China could harden its stance on Hong Kong amid perceived interference, says Cornell professor

KEY POINTS

  • Eswar Prasad, a professor of trade policy at Cornell University, says narrative is building up in China on foreign interference in China’s economic and domestic affairs.
  • That could lead to a “hardening of positions” on both the trade war and Hong Kong demonstrations, he predicts.

 China has blamed Western powers for meddling in the Hong Kong protests — that perceived interference could lead to a “hardening of positions,” according to a professor at Cornell University.

“What is happening right now is that narrative is building up in China … that the U.S. and other western powers are interfering in China’s economic affairs and policies, and interfering in what China sees as its domestic political affairs, i.e. Hong Kong,” said Eswar Prasad, a professor of trade policy at Cornell University in New York.

That could potentially “lead to a more precipitate action by the Chinese government to quell the continuing protests in Hong Kong,” Prasad said, especially ahead of the country’s 70th National Day on October 1.

Since early June, increasingly violent protests have gripped Hong Kong, a former British colony which returned to China rule in 1997. The rallies were initially spurred by opposition to a proposed bill that would allow people in Hong Kong to be extradited to mainland China, but it has since evolved into a broader movement calling for democracy.

But the Hong Kong protests are not the only challenge the central government in China is facing.

Beijing has been locked in a trade dispute with the U.S. for more than a year — that dispute intensified last week when both sides slapped fresh tariffs on each other’s goods.

“A temperate resolution to both issues, the trade tensions and the protests in Hong Kong, now looks less likely,” Prasad told CNBC on Wednesday.

China has had terse exchanges with both the U.S. and the U.K. over the months-long protests.

Early this month, a U.S. State Department spokeswoman called China a “thuggish regime” for disclosing photographs and personal details of a U.S. diplomat who met with student leaders of Hong Kong’s pro-democracy movement.

Chinese authorities have asked the U.S. to explain the nature of their relationship, and why that contact was made in the first place.

Last month, Beijing told the U.K. to keep its hands off Hong Kong. The sharp response came after Jeremy Hunt , the British Foreign Secretary at that time, warned of consequences if China were to neglect its commitments to promise basic freedoms to the territory’s people.

— CNBC’s Grace Shao and Reuters contributed to this report.

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