ANNUAL REPORT

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dkrause on DSKHT7XVN1PROD with USCC 406 Developments among Hong Kong’s Political Groups in the Run-up to the 2016 LegCo Elections Fueled in large part by the fallout from the electoral reform debate and the Occupy movement, mounting feelings of frustration and disillusionment among prodemocracy advocates—particularly among young people—appear to be driving divisions in the prodemocracy camp between the traditional, older cohort favoring gradual reform through working with Beijing and the new, younger cohort favoring more comprehensive reforms and a more confrontational approach toward Beijing. Some of the student-led groups affiliated with the 2014 Occupy movement shifted their attention away from electoral reform to the September 2016 LegCo elections. In March 2016, Joshua Wong Chi-fung—one of the student leaders of the 2014 protests—established the political party Demosistō, which would run one candidate in the LegCo elections. Rather than focusing on electoral reform, Mr. Wong said the party would turn its attention to Hong Kong’s future after 2047, at which time the ‘‘one country, two systems’’ governance framework established during Hong Kong’s handover from the UK in 1997 will expire. 8 Mr. Wong said the party would advocate for a referendum for Hong Kong voters to decide whether to split from mainland China after 2047. 9 Oscar Lai Man-lok, one of the party’s leaders, said, ‘‘No one in the legislature right now has brought up the issue of Hong Kong’s future after 2047. We’re going to bring the same dogged resistance protesters showed in the Umbrella Movement into the legislature.’’ 10 The emergence of new ‘‘localist’’ political parties in the run-up to the LegCo elections also demonstrates this division.* Localists are a political minority predominantly composed of students who support self-determination (and in some cases, outright independence) and the preservation of Hong Kong’s culture. In February 2016, after protesting the apparent crackdown on unlicensed food vendors in Mong Kok District, over 700 localist activists clashed with police in a ten-hour standoff. Some observers called it the most violent mass demonstration since the 1967 riots triggered by pro-Beijing protesters against British colonial rule.† 11 The localist parties, many of which are led by former student participants in the 2014 Occupy protests, were previously viewed as fringe political actors * Like the chief executive elections, LegCo elections are not decided by universal suffrage. The Mainland’s legislature ruled that universal suffrage cannot be implemented in LegCo elections until it is implemented in the chief executive election. Standing Committee of the National People’s Congress, Decision of the Standing Committee of the National People’s Congress on Issues Relating to the Methods for Selecting the Chief Executive of the Hong Kong Special Administrative Region and for Forming the Legislative Council of the Hong Kong Special Administrative Region in the Year 2012 and on Issues Relating to Universal Suffrage (Adopted at the 31st Session of the Standing Committee of the Tenth National People’s Congress on December 29, 2007). † It is unclear what led to the unrest. According to some sources, reports that food and health inspectors were cracking down on unlicensed street food vendors led localist activists to organize protests in defense of the vendors. However, the Hong Kong government claimed inspectors were only conducting ‘‘general squad patrol’’ in the area when they were ‘‘surrounded, scolded, and pushed around’’ by over 50 people, leading the inspectors to call for police assistance. The clashes resulted in at least 100 injured—most of which were police, according to the Hong Kong government. According to the Hong Kong police commissioner, 54 were arrested in the immediate aftermath of the incident. Reports in the months following the incident indicate at least 75 people were arrested in total. Alan Wong, ‘‘China Labels Protesters ‘Radical Separatists,’ and They Agree,’’ New York Times, February 20, 2016; Legislative Council Panel on Security, Hawker Management and Policy, February 16, 2016; Asia Times (Hong Kong), ‘‘HK’s Mong Kok Protestors: ‘This is the First Time, But Won’t Be the Last,’’ February 11, 2016; and BBC, ‘‘Hong Kong Clashes as Police Clear Food Stalls,’’ February 9, 2016. VerDate Sep 11 2014 14:49 Nov 01, 2016 Jkt 020587 PO 00000 Frm 00051 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2016\FINAL\09_C3_M.XXX 09_C3_M
407 among mainstream political circles in Hong Kong, but increasing support among Hong Kong citizens—especially young people—for greater Hong Kong autonomy from mainland China has given these groups momentum. According to a July 2016 poll conducted by the Chinese University of Hong Kong—the first ever poll measuring support for Hong Kong independence—over 17 percent of Hong Kong citizens and nearly 40 percent between the ages of 15 and 24 support full independence after 2047. 12 Annual Vigil to Commemorate the Tiananmen Square Massacre On June 4, Hong Kong held its annual candlelight vigil to commemorate the victims of the 1989 Tiananmen Square Massacre and express support for political change in mainland China. 13 According to the vigil organizers, 125,000 people attended, but the turnout was 10,000 fewer than the 2015 event and the lowest attendance since 2009, which commemorated the 20th anniversary. 14 Although the event has long been one of the most popular and visible demonstrations of prodemocracy sentiment in Hong Kong, some young prodemocracy activists and nearly all university student unions decided not to attend the vigil, viewing the 2016 event as less relevant to the challenges Hong Kong currently faces under Beijing’s increasing encroachment. 15 Instead of attending the vigil, many of the groups hosted or attended other events across Hong Kong, including seminars discussing what the Tiananmen Square Massacre means in the context of today’s Hong Kong and its future. 16 dkrause on DSKHT7XVN1PROD with USCC The 2016 LegCo Elections The specter of Beijing’s control loomed over the September 2016 LegCo elections as well. Less than two months before the election, the Hong Kong Electoral Affairs Commission *—reportedly under pressure from Beijing 17 —announced a new requirement for all LegCo candidates: to sign a form agreeing Hong Kong is an ‘‘inalienable’’ part of China that ‘‘come[s] directly under the Central People’s Government.’’ 