WORLD NEWS

Trade between the US and Hong Kong under threat

Published on: 28th May 2020

US Secretary of State declares that Hong Kong is no longer autonomous from China.

As Beijing takes the controversial decision to impose a new security law on the territory, it has been revealed that Secretary of State Mike Pompeo said in a statement: “No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground.”

The US Secretary of State has already informed Congress that he believes Hong Kong no longer merits special treatment under US law. This has potential major economic implications for Hong Kong’s status as a trade hub status and is likely to anger the Chinese authorities.

Mike Pompeo claimed that the new security law was “only the latest in a series of actions that fundamentally undermine Hong Kong’s autonomy and freedoms. It is now clear that China is modelling Hong Kong after itself.”

Hong Kong’s Chief Executive Carrie Lam has denied that the law, which could be in force by end of June, will curtail the rights of Hong Kong residents, however the plan has been widely criticised internationally.

Until now the US has granted Hong Kong special status under US law. The provision dates from when the territory was a British colony and means it enjoys favourable trading terms. Since last year, this status has been conditional on the US secretary of state regularly certifying that Hong Kong maintains sufficient autonomy from mainland China. Failure to do so allows the US Congress to revoke Hong Kong’s special trade status, which would mean treating Hong Kong the same as mainland China for trade purposes.

Such a move would jeopardise billions of dollars’ worth of trade between Hong Kong and the US and act as a disincentive for future investment there, a move which would have major implications for the toy industry. Mainland China would also suffer repercussions, as many transactions with the rest of the world are carried out via Hong Kong, which is used as an international base by many mainland companies.

Pro-democracy activist Joshua Wong has called on US, European and Asian leaders to reconsider Hong Kong’s special trade status under the new security law. He warned that once the law is implemented, Hong Kong will be assimilated into China’s authoritarian regime, creating “massive damage to expats and investors in Hong Kong” and said that maintaining the city’s autonomy was the only way to protect business.

 

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