Two Systems”—established by Deng Xiaoping during the negotiations with the UK over Hong Kong—was due to expire.

From one perspective, the fact that China had tolerated a liberal bastion within its borders for so long is a tribute to the basic confidence and security of the People’s Republic of China (PRC) government. Can we imagine the United States promising by treaty to respect the autonomy of a subnational authoritarian regime within its borders? Hardly. And yet for the last two decades, Hong Kongers have enjoyed what for Chinese has been unique access to freedoms of expression and association. This is so notwithstanding the Chinese view that the 1997 Sino-British Joint Declaration became void and had no ongoing legal effect after the handover occurred.

At the same, time, the rise of a younger generation of Hong Kongers who do not remember the handover and resent authoritarian interference had given new life to the push for more voice in public affairs—that is, more democracy. 

This had nothing to do with foreign interference, as sometimes claimed by Beijing, but is part of a global movement associated with generational change. The United States, too, has witnessed youth protests this spring, and young people have demanded more democracy in countries from Algeria to Zimbabwe. But in diagnosing the problem, the Chinese Communist Party (CCP) has emphasized foreign interference, and the draconian National Security Law reflects this.

The use of law as a mode of repression itself reflects important shifts in Chinese governance in recent years. As Taisu Zhang and I have argued, China has increasingly turned to law as a tool of governance in the Xi Jinping era. Xi’s own speeches are peppered with references to law and legality, and upholding the Chinese constitution has taken on new rhetorical importance, especially after the 2018 amendments that cemented Xi’s hold on power and ability to stay in office after his current term expires in 2023. This rhetorical shift has been matched by significant institutional investment in China’s courts and legal system, both of which improved in quality and capacity.  

The shift toward law as a tool of governance makes sense, especially in an era when ideological appeals may not be sufficient to resolve agency problems and maintain loyalty. It provides a mechanism for controlling line-level staff within the regime through complex systems of administrative law and an increasingly-legalized internal Party Disciplinary system. The 2018 amendment created a Supervisory Commission with the ability to examine the internal behavior of all state actors. Law is also, of course, a key tool for governing economic transactions, and a site of resolving conflicts in the ambitious Belt and Road Initiative, China’s major foreign policy initiative involving economic and cultural exchange from Europe to Indonesia. 

Law is also increasingly deployed for repression of dissent. The government can rule by law, without being constrained by the rule of law.

The National Security Law is a perfect example. Although Article 23 of the Hong Kong Basic Law required that national security legislation be passed by the Hong Kong SAR itself, the Basic Law is actually a statute of the PRC. When the National People’s Congress (NPC), China’s national legislature, chooses to do so, it can amend that law or pass legislation that conflicts with it. In the Chinese constitutional system, the Standing Committee of the NPC is also the final interpreter of the Constitution, so there is little forum to challenge the new law in terms of its constitutionality.

The primary goal of the new law is to facilitate the prosecution of a vague set of new crimes, including “undermining an election” in Hong Kong, and “provoking by unlawful means hatred among Hong Kong residents” toward the government (Art. 29). Its definition of terrorism includes conventional violent actions but also the catchall “other dangerous activities which seriously jeopardize public health, safety or security” (Art 24). Most directly, the law targets anyone guilty of working toward secession (Article 20), something China has increasingly been seeking to enshrine as a violation of international law. This led noted democracy activist Joshua Wong and others to disband their political party, which had been pushing for self-determination.

Even if the National Security Law was perfectly legal in its passage, it may represent a tactical error that could have unintended consequences. By reasserting control over Hong Kong, China has revealed a new legal strategy that promises to become more important globally: the use of extraterritorial jurisdiction. 

The United States was a pioneer in such applications of law outside its own borders with regard to antitrust, terrorism, and other activities. Europe purports to regulate certain economic activities that take place outside its borders as well. But China’s National Security Law combines extraterritorial jurisdiction with a vague set of violations that casts a wide net indeed for critics of Beijing’s policies. 

The key is Article 38, which extends jurisdiction over the designated crimes to those outside Hong Kong, of any nationality. It reads: “This Law shall apply to offences under this Law committed against the Hong Kong Special Administrative Region from outside the Region by a person who is not a permanent resident of the Region.” This means that anyone could potentially be arrested or indicted in Hong Kong if they violate these vague terms anywhere in the world. 

Furthermore, given China’s willingness to seek extradition of violators from foreign countries, the law will send a chill to Beijing’s critics everywhere.

The reaction to the new national security law has been strongest among Western democracies, which had urged China to think twice and modify some provisions. This was always a fool’s errand given the emotional centrality of Hong Kong to the CCP, and the fact that, at the end of the day, Hong Kong is unquestionably Chinese territory.  

Many Western analysts fail to understand the symbolic importance of Hong Kong in Chinese psychology due to long memories of its severance from China by Britain in 1842 after the First Opium War. The return of the territory in 1997 was seen by the CCP as the penultimate step in reunifying China’s national territory and erasing the legacy of a century of colonial humiliation. Only Taiwan (which at least traditionally was viewed as much more peripheral than Hong Kong itself) remained for the CCP to achieve its ultimate goal.  

Whether or not the controversy over the new law is truly the end of Hong Kong as we know it, the consequences are potentially larger if one views it as the opening salvo in Beijing’s deployment of extraterritorial law. It is not hard to imagine a whole series of such laws in the future. Imagine one requiring Huawei’s German subsidiary to report certain user communications to the government in Beijing; or criminalizing meetings with the Dalai Lama in any part of the world; or requiring PRC students in Western universities to report back on subversive comments from colleagues or professors; or voting for Taiwan’s Democratic Progressive Party, which once flirted with demanding Taiwan independence. China’s turn to law looks much darker if one imagines these scenarios.

Extraterritorial application of law invites conflict. The United States’ deployment of its own laws abroad has led to many fights with other countries, but at the end of the day is applied by independent judges, tempering potential abuses. If China chooses to use its law extraterritorially to enforce ideological conformity, it may find itself facing much bigger backlash than it expects.