The American Chamber of Commerce in Hong Kong said on Saturday it was a sad day for the global financial centre, hours after U.S. President Donald Trump moved toward stripping the city of its special treatment in a bid to punish China.
In some of his toughest rhetoric yet, Trump said Beijing had broken its word over Hong Kong’s high degree of autonomy by proposing new national security legislation and the territory no longer warranted U.S. economic privileges.
South China Morning Post reports that the US government will begin eliminating special policy exemptions it grants Hong Kong, following its determination earlier this week that the city is “no longer autonomous” from mainland China, President Donald Trump announced on Friday.
The move will affect “the full range of agreements” the US has with Hong Kong “with few exceptions”, Trump said in the Rose Garden at the White House, including its extradition treaty with the city and economic privileges enshrined in US law that differentiate it from mainland China.
“We will take action to revoke Hong Kong’s preferential treatment as a separate customs and travel territory from the rest of China,” said Trump, indicating that the State Department’s travel advisory for the city would be updated “to reflect the increased danger of surveillance and punishment by the Chinese state security apparatus”.
The US would also take steps to sanction Chinese and Hong Kong officials “directly or indirectly involved in eroding Hong Kong’s autonomy”, he said, echoing the language of legislation enacted in November that requires a punitive response from the executive branch in such circumstances.
China’s Global Times, which is published by the People’s Daily, the official newspaper of China’s ruling Communist Party, said Trump’s decision was a “recklessly arbitrary” step.
“We have been preparing for all the different scenarios,” said Hong Kong Finance Secretary Paul Chan Mo-po, noting that revoking the city’s special treatment status would have little impact as its services sector dominates the local economy. The added tariffs would only affect locally produced products exported to the US, which account for less than 2 percent of Hong Kong’s overall manufacturing and less than 0.1 percent of its overall exports.
“Our special treatment status in trade is entrusted by the Basic Law. The law permits Hong Kong to join the WTO as Hong Kong, China, showing that the SAR’s independent tariff zone is granted by the mainland, not by any foreign country,” he said.
While the US move could further weigh on the attractiveness of Asia’s foremost business and investment center, as reported by some Western media, the local official reaffirmed that fundamental advantages of the global financial hub won’t be weakened under the new national security law.
“The national security law for Hong Kong is aimed at four categories. Other [than those categories], the legitimate rights of foreign investors are protected and ensured by the mainland and the Hong Kong SAR government,” Chan said, noting that as a global financial hub, Hong Kong enjoys four core edges.
The Hong Kong government – which has a long history of working ties with U.S. counterparts distinct from Beijing – has yet to respond, although it warned on Thursday the move could be a double edged sword.
More than 1,300 U.S. firms have offices in Hong Kong and provide about 100,000 jobs. In the past decade, the United States’ trade surplus with Hong Kong has been the biggest among all its trading partners, totaling US$297 billion from 2009 to 2018.
Britain, meanwhile, is prepared to offer extended visa rights and a pathway to citizenship for almost 3 million Hong Kong residents in response to China’s push to impose national security legislation in the former British colony.
Reuters / South China Morning Post / Global Times (China)
