Tuesday , August 4 2020

Trump ends Hong Kong special status with US to punish China

Bloomberg

Donald Trump ordered an end to Hong Kong’s special status with the US and signed legislation that would sanction Chinese officials responsible for cracking down on political dissent in the city, drawing a rebuke from China and adding fresh uncertainty for businesses including banks in the financial hub.
“No administration has been tougher on China than this administration,” the US president said, announcing the two moves in the White House Rose Garden. Trump also said he had no plans to speak with President Xi Jinping, deviating from his pattern of criticising Beijing while tempering it with warmth and respect for the Chinese leader.
Trump had threatened to take action ever since Chinese officials imposed the sweeping national security law on Hong Kong about two weeks ago. China’s implementation of the law, and the reaction of major trading partners who have criticised it, could have a substantial impact on a Hong Kong economy already battered by months of historic anti-government protests and coronavirus restrictions.
On Wednesday, China vowed to take strong countermeasures and sanction US officials and entities over the Hong Kong law, without elaborating. It urged the US to “correct its wrongdoings” and to stop interfering in Hong Kong affairs.
“If the US continues such action, China will resolutely take countermeasures,” the Foreign Ministry said in a statement. “To safeguard China’s legitimate interests, we will take necessary measures and impose sanctions on relevant individuals and entities from the US.”
Foreign Ministry spokeswoman Hua Chunying said at a separate afternoon briefing that the US legislation “smears” the Hong Kong national security law.
Under the law, banks are granted a kind of year-long grace period to stop doing business with entities and individuals the State Department determines to be “primary offenders” when it comes to undermining Hong Kong’s autonomy. Neither Trump nor his administration specified which Chinese officials might be sanctioned.
After that period, the Treasury Department can impose a variety of penalties on those institutions, including barring top executives from entering the US and restricting the ability to engage in US dollar-denominated transactions, according to Pat Toomey, a Pennsylvania Republican who co-sponsored the
legislation. “These measures, alongside Beijing’s own crackdown, place Hong Kong at the very front lines of the increasing tensions between the US and China,” said Antony Dapiran, a Hong Kong-based lawyer and author of “City on Fire: The Fight for Hong Kong.”
Equities in Hong Kong slipped, with the benchmark Hang Seng Index losing 0.5% to head for the lowest close since July 2. Chinese technology firms led the losses, along with Hong Kong property developers. Under the United States-Hong Kong Policy Act of 1992, the US treats Hong Kong, a semi-autonomous part of China with its own legal and economic system, differently than the Chinese mainland in trade, commerce and other areas.

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