China threatened unspecified “strong countermeasures” if the US Congress enacts legislation supporting Hong Kong protesters, in a sign of the deepening strain between the world’s two largest economies as they attempt to seal a trade deal.
China’s foreign ministry issued the warning on Wednesday after the US House passed a package of measures backing a pro-democracy movement that has rocked the former British colony for more than four months. Among them was the Hong Kong Human Rights and Democracy Act, which subjects the city’s special US trading
status to annual reviews and provides for sanctions against officials deemed responsible for undermining its “fundamental freedoms and autonomy.”
The threat roiled markets during Asian trading, at one point wiping out a 0.8% rally in the regional equity benchmark. Futures on the S&P 500 Index were still down 0.2% in London after falling twice that much in Asia.
While the legislation must also pass the US Senate and be signed by President Donald Trump to become law, it already has strong bipartisan support in the Republican-run upper chamber.
The Hong Kong measures were passed by the Democrat-controlled House by unanimous voice votes.
Chinese Ministry of Foreign Affairs spokesman Geng Shuang warned American lawmakers to stop meddling in China’s internal affairs “before falling off the edge of the cliff,” without specifying how it would retaliate. The House action “fully exposes the shocking hypocrisy of some in the US on human rights and democracy and their malicious intention to undermine Hong Kong’s prosperity and stability to contain China’s development,” Geng said.
Both Trump and Chinese counterpart Xi Jinping have so far prevented the international uproar over Hong Kong from scuttling their trade talks. The two sides went ahead with negotiations and reached some broad agreements, even though the House vote was widely expected at the time.
“I don’t think this will undermine the prospect of signing a partial deal next month,” said Wang Huiyao, an adviser to China’s cabinet and founder of the Center for China and Globalization in Beijing.
“The Hong Kong bill is not a done deal and there is still room for redemption.”
A spokesman for the Hong Kong government “expressed regret” over the House action, which came hours before Chief Executive Carrie Lam was slated to deliver her annual policy address. Earlier this week, tens of thousands of protesters gathered in Hong Kong’s central district urging the legislation’s passage as sign of international support, many of them waving American flags.
US lawmakers have embraced the Hong Kong protesters’ cause as the yearlong trade war fuels American support for pushing back against China, and they have hosted some of the city’s activists on Capitol Hill in recent weeks. The National Basketball Association’s struggle to manage Chinese backlash against a Houston Rockets executive’s support for the movement has only focused wider attention on the debate.
The House passed H.Res. 543, a resolution reaffirming the relationship between the US and Hong Kong, condemning Chinese interference in the region and voicing support for protesters. Lawmakers also passed the Protect Hong Kong Act, H.R. 4270, which would halt the export to Hong Kong of crowd-control devices such as tear gas and rubber bullets.
Representative Chris Smith, a New Jersey Republican and a sponsor of the main Hong Kong bill, predicted that the Senate would pass the legislation and dismissed the threats from Beijing.