As the Hong Kong protests show no sign of easing, observers are wondering if crunch time is approaching. October 1, 2019, is the 70th anniversary of the founding of the Peoples Republic of China (PRC) and it is just about a month away. Beijing would like to give an image of authority and control on that occasion; the continuance of large-scale protests in Hong Kong would contradict that. The PRC is confronting the most significant challenge to its power since the ill-fated Tiananmen Square uprising, and there are no clear indications as to how it plans to handle it.

The Chinese authorities have been increasingly critical of the protestors, especially after the national insignia at the Central Liaison Office which represents the PRC government in the city was defaced in late July. Since then, the rhetoric has been scaled up to blaming the unrest on unspecified “black hands.”

In the first half of August, the Communist Party of China brass met at the resort town of Beidaihe as per its summer tradition. According to a report, they are increasingly talking about the developments there as a “colour revolution”, of the kind that shook the former Soviet Union and the Balkans in the early 2000, reportedly aided by western intelligence agencies.

On Sunday, the protests picked up momentum, compelling the Hong Kong police to use water cannons for the first time at protestors who threw bricks and firebombs. A Hong Kong police officer also fired a warning shot into the air after seeing a fellow officer fall.

On Monday, China’s official news agency Xinhua shifted from comparing the Hong Kong protests with colour revolutions, to directly charging that they were, in fact, that. A commentary published late on Sunday quoted Deng Xiaoping in 1984 saying that in the event of unrest in Hong Kong, the central government should intervene. The commentary said that under the Basic Law (Hong Kong’s mini-Constitution) and the Garrison Law, “it is not only the authority of the central government but also its responsibility [to intervene]” .

Also Read: Chinese Diplomat Calls Hong Kong Situation ‘Worst Crisis Since 1997’

Last Saturday, at a meeting of 40 advisers and political bigwigs in Shenzen, neighbouring Hong Kong, organised by the Chinese Association of Hong Kong and Macau Studies largely agreed that Beijing had the right to intervene and resolve the crisis and that using the People’s Liberation Army (PLA) to do the needful would not necessarily spell the end of the city’s autonomous status. They said that the protestors were jeopardising the ‘one country, two systems’ framework, rather than defending it. Under this, Hong Kong, though a part of the PRC, has its own political, legal and financial system.

Carrie Lam’s meeting

On the same day, nineteen city influential people and politicians met at the official residence of the Hong Kong chief executive Carrie Lam to suggest a way out of the stalemate. According to the South China Morning Post more than half of them recommended that Lam meet the demand for a public inquiry into the events and completely withdraw the extradition Bill that triggered the current crisis. The report suggests that Lam was hesitant to act on both issues.

But speaking before a meeting with her advisers in the Executive Council on Tuesday morning, Lam acknowledged that the current stalemate arose from the government’s refusal to accept those demands. She said this would not happen as long as there was violence in the streets. She insisted that the Hong Kong police had used minimum force against protestors.

As the Hong Kong protests have continued and gathered intensity, the possibility of a PLA intervention has grown. Speaking at a reception in the city to celebrate the 92nd anniversary of the PLA on July 31st, Major General Chen Daoxiang, the commander of the PLA garrison in the city, said that violence by the protestors would not be tolerated. He said the garrison supported the Hong Kong government’s efforts to deal with the protestors through the law.

The garrison also released a video showing PLA soldiers practising storming a street protest and shouting commands in Cantonese, the language spoken in Hong Kong, rather than the mainland.

The Chinese authorities have also been pointing to the Clause 14 of the Garrison Law of the Hong Kong Special Administrative Region of the PRC which states that the government of the city “may when necessary, ask the Central People’s Government for assistance from the Hong Kong Garrison in the maintenance of public order and disaster relief.” There are some 6,000 PLA soldiers stationed in the city close to the border with the mainland.

Chinese central government must tread carefully

The Chinese central government is likely to be very careful in committing PLA forces in the city which, as one of the major financial and business centres of the world, is a cash cow for its economy. Its stock market is the fifth largest in the world by capitalisation.

Also Read: Hong Kong’s Protests May Have Longterm Effects on Its Economy

Since China’s reform and opening up, Hong Kong has played a significant role as a channel of funds and technology into the mainland, accounting for 50-60% of all FDI flows. Since 1997, the Chinese economy began to get less dependent on Hong Kong, even while the latter’s prosperity became more entangled with that of the mainland.

In 2016, China’s total FDI was $133.7 billion of which 61% came through Hong Kong. In turn, the city has also played a role in China’s outward direct investment (ODI). And in 2016, of the $196.1 billion ODI, 60% was invested in Hong Kong or went to other destinations through Hong Kong. A PLA-led crackdown would lead to a major exodus of businesses, especially MNCs, along with the talent pool of finance professionals.

Given the consequences of the use of the PLA to crush the protests, the Chinese central government may not bind itself to the October 1 deadline. On the other hand, should the situation worsen, it could work along two parallel tracks. First, have Carrie Lam invoke the Emergency Regulations Ordinance which would give the chief executive in council the power to make “any regulations whatsoever which he/she may consider desirable in the public interest.” These could be used to cover issues relating to censorship, detention of protestors and trade.

Second, follow this up with the mobilisation of pro-PRC elements in Hong Kong to mount counter-protests and even take on the protestors with the help of police. Officially the Communist Party of China does not exist in Hong Kong and its operations are through the Central Liaison Office and various front outfits like the Fujian Hometown Association, Hong Kong Residents Association of Tianjin and the newly formed Great Alliance to Protect Hong Kong that held a big rally in mid-August. There are also newspapers like Ta Kung Pao always ready to attack the protestors. These could always be supplemented by volunteers from the mainland.

Manoj Joshi is a distinguished fellow, Observer Research Foundation, New Delhi