How Will Geopolitical Tensions Affect Cathay Pacific?

On June 30th, a new law came into effect in Hong Kong. This new law has six chapters that contain 66 articles and will ban secession, subversion, terrorism, and collusion with a foreign country or external elements believed to endanger national security. This has caused a great deal of civil unrest in Hong Kong and sparked tensions with countries like the United States, the United Kingdom, Australia, Canada, and New Zealand. So will this law and the geopolitical tensions it has caused have an effect on Cathay Pacific? The airline itself seems to think so.

cathay at hong kong airport
Could foreign transit passengers flying with Cathay Pacific be subject to the new Chinese law? Photo: Getty Images

As part of Cathay Pacific’s report on July’s passenger and cargo traffic, the airline included the following statement with regards to short-term outlook:

“In addition to the COVID-19 pandemic, we have to contend with a looming global recession and geopolitical tensions, which are expected to have a negative impact on both air travel and cargo demand. It is obvious that there will be no return to normal demand conditions any time soon.”

So let’s try to understand this new law, how it has had an impact on geopolitics, and how Cathay Pacific might be impacted.

Note: We feel that the background of the law and international disapproval is key to understanding the airline’s position. Thus the first two sections will cover this. The bottom portion of this article will directly address Cathay Pacific and Hong Kong travel.

Cathay Pacific faces the headwinds of COVID-19, previous civil unrest, economic difficulties, and rising geopolitical tensions. Photo: Cathay Pacific News Room

The new law

The law came into effect on June 30th, and according to the BBC, is meant to be China’s way of “stepping in to ensure the city has a legal framework to deal with what it sees as serious challenges to its authority.”

In short, the law has 66 articles which criminalize the following acts:

  • Secession – breaking away from the country
  • Subversion – undermining the power or authority of the central government
  • Terrorism – using violence or intimidation against people
  • Collusion with foreign or external forces
carrie lam hong kong
Hong Kong’s Government has lost much of its autonomy in recent months. Photo: Getty Images

Why this is concerning and who is taking a stand

The new law – or set of laws – has some serious consequences attached. In fact, the maximum penalty for each crime is life imprisonment. However, the suggested sentence for some minor offenses is less than three years’ jail. Depending on the offense, this may still seem wildly disproportionate.

“Effectively, they are imposing the People’s Republic of China’s criminal system onto the Hong Kong common law system, leaving them with complete discretion to decide who should fall into which system,” -Professor Johannes Chan, a legal scholar at the University of Hong Kong via BBC

Some critics are worried that the law and its offenses will have broad and vague interpretations, allowing the Chinese government to justify the arrest of anyone it sees as vocal opposition to its form of governance.

Former Chinese resident and critic of the Chinese government, Winston Sterzel, provides the example that if an individual targeted by the government simply had a friend in a foreign police force, that they could be accused of, and jailed for ‘collusion with a foreign force.’ Even if no real crime was committed.

“They want to silence, intimidate, and stop any criticism of the Chinese Communist Party,” Sterzel says.

Dominic Raab
Foreign Secretary Dominic Raab issued a joint statement with other foreign ministers regarding Hong Kong and the erosion of rights. Photo: Getty Images

Western democratic nations have raised concerns. In fact, the Foreign Ministers of Australia, Canada, New Zealand, and the United Kingdom, and the United States Secretary of State issued a joint statement just last week regarding the issue. Part of the statement reads:

“These moves have undermined the democratic process that has been fundamental to Hong Kong’s stability and prosperity…We express deep concern at Beijing’s imposition of the new National Security Law, which is eroding the Hong Kong people’s fundamental rights and liberties.”

Indeed, with China’s generally unfavorable reactions to criticisms, this statement will only serve to raise geopolitical tensions.

Last week, the United States took this a step further, announcing Treasury sanctions on key political figures in Hong Kong, associated with their recent actions. “All property and interests in property of the individuals named…that are in the United States or in the possession or control of US persons, are blocked and must be reported to [the Office of Foreign Assets Control].

Hong-Kong Airport Cathay Dragon
Cathay Pacific’s July 2020 load factor was a mere 24.3%. Photo: Getty Images

How this affects Cathay Pacific and Hong Kong travel

As you can see from the international response above, the geopolitical tensions mentioned by Cathay Pacific are very real. In addition to COVID-19 travel advisories, governments are warning their citizens against travel to Hong Kong due to the new laws. Here are examples of travel advisories by the US and UK:

United States:…citizens traveling or residing in Hong Kong may be subject to increased levels of surveillance, as well as arbitrary enforcement of laws and detention for purposes other than maintaining law and order.”

United Kingdom:…certain behaviors may now be deemed illegal and attract greater scrutiny from the authorities.”

HK Express
This new security law will definitely affect foreign travelers to Hong Kong. Photo: Getty Images

Of key concern for travelers is Article 38 of this new law, which states that it will apply to offenses 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 provision, in combination with escalating tensions between western nations and Hong Kong (and the Chinese government), will likely serve to discourage travel to Hong Kong.

One big question mark is if this will be enforced upon passengers merely transiting through Hong Kong International Airport. For example, would an American citizen flying Cathay Pacific to Singapore and transiting through Hong Kong International Airport be at risk of arrest if authorities somehow knew that they were openly critical of the Chinese government on social media?

We’ve asked Cathay Pacific, the Hong Kong Civil Aviation Department, and Hong Kong International Airport about this type of scenario. At the time of publication, no response has been received.

There is still much to learn about how the Chinese government will enforce this new security law in Hong Kong. For Cathay Pacific, this may result in a long-term decline in passenger traffic. For now, we will just have to wait and observe how the situation unfolds.

Are you concerned about this new law and what it might mean for travel to, or through, Hong Kong? Let us know in the comments.