The Biden administration warned investors about the risks of doing business in Hong Kong, and issued a warning saying China’s push to exercise more control over the financial center threatens the rule of law and puts in place endanger employees and data.
The notice released on Friday said Hong Kong’s “new legal landscape” posed particular risks for companies, investors, individuals and academic institutions, among others, operating in the city.
He said these threats fall into four areas: “risks to businesses after the imposition of the NSL; risks to data privacy; risks to transparency and access to critical business information; and risks to companies with exposure to sanctioned entities or individuals in Hong Kong or the PRC. “
“Business and rule of law risks that were once limited to mainland China are now a growing concern in Hong Kong,” according to the adviser, released by the departments of state, trade, finance and national security .
The warning is the latest salvation of a competition that President Joe Biden has considered one of the decisive challenges of the century and that marks a remarkable change for a city that over the decades became a financial center at the same level. than London and New York.
“One country, two systems”
The move highlighted how quickly China’s push for more control over Hong Kong has put an end to the “one country, two systems” approach that Beijing had promised when it regained control of the former. British colony in 1997. the island’s independent judiciary, poignant media and lively protest movements.
“The situation in Hong Kong is deteriorating and the Chinese government is not keeping the commitment it made, of how it would treat Hong Kong,” Biden said Thursday, ahead of the adviser’s release.
Shortly before the advice was published, Beijing pledged a “firm response” to any Washington action.
“We urge the US side to stop interfering in the Hong Kong issue and China’s internal affairs in any way,” Chinese Foreign Ministry spokesman Zhao Lijian told a regular briefing. on Friday in Beijing.
While the advice does not order companies to cut back on investment or leave Hong Kong, Biden administration officials are concerned that major banks and other city-based multinationals have not yet understood how much has changed. the panorama that there is how much risk they run now.
Data access
Specifically, the new adviser warns of the Chinese government’s ability to access data that foreign companies store in Hong Kong.
News arrives that China plans to exempt Hong Kong-listed companies from the first application for approval by the country’s cybersecurity regulator. The exemption, which, according to people familiar with the matter, was outlined by officials in recent meetings with bankers, would remove an obstacle for companies listed in the Asian financial center instead of the United States.
The two largest economies in the world, still so dependent on each other for trade and economic growth, are in confrontations in more and more areas. They are in conflict over the race to develop advanced semiconductor technology, the battle to supply other nations with next-generation telecommunications equipment and the treatment of ethnic minorities in the Xinjiang region.
Despite the turmoil of recent years, foreign banks and other companies have rushed to consolidate their presence in Hong Kong, still seen as a gateway to the wider Chinese market.
Citigroup Inc. he said in May that he plans to hire more than 1,000 professionals in his wealth franchise in Hong Kong over the next five years, stepping up its expansion amid an increasingly heated uptake of talent in the region. Goldman Sachs Group Inc. it hires 320 employees in China and Hong Kong, as China fully opens its $ 54 trillion financial market to foreign brokers and asset managers.
U.S. advisers follow up on Trump administration’s decision last year to withdraw special trade privileges granted to Hong Kong in recognition of China’s past promises to ensure a “high degree of autonomy” in Beijing .
Anti-government protests
The “one country, two systems” approach in Hong Kong had already been pressured before massive anti-government protests erupted in 2019. Beijing quickly moved to silence independent voices, arresting protest leaders, imposing a national security law that would allow the extradition of people accused of crimes against China and forcing the closure of Apple Daily, a high-profile media critical of corruption and the Communist Party.
US-China ties will struggle to improve given the political landmines facing the leaders of the two nations in the coming months and years.
The Biden administration’s support for reopening a review of how the Covid-19 pandemic began and whether it was leaked from a laboratory in Wuhan infuriated Beijing officials. Chinese leaders were also surprised by the administration’s decision to put Trump’s trade tariffs in place.
Meanwhile, calls are growing for the United States to boycott the 2022 Winter Olympics in Beijing, while the midterm elections in the United States later this year will only amplify the rhetoric. In China, President Xi Jinping is likely to sharpen his own tone as he tries to further consolidate his power with a third five-year term, a three-decade policy reversal that limits leaders to two terms.
Biden and Xi address APEC leaders at the Special Summit on Viruses
Biden and Xi were due to take part in a virtual call between APEC countries on Friday. Although they have held other virtual events together, Biden has not personally met Xi as president and officials are undecided on what interaction the two leaders will have at a group meeting of the 20 in Rome this October.
–With the assistance of Jordan Fabian and Brendan Scott.