18 Those who refused to sign the form would face potential disqualification, and candidates who signed it but did not follow through with the pledge would face potential criminal charges, according to a spokesperson for the Electoral Affairs Commission. 19 In response to the announcement, most pan-democratic candidates refused to sign the pledge, viewing the requirement as political censorship and arguing it had no legal basis; some filed legal challenges to the new form. 20 However, civil servants tasked with reviewing the candidate application forms, which were fully supported by the Hong Kong government, 21 decided the action of signing or not signing the form had no bearing on whether a can- * The Electoral Affairs Commission describes itself as an ‘‘independent, impartial, and apolitical body’’ of the Hong Kong government, and is charged with overseeing elections. Electoral Affairs Commission, Government of the Hong Kong Special Administrative Region, Chairman’s Welcome Message. http://www.eac.gov.hk/en/about/chairman.htm. VerDate Sep 11 2014 14:49 Nov 01, 2016 Jkt 020587 PO 00000 Frm 00052 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2016\FINAL\09_C3_M.XXX 09_C3_M
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USCC 2016 ANNUAL REPORT
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1 2016 REPORT TO CONGRESS of the U.
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U.S.-CHINA ECONOMIC AND SECURITY RE
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• The safety of food, drug, and o
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CONTENTS Page TRANSMITTAL LETTER TO
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IX Page Recommendations ...........
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2 ernment’s “going out” strat
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4 economically and politically stra
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6 wage rates are determined by free
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8 while allowing a greater role for
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10 began construction on its first
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12 from—the People’s Republic o
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14 cluding cyber and human intellig
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16 exporter of manufactured goods,
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18 Pakistan’s economic and securi
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20 Beijing appears to remain skepti
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22 trends in Hong Kong with regard
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24 UNSCR 2270. However, in May and
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26 Korea, designating Dandong Hongx
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28 tional order—both before and a
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30 to examine China’s economic an
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32 debt, and jeopardizing long-term
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Introduction CHAPTER 1 U.S.-CHINA E
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37 Statistics with Chinese Characte
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39 up from 52.3 percent in the seco
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41 Early signs suggest President Xi
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43 Figure 4: China’s Total Debt b
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45 reserves to defend the RMB. 75 I
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47 The pace of U.S. export growth t
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49 The United States continued to r
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51 commitments, China has only take
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53 Table 3: Top Five Business Chall
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55 U.S. Tech Firms and Their Chines
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57 ment of Justice’s May 2014 ind
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59 Internet Censorship As a result
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61 on the future of U.S.-China rela
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63 Chapter 1, Section 2, “State-O
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65 Table 5: Failed Chinese Bids for
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67 • Accelerating Bilateral Inves
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69 cess capacity, which will share
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71 United States Challenges Chinese
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73 rulings of the DSB [Dispute Sett
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75 Conclusions • In 2015, the U.S
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77 Addendum I: WTO Cases Recent and
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79 ENDNOTES FOR SECTION 1 1. Lucy H
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81 55. Gabriel Wildau and Don Weinl
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83 119. American Chamber of Commerc
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85 and Espionage Operations, oral t
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87 217. Kane Wu, “Chinese Compani
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89 271. Office of the U.S. Trade Re
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93 Lardy, senior fellow at the Pete
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99 pany competitiveness and stimula
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105 Table 2: Select Chinese Overcap
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107 levels. 135 The situation is on
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109 Figure 5: China’s Monthly Cru
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111 Figure 6: U.S. Steel Industry Q
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123 Addendum I: Section 15 of China
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125 Addendum II: AD and CVD Investi
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141 dkrause on DSKHT7XVN1PROD with
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143 lifetime cost of bringing the e
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145 gets achieved). 57 Using satell
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147 cost of compliance,’’ and p
