If the Chinese Communist Party gets away with its ways in Hong Kong, it is only a matter of time before freedoms and way of life that free societies across the world now enjoy disappear one by one – as it happened in Eastern Europe after the World War II.

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As Britain was getting ready to hand over Hong Kong to China, paramount leader Deng Xiaoping set the minds of residents in the colony at rest with a famous sentence that went “Horse racing will continue, and the dancing  parties will go on” even after 1997.

The Chinese communist party leader was making clear that Hong Kong would continue to be the capitalist society with common law rule for another 50 years at least after the hand over.

We haven’t reached even the half way mark of that period,  but the promises made to the Hong Kong people lie in tatters already. The racing were indeed cancelled for a day in October over a political controversy linked to a pro-Beijing lawmaker while the only dance that we see in Hong Kong now is a tango between police and pro-democracy protesters, which is getting violent day by day.

When Hong Kong was handed over to Beijing, it was wealthy, well-functioning society where rule of law reigned, courts dispensed justice without fear or favour, a bureaucracy that kept the government machinery purring smoothly and an economy which was minting millionaires with regularity.

All that the central government and the Chinese Communist Party (CCP) had to do was let the city continue as it is and take care of its defence and foreign affairs while integrating the former British colony into China under the One Country, Two Systems principle. It was supposed to be a showcase of Beijing’s pragmatic approach that was to woo Taiwan into its fold, pointing to how well they have managed Hong Kong by allowing local population run things while accepting sovereignty of China.

But in just two decades, the CCP has shown that it has failed miserably in this objective with huge sections, if not the majority, of Hongkongers rebelling against Beijing’s attempt to choke the city directly and through its puppets who were chosen to govern the territory since the handover.

In the early days of opening its doors for trade under “capitalism with Chinese characteristics”, Beijing tapped into Hong Kong people’s expertise and a huge amount of foreign investment flowed into the country through this financial centre. To be fair, many Hong Kong residents also benefited as China zoomed ahead economically becoming the world’s factory.

But as it coffers got filled as trade with other countries boomed, making the nation the second biggest economy, those in charge of the CCP also started seeing the Sino-British accord on Hong Kong’s future differently. With London diminishing in importance and the West depending on China for their economic growth, this attitude has paved way to an arrogance that the Communist Party now demands that foreign countries and companies bow to their wishes inside and outside China.

In the late 1970s when Deng Xiaopeng signalled opening up of the economy by unveiling his socialism with Chinese characteristics, developed countries led by the United States and Japan rushed to embrace them by arguing economic growth will lead to reformation in the social and political spheres in the country. But the first jolt came when the Communist Party leaders under Deng ordered army tanks into Tiananmen Square to crush a protest led by students who had called for political changes.

The West and its allies reacted with condemnation and sanctions that lasted for a couple of years. But the huge carrot of economic benefits that was dangling in front of them was enough to forget all that and soon they re-engaged China with renewed vigour.

In the next decade, the world witnessed an economic miracle with China growing at a rate of around 10 percent annually and globalisation became the catchword of capitalists and multinationals. Companies from the US and Europe rushed to establish factories in China as they found cheap production costs could multiply their profits many fold. The stringent labour and welfare rules back home that cut into their profits was absent in China where even labour unions  – where it was allowed – toed the line of the authorities.

With the development of world class infrastructure and the officials learning how to deal with the multinationals, China became a dreamland for the companies whose only bottomline was profit. The market efficiency theory was a powerful enough argument for them to ignore the perils it was putting the workers back home as many factories and production facilities could not compete with goods made in China.

The changes that West and capitalists had hoped for also happened in China. The economic boom saw hundreds of millions lifted out of poverty, millionaires and billionaires mushroomed, and China itself became a major consumer of goods and services, expanding the world market significantly. Chinese companies themselves became global players, especially in sectors like transport, steel, telecoms and infrastructure.

Ignoring the murmurs of discontent about the lack of a level playing field in the domestic Chinese market where state-owned companies were protected, the country was fully integrated into the world economy in 2001 when it was welcomed into World Trade Organisation (WTO) as a full member. Severe conditions were imposed like lifting tariffs, opening up sectors like agriculture and liberalise rules.

But almost two decades later, Washington now argues Beijing has failed to meet these commitments and imposed trade tariffs on Chinese goods.

In the meantime, China has grown to become the biggest trading nation in the world and countries from the Pacific to Europe depend on Chinese import and export to keep their economies afloat. This booming trade became the engine for growth, jobs and economic stability over the last few decades.

As the time went by, Beijing started using this leverage politically. Norway learned this painful lesson when human rights activist Liu Xiaobo was awarded the Nobel Prize for Peace in 2010. The economic blockade that Beijing imposed on Oslo was effective. Four years later, the prime minister of the country was careful enough to avoid Dalai Lama when he visited Norway.

With Xi Jinping assuming power and amending the rules for him to continue to be the president beyond the two-term limit, the communist party seems to be adopting a more aggressive stance. Beijing has laid claim to the entire sea lanes that is around China and has pushed ahead with the claim despite protests and objections from almost every major country in the region.

