The USA deprived the Chinese special region of the status of a privileged business partner due to the loss of autonomy.
US President Donald Trump has decided to close ties with Hong Kong because of Chinese law, which robs the former British colony of autonomy.
The Hong Kongers panicked and rushed to buy the currency, but local authorities assure that America will suffer more from sanctions. Correspondent.net tells the details.
What will happen to Hong Kong after US sanctions
On May 29, the American leader announced a series of sanctions against China, explaining them with hostile actions by Beijing and its policy towards Hong Kong.
Trump says the actions of the Chinese authorities have undermined the autonomy of the former colony and the formula “one country, two systems.” What Washington cooks:
the beginning of the process of canceling all the privileges that Hong Kong enjoyed as autonomy within the PRC, in particular in the field of obtaining visas, trade and the use of dual-use technologies;
sanctions against officials from China and Hong Kong directly or indirectly involved in undermining the region’s autonomy;
the ban on entry into the United States of Chinese students, which may pose a threat to the national security of the country;
Strengthening the security of US financial markets by identifying and blocking unscrupulous Chinese companies.
Trump spoke after the All-China People’s Congress voted on the eve of introducing a national security law in Hong Kong.
The details of the bill have not yet been worked out, but it is known that it will allow the Chinese special services to work in the city and punish for “separatism and subversive activities.” In detail, Hong Kong is losing its autonomy: the US is preparing a powerful response.
The law may come into force by September 2020, when the next elections to the city parliament will be held in Hong Kong. Already voiced rules raise doubts about the future of autonomy.
According to local opposition, the law can be used to remove objectionable candidates for the city parliament and prosecute criticism of the PRC and Chinese officials.
The imposition on the courts of the obligation to protect state security calls into question the independence of the judicial system of the city.
The first to respond to the decision of the American president were residents of 7.5 million Hong Kong. They rushed to buy American dollars and other hard currencies, which is why for the first time in the history of Hong Kong, there was a shortage of cash at exchange points.
The desire to get rid of Hong Kong dollars is explained by fears of possible changes in monetary policy, in particular, the unlinking of the Hong Kong dollar to the American one, as well as the negative consequences of US sanctions.
The panic remains despite local authorities explaining that Hong Kong’s upcoming national security law will not affect its financial system.
May 31, it became known that the US government is selling real estate in an elite area of Hong Kong. We are talking about several mansions in the Shows on Hill area, which are estimated at $ 1.3 billion. The US government acquired this property in 1948.
It is noted that amid the sale of mansions, the State Department is investing in expanding its other property in Hong Kong, in particular, the building of the US Consulate General.
In turn, Hong Kong authorities warn that in the unfolding sanctions war against the special administrative region of China, the United States itself will suffer more.
“Any restrictions will also undermine the interests of American companies in Hong Kong,” Hong Kong Secretary of Financial Affairs Paul Chan recalled in an interview with Standard on Monday.
According to him, the United States has a huge surplus in trade with Hong Kong, which is the third-largest market for American wines and the fourth – for beef. At the same time, the share of direct exports from Hong Kong to the United States is “only less than 0.1 percent of the total volume of all shipments.”
He also believes that Washington’s sanctions will not undermine Hong Kong’s status as an international financial center and will not violate the free flow of capital.
Hong Kong administration chief Carrie Lam, in turn, says countries that have declared sanctions to enact the National Security Act follow double standards.
“They greatly value their own national security, but are biased in their views on ours,” she said. Lam also called for a comparison of how local U.S. authorities react to the protests with how Hong Kong reacted to them.
Hong Kong authoritative economists Andrew Shen and Chao Gen write in their article for Project Syndicate that there is little strategic sense in escalating the geopolitical rivalry between the United States and China.
As the last few decades have shown, global cooperation – especially in the field of trade – is a real, mutually beneficial strategy, and trade wars and zero-sum geopolitical competition undermine prosperity for everyone, they write. In addition to conducting a two-way strategic game, the US – a long-standing global leader – has a moral obligation to help the rest of the world avoid the COVID-19 depression trap, which is more dangerous and relevant than the so-called “Thucydides trap” the inevitability of war between the US and China – However, judging by the last signals, we should not count on it.