As of July 1, the rulers of China have, in essence, abrogated a treaty reached with the United Kingdom regarding the turnover of Hong Kong that supposedly resulted in “One country, two systems.”

That treaty was to run for 50 years from the turnover in 1997; it continued the rule of law in Hong Kong†but allowed China to pick the head of the Hong Kong government.

President Xi Jinping, since he assumed power in the 1990s, has increased repression of dissent in mainland China and aspired to squash it in Hong Kong as well.

Xi’s increasingly intolerant attitude stirred up concern on the part of Hong Kong residents as to whether such repression of dissent would be extended to the territory.

In 2019, the territory’s government proposed a law that many interpreted as being particularly harsh and severely limiting on any protests.

This, in turn, touched off a series of increasingly vocal and larger protests that eventually resulted in the Hong Kong government withdrawing the proposed legislation. The protesters, however, increasingly agitated for some form of independence from China.

The powers in Beijing were not amused and became concerned that the level of dissent in Hong Kong was dangerous because it might spread to mainland China and thus challenge the Communist’s party rule.

So the rubber stamp parliament of the Peoples’ Republic passed a law drafted in secret that de facto imposed the same rule of fear and oppression enjoyed on the mainland.

In essence it affirmed the Chinese government’s attitude that its interests are best served by iron-fisted repression at home and bullying abroad.

For more than four decades, both the United States and Europe ignored endless provocations and evasions of treaty requirements by China in hope that, as it grew richer, China would become more co-operative in tackling world issues such as climate change, nuclear proliferation and regulation of global public goods such as air space, radio frequencies and international shipping.

But now, Xi, like Donald Trump, appears not to be concerned that his country is increasingly viewed by other nations as not keeping its word and doesn’t worry about its image abroad.

Since July 1, a new reality is setting in as many countries begin to understand that China has its own agenda and looks to lead or dominate international organizations such as the UN, the Arctic Council, etc.

While most nations have voiced concern regarding the new law imposed on Hong Kong, few have taken significant steps.

What is at work here is the economic muscle of China.

Canada has seen this up close. When we detained the Chief Financial Officer of Huawei a Chinese telecommunications firm at the request of the Americans, China not only imprisoned two Canadians on trumped-up charges, but also barred Canadian agricultural imports.

Two important questions now arise. First, over 300,000 Canadians live in Hong Kong. That provides China with a large bargaining chip in any future confrontations with Canada. While Canada cannot compel its citizens to leave the city it can certainly urge them to do so and discourage Canadians from travelling to Hong Kong or mainland China. In addition it should openly recruit other residents in the city to migrate to Canada.

Second, China has publicly stated that it wants to keep Hong Kong as economic powerhouse but this will be difficult.

China is not just a repressive regime; it also has a corrupt administration that applies its laws in a capricious manner to ensure that its objectives — such as access to foreign markets or foreign technology — are obtained at minimum cost.

Canadians need to be constantly reminded of these risks in doing business in China.

Canada needs to rethink its policy towards China, discouraging Canadians from travelling there and limiting, if not outright forbidding, further Chinese investment in Canada.

We also need an aggressive effort to limit agricultural exports to China by finding alternative markets, and by consistently pointing out abuses of treaties and promises.

It will not be easy, but it is important to reduce our vulnerability to a China determined to influence our policy actions. That does not mean ignoring China, but rather being pragmatic in our dealings with this authoritarian regime.

David Bond is a retired bank economist who lives in Kelowna.