Countries like the US, Canada, Australia and New Zealand – where Chinese students go in large numbers for education – find the universities coming under pressure if they are deemed to be critical of the Communist Party or its leaders. Even more alarming, through Confucius Institutes set up in campuses and their general donations, Beijing is apparently trying to control the academic curriculum to make sure students don’t know about critical views about the Communist Party.

In Australia, even political leaders were found to have been roped in, with generous contributions from Communist Party-linked bodies, to speak up for China and more worryingly, to oppose and silence any criticism of Beijing government. 

Multi national companies whose fortunes depend on China for production and consumption have learnt that any step they take which is seen detrimental to Chinese party leaders will bring swift retribution, leading to huge losses. If they are not willing to play by the Communist party rules, firms are unable to do business there, as Google discovered in 2010 and shifted its base from the mainland China to Hong Kong.

If they wanted to be based on the mainland, they had to comply with Communist Party’s censorship orders. Fortunately Google decided against complying with it. But many other multinational firms whose revenue streams depend on China, meekly comply such orders.

Firms were targeted even for what happened in their country as South Korean company Lotto found as Seoul allowed US missiles placed in the country. Attack on its chain of stores by nationalistic groups sanctioned by the Communist Party finally drove them out of China.

It is the same predicament that NBA found itself in when the US basketball league toured Asia to drum up support among its fans in Asia, majority of whom who are in China. The firestorm started after the manager of Houston Rockets team, Daryl Morey, sent out a tweet which said “Fight for Freedom. Stand with Hong Kong”  in October. The fact that  Twitter is banned in China and overwhelming majority of its citizens would not have seen the tweet was irrelevant to them.

But still the Chinese authorities reacted with fury, cancelling scheduled events involving NBA teams, official media dropping live telecasts of the pre-season games and demanding that NBA and Houston Rockets sack Morey. Private companies like Tencent which livestreams the games joined the criticism while Nike – an American company – rushed to pull Rocket merchandise off the shelfs in China.

The financial loss for the league and Rockets ran into millions of dollars and saw the whole controversy sharply dividing the opinions in the US, with basketball superstar LeBron James saying Morey had overstepped the line while Vice-President Mike Pence lashed out at NBA and Nike for sacrificing American values for money.

What these mentioned events show – starting from the Tiananmen Square crackdown in 1989 till NBA row in 2019 –   is a pattern of behaviour by Chinese Communist Party leadership which brooks no criticism of its ways. In the this three decades mentioned here, not only has it continued, but it has grown stronger.

Now, with globalisation and trade opening doors for them in far away countries, the Chinese Communist Party wants societies far beyond the country’s borders to play by its rules.

Arguments that economic development in the country will bring in social reforms and more freedom to its people has now faded. The hope that integration into WTO will make the country change its ways in the business sector has hardly happened as chambers of commerce of both the US and EU continue to complain about a lack of level playing field for foreign firms who want to operate in China.

The agreement China signed with Britain about the Hong Kong handover is being ignored and interpreted differently as it suits Beijing. The Communist Party officials berate London for interfering in China’s domestic affairs when they raise the issue, even though its is a Sino-British pact.

This is where Hong Kong becomes a test case for China and the rest of the world. This was an agreement that Beijing signed on – to keep the Special Administrative Region as it was and run by the locals with mainland officials looking after foreign affairs and defence.

But 22 years later, the city is in a crisis as the people handpicked by Beijing to govern and vested interest groups that the Communist Party relied on for support have undermined the One Country, Two System principle. The local government is now seen as a mere puppet dancing to the tune of the Communist Party and freedoms that people vanishing one by one.

What happens in Hong Kong unfortunately does not stay in Hong Kong as companies from all over the globe operate here. All of them will come under the same restrictions and statutes that infringe on the Rule of Law principle  – the very  reason why these firms chose to be in Hong Kong and not on the mainland China. 

If the party gets away with its ways in Hong Kong, it is only a matter of time before companies, universities and even political parties in other countries start getting similar demands. The financially beefed up Communist Party will be more confident in using their carrot and stick policy to bring everyone in line.

During the Cold War, what unravelled the Soviet Union was its economy as the West had squeezed it out of the global trade. But the Chinese Communist Party has avoided that pitfall by transforming the country into a trade superpower.

But the country has not lived up to its promises that the international community was given when they welcomed into the international trade. Nor has the Communist Party eased its hold on almost every aspect of life in the country.

If other countries do not hold Chinese Communist Party accountable and insist Beijing live up to the agreements it signed on and play by the global rules, what we may end up with will be a Soviet Union-like regime which also controls the global economy. That will see freedoms and way of life that free societies have come to develop and enjoy disappearing one by one as it happened in Eastern Europe then.

This is why Hong Kong must become a litmus test for the Chinese Communist Party. It should be asked to prove its ability to live up to its words and play by the globally accepted rules. If Beijing ignores the rest of the world, leaders elsewhere should start thinking of isolating the country again and start thinking of administering the ultimate bitter medicine  – economic sanctions.