The British seized Hong Kong in the mid-nineteenth century if furtherance of its plan to balance its trade accounts by forcing China to buy the opium it was cultivating in India.  When China announced it was not renewing the 99-year lease forced on them by British arms, Parliament vetoed the idea of granting Chinese residents of the colony citizenship.  The reason for the abandonment?   …England was too cold for Hong Kongers to feel comfortable.

Last month, however, Parliament is now responding to China’s effectively ending Hong Kong’s status as a Special Administrative Region 25 years earlier than promised by offering a path to British citizenship to all pre-Handover (July 1, 1997) Hong Kong citizens.

This at the same time Donald Trump is taking the opposite tack, fomenting anti-Chinese prejudice and apparently condoning race violence in Minnesota by quoting ur-racist George Wallace on Twitter.

The circumstances of the reintegration of Hong Kong into China are, strictly speaking, not a US diplomatic problem. The seizure of land and its return to China are an issue between China and the UK. There is a possible US connection, however. Xi may feel that both the White House and 10 Downing Street are occupied at the moment by epic incompetents, whose shelf life must be limited. So there will be no easier time than now to break the handover agreement and meld Hong Kong back into China.

Trump is framing his response to the Beijing move as opposition. In reality his opting to treat Hong Kong just like any other part of China is giving Xi exactly what he wants. Given that Trump has disavowed cooperation with international allies, he may have no choice.

In another irony, China is now discussing joining the Trans-Pacific Partnership. That’s the anti-China influence group created by the US that Trump withdrew us from early in his administration. If so, Trump will have transformed an anti-Beijing coalition into an anti-US one.

I do think the US and China are in a contest for world economic and cultural dominance. China has the advantage of a much larger population. The US has incumbency, global allies grateful for past support, the dollar, its research universities, its worldwide financial system and its dominance in semiconductor manufacturing. It seems to me that the effect so far, if not the intent, of Trump’s making America “great” again has been to blunt the US edge in all these areas without any thought of gain in return.

I think that this is forcing US-based multinationals to consider the possibility that they may not be able to remain both world leaders and American. Arguably, this train of thought runs much deeper in American society, and is the basis of the massive outperformance of NASDAQ over the Russell 2000 over the past several years.