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151 boost the efficiency of China
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Table 1: 157 Chinese Attempted and
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Table 1: 159 Chinese Attempted and
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163 Figure 4: China’s Total Debt-
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173 weapons, opens the U.S. militar
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175 ests, and allow for greater vol
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177 Addendum I: Key Targets in Chin
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179 Addendum I: Key Targets in Chin
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195 The ultimate impact of the ruli
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197 Environmental Impact of China
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201 China’s Maritime Disputes in
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203 Reform and Reorganization of th
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207 • PLA Army Headquarters: Chin
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211 Figure 5: Type 072A Tank Landin
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215 Figure 7: JL-2 Missile Range Co
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221 Space-Tracking Facility in Arge
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223 Table 1: Significant PLA Bilate
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227 Nigeria will be the first expor
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231 tional annexes to the 2014 Noti
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233 Select U.S.-China Security-Rela
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257 China’s Core Interests—Cont
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259 guerrillas in Colombia and held
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271 stan. 109 In 2014, the PLA Air
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275 conflict Chinese expeditionary
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279 RECOMMENDATIONS Developments in
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SECTION 3: CHINESE INTELLIGENCE SER
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291 Strategic Support Force In Dece
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293 of advanced intelligence, surve
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295 tives, and sexual entrapment. 4
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297 information to a Chinese intell
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299 such as power transmission grid
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301 for transferring trade secrets
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303 nal U.S. discussions of issues
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305 ENDNOTES FOR SECTION 3 1. U.S.-
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307 29. U.S. Department of Justice,
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309 63. U.S. Department of Justice,
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311 106. Eric Holder, “Attorney G
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314 sure its own ambitions in South
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316 Chinese foreign direct investme
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318 • Pakistan: In 2015, China an
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320 India “Acts East” and Puts
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322 Counter Terrorism and Religious
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324 tivities of the Dalai Lama and
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326 incursions across the border fr
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328 conducive to sea lane protectio
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330 Karachi Port, that could eventu
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332 India and OBOR India has not en
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334 China’s Arms Sales to Pakista
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336 For China, the goals of CPEC ar
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338 according to Mr. Small, “The
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340 side the Treaty on the Non-Prol
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342 Facets of U.S.-India Defense Re
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344 of China, but has advocated for
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346 • Recent U.S.-China tensions
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348 24. Debasish Roy Chowdhury, “
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350 71. Jeff Smith, Cold Peace: Chi
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352 127. U.S.-China Economic and Se
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354 2016, 86; Andrew Small, The Chi
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456 Korea runs perpetual merchandis
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460 pressure is more likely to brin
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462 ty for sanctions violations, co
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479 sailors would be stationed in J
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485 Table 1: U.S. Goods Trade with
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489 basis for President Obama’s c
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APPENDIX II BACKGROUND OF COMMISSIO
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APPENDIX III PUBLIC HEARINGS OF THE
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537 June 9, 2016: Public Hearing on
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APPENDIX IIIA LIST OF WITNESSES TES
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541 Alphabetical Listing of Panelis
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APPENDIX IV LIST OF RESEARCH MATERI
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547 China’s Military Agreements w
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APPENDIX V ACRONYMS AND ABBREVIATIO
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551 OPM PBOC PLA PMI PPI PPP PRC QD
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553 2016 COMMISSION STAFF MICHAEL R
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ANNUAL REPORT

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