Will China Kill Hong Kong? Or Will Hong Kong Kill China?

This summer, China tried to make Hong Kong pass a bill that would have allowed China to extradite Hong Kongers charged with a Chinese crime.

Hong Kongers would have none of it.

They took to the streets to protest, and the bill was withdrawn, but not completely killed.

Oops.

As a result, for the past 13 weeks, Hong Kong residents have taken to the streets in increasingly large and violent demonstrations.

It’s no longer about the extradition bill.

It’s about freedom.

And now there’s no end in sight.

So China goofed up twice — first by proposing the bill, and then by not making it disappear completely.

Which means that the Chinese government has a really huge, self-inflicted problem on its hands, to go along with a bunch of other problems.

By all accounts, the country is massively corrupt, with the Army and the grandchildren of Mao Zedong’s comrades controlling pretty much everything.

The banking system is a mess 100 times bigger than the subprime loan crisis we faced back in 2006.

Insiders get bank loans to build entire towns and cities, but those newly built communities lay empty, no one has ever moved into these places, and no one ever will move in. They are literally ghost towns and cities dotting the landscape.

Economic growth has been stagnating, due to the fact that labor and transportation costs are cheaper in places like Vietnam and even Eastern Europe.

As George W. Bush would say, the Chinese government misunderestimated Donald Trump, believing that he was simply transactional in his thinking, instead of seeking to reset the entire trade relationship between the two countries by implementing increasingly punitive tariffs.

Somehow, China has avoided bad press for its incarceration and reeducation of more than 1 million ethnic Muslims the Uighurs.

But as the economists say, things that can’t go on stop.

The expectation has been that China is poised to dominate the planet. But maybe that’s not going to happen quite so quickly.

After all, a decade ago, people thought that the European community had things all figured out.

In the 1980s, we were convinced that Japan would take over the world economy.

Before that, in the 1930s, Italy and Germany looked like they had answers, with the rest of the world mired in economic depression.

So is China really on an unstoppable trajectory to dominate the world? That’s what we thought with each of those other entities, and it turned out not to be true.

After 13 weeks of protests in the streets, and lately the airport, of Hong Kong, maybe the answer is no.

Either China has to go in and crack heads, the way it did 30 years ago at Tiananmen Square, or it loses its sense of authority and invincibility, especially among its own people.

That’s why it goofed twice, first by proposing a patently unpopular law, and second by not making it disappear completely.

Now, in Hong Kong, the democracy genie is out of the bottle.

China is in a no-win position.

Crack heads, China loses; turn tail, China also loses.

This is no longer just about Cathay Pacific flights getting delayed, or an inability to shop in the fanciest parts of a wealthy city.

Instead, either China will be the death of Hong Kong, or Hong Kong will be the death of China.

It’s hard to see a different outcome.

Stay tuned.