Asia is witnessing a clash of two different dreams. President Xi Jinping’s ‘China Dream’ seeks to avenge the ‘Century of Humiliation’ heaped upon it by once-ascendant western powers, restore his country’s pre-eminence in Asia and make it a power to reckon with by 2049 when the Communist Party of China completes its centenary in power. President Donald Trump has envisioned similar things: Make America Great Again is about rebooting the U.S. economy and resetting the nation’s priorities. The row over Sino-U.S. trade imbalance, which many say is the start of a new Cold War, has its seeds in the ‘dreams’ of the leaders of China and America.

The U.S is worried about the Middle Kingdom’s rise and it “salami slicing” control over the South China Sea, which would push America’s allies closer into China’s arms. If the trade war and curbs on Huawei were a means to bring China to heel, then the unrest in Hong Kong has given it a casus belli.

Despite intractable differences on many issues, key Republicans and Democrats agree on the need to act against China. While a Republican President is upping the ante against the Chinese over the trade deficit, Democrats have adopted a hawkish posture on human rights. Democratic contenders for the 2020 presidential election Amy Klobuchar, John Delaney, Julian Castro and Tim Ryan have singled out China as the biggest geopolitical threat to the United States. Besides, Nancy Pelosi, who unfurled a memorial banner in Tiananmen Square in 1991 and is now the Speaker of the House of Representatives, is a passionate advocate of human rights in China. Pelosi has backed pro-democracy activists in Hong Kong much to the chagrin of the Communist regime.

The American flag has been a feature of several of the rallies that have taken place in Hong Kong over the last four months The American flag has been a feature of several of the rallies that have taken place in Hong Kong over the last four months Photo: AFP / Anthony WALLACE

And for that reason, Beijing sees the U.S. House of Representatives clearing the Hong Kong Human Rights and Democracy Act, which backs the city-state’s anti-government protesters, as an “interference in China’s internal affairs."

If it becomes law (the Senate needs to approve the bill now), then American lawmakers will have a say in the continuation of the island's special trade status with the U.S., and can penalize its administrators. The law mandates the Department of State to report annually to Congress on whether Hong Kong is sufficiently autonomous from China to justify its unique treatment. The report shall examine whether China has eroded Hong Kong's civil liberties and rule of law as protected by Hong Kong's Basic Law.

The Department of Commerce will be tasked with probing alleged instances of China using Hong Kong to evade U.S. export controls and sanctions. The Congress will be apprised by the President of individuals responsible for kidnapping and torturing people for exercising human rights in Hong Kong. Such individuals will be banned from entering the United States under the law.

In the run-up to its handover to the People’s Republic, Paramount Leader Deng Xiaoping envisioned the ‘One Country, Two Systems’ formula for Hong Kong. Under this setup, Hong Kong would have an executive, legislature, and its judiciary would enjoy a “high degree of autonomy." While China is responsible for defense and foreign affairs, Hong Kong runs its own internal security; the mainland government can’t interfere in Hong Kong’s affairs.

Deng had an eye on Taiwan’s (which China considers a renegade province) integration when he conceptualized this unique arrangement. It was felt that Hong Kong flourishing as a successful “capitalist enclave” under the control of a Communist state would entice Taiwan’s fence sitters.

Economic pragmatism lay at the crux of this arrangement. In 1997, when the United Kingdom returned Hong Kong’s control back to China, the island was coveted for its managerial expertize and access to international markets. China itself was taking off after years of Maoist mismanagement that had made it the “sick man of Asia”, and just beginning to reap the benefits of Deng’s policies of ‘reform and opening’ that saw the nation transform into a “socialist market economy”.

Hong Kong’s economy, then, was one-fifth of China’s, and Deng saw the prudence in retaining features of a democracy like free speech and civil liberties, because he was reassured that “the Communist Party could not be toppled by words." Today, Xi has cast himself in the mould of Mao, dismantling the political setup of ‘collective leadership’ put in place by Deng. Having disassembled Communism, his Communist Party today seeks to conflate its existence with nationhood itself.

A nation exists because it has a fixed and defined territory, its future remains tied to its resolve to defend that territory. China fears that Hong Kong’s system has allowed “localist” politicians who advocate self-determination to be voted into power, and encouraged separatist tendencies. If left unchecked, such secessionist inclinations may fan unrest in other regions that present challenges to China’s nation-building.

The diminution of Hong Kong’s economy (today it is a mere 3 percent of China’s) may tempt party mandarins in Beijing to read the riot act to the islanders. Xi has already fired a warning shot during his state visit to Nepal on Oct. 13, warning that any bid to split China would leave “crushed bodies and shattered bones” in its wake. Additionally, the ‘black hands’ narrative promoted by China pushes the blame for the unrest on dark forces abroad that want to shatter the nation.

Seen against this backdrop, the Hong Kong Human Rights and Democracy law could become a new flashpoint in Sino-U.S. relations. China's parliament, the National People’s Congress, has accused the House of Representatives of turning a blind eye to “radical forces that indulge in criminal acts with characteristics of terrorism." The Hong Kong and Macau Affairs Office, a body that coordinates between the mainland and administrative regions, has condemned the House for its “gross interference” in China’s internal affairs and for using the “Hong Kong card” to destabilize China.

If the Hong Kong law makes its way to U.S. statute books, China may be forced to crank up its economic statecraft. China may retaliate with sanctions against institutions and U.S. officials, curbs on travel to Hong Kong by U.S. lawmakers who supported the bill, and reprisals against their business interests in China. To sum up, U.S. lawmakers will be forced to make a choice: stand up for their conscience call and red-flag human rights violations, or shield their financial interests. All this while the world is watching.

(Kalpit Mankikar is a journalist who is currently pursuing his China studies at the London School of Economics and Political Science.)