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The US government issued a warning on Hong Kong’s business risks, reminding US companies to be alert to the risks they face after the implementation of the Hong Kong National Security Act. Washington also announced sanctions on seven officials of the Liaison Office of China’s Central Committee.
The warning pointed out that multinational companies operating in Hong Kong are subject to the “National Security Law”, their employees may also be arrested under the law, there is also the risk of being forced to hand over data to the Chinese government.
US President Biden said on Thursday (July 15): “The situation in Hong Kong is deteriorating, and the Chinese government has failed to abide by its commitments on how to deal with Hong Kong.”
At the press conference held with German Chancellor Merkel that same day, he already stated that he would issue this business warning. “This warning is a reminder of what may happen in Hong Kong.”
The warning was issued jointly by the U.S. State Department, the Department of Commerce, the Department of Treasury, and the Department of Homeland Security. It does not require US companies to reduce their investment in Hong Kong or withdraw from Hong Kong. It only emphasizes the legal, financial, sanctions, and data security risks faced by local businesses, as well as the damage to press freedom.
On Friday, the US Treasury Department also announced sanctions against seven deputy directors of the Liaison Office, including Chen Dong, He Jing, Lu Xinning, Qiu Hong, Tan Tieniu, Yang Jianping and Yin Zonghua. Earlier, the US had announced sanctions on 11 Chinese and Hong Kong officials, including Hong Kong Chief Executive Carrie Lam and Liaison Office Director Luo Huining, claiming that they “damage Hong Kong’s autonomy.”
At a regular press conference held by the Chinese Foreign Ministry earlier on Friday, spokesman Zhao Lijian said that Hong Kong affairs are purely China’s internal affairs and China opposes US interference. “The Chinese side will respond firmly and forcefully depending on the US measures.”
Multinational companies consider leaving Hong Kong
Jeff Moon, who served as an assistant US trade negotiator in the Obama administration, told the BBC that the business warning indicated that the situation was “quite serious.” “I think this reflects the drastic changes that have taken place in Hong Kong.”
Critics worry that the “National Security Law” will weaken foreign businessmen’s confidence in Hong Kong, and Hong Kong will lose its status as one of the world‘s financial centers. According to the law, many foreign citizens have been arrested in Hong Kong, including American human rights lawyer John Clancey.
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In May of this year, the American Chamber of Commerce in Hong Kong published a membership survey report that 42% of the 325 surveyed companies said they were considering or planning to withdraw from Hong Kong because they were uneasy about the National Security Act and pessimistic about the future of Hong Kong.
The Chamber of Commerce issued a statement on the business warning that the geopolitical environment and related risks are “increasingly complex.”
However, Hong Kong’s Secretary for Commerce and Economic Development, Qiu Tenghua, recently said in an interview with China’s state-run media China News Agency that Hong Kong is still very popular with international companies. “Hong Kong is a very free place, especially for companies and business people, they can come and go freely.”
He said that according to a survey conducted by the Hong Kong government, there will be about 9,000 companies setting up headquarters or companies in Hong Kong in 2020, which is similar to the previous year, except that the regional distribution has changed. More companies come from the Chinese mainland and Japan, while the United States and the United Kingdom occupy the third or fourth place.
In July last year, former US President Trump terminated the special status granted to Hong Kong in order to punish China’s “oppressive behavior” in Hong Kong. Since then, the US government’s treatment of Hong Kong’s economy and visas has been the same as that of Mainland China.
Earlier this week, the United States also issued a business warning in Xinjiang, China, reminding American businesses and individuals to be vigilant about forced labor and other infringing entities in Xinjiang to avoid reputation, business, and legal risks associated with them. 14 Chinese companies and other entities were included in the blacklist of economic entities in the United States on the grounds that they were suspected of violating human rights and implementing high-tech surveillance in Xinjiang.