The US has officially revoked Hong Kong’s special status.
The announcement, delivered by Wilbur Ross on Monday afternoon, comes after weeks of global hand-wringing over China’s new national security law, which effectively allows Beijing to override the city’s legal system.
China’s decision to clamp down on protesters and other dissidents in the city came after nearly a year of demonstrations which turned violent, plunging Hong Kong into recession long before the pandemic pushed the rest of the world into a deep economic slump. Earlier this month, details of the new law revealed the scope of the measures — they are, as expected, invasive.
Since the specifics were made public, the Trump administration has struggled to craft a response that strikes a balance between solidarity with the pro-democracy movement and the preservation of the “phase one” trade deal between the world’s two largest economies. The market has long suspected the agreement is “toast” (as one expert put it).
That effort is made immeasurably more difficult by the necessity of standing with the rest of the western world in opposition to China’s record of human rights abuses in Xinjiang.
Although the US president did finally sign bipartisan legislation green-lighting sanctions on Chinese officials responsible for those acts, John Bolton claims Trump indicated to Xi last summer that the White House did not intend to intervene in any way to protect Uighurs who are detained in “re-education camps”.
Earlier this month, Trump told Axios he held off on sanctions in an effort to ensure the trade deal could advance. Last week, Peter Navarro indicated the trade agreement is as good as dead, only to recant minutes later, claiming his comments were taken “wildly out of context”. The administration insists the deal is still on, but at this point, nobody believes China could live up to its year-one commitments under the accord even if it wanted to.
Earlier, in a statement, Mike Pompeo said the US is ending exports of US-origin defense equipment “and will take steps toward imposing the same restrictions on US defense and dual-use technologies to Hong Kong as it does for China”.
The Senate has passed bipartisan legislation aimed at punishing banks for interactions with Chinese officials associated with the new national security law in Hong Kong. On Monday, China responded to Pompeo’s move banning entry for some officials by threatening to impose visa bans on Americans who “behave badly in Hong Kong’s affairs”.
On imagines Ross’s Monday afternoon remarks will count as “bad behavior” in Beijing.
“With the Chinese Communist Party’s imposition of new security measures on Hong Kong, the risk that sensitive US technology will be diverted to the People’s Liberation Army or Ministry of State Security has increased, all while undermining the territory’s autonomy”, Ross said, in a short statement. “Those are risks the US refuses to accept and have resulted in the revocation of Hong Kong’s special status”.
It wouldn’t be accurate to say this is unexpected (Trump effectively previewed it several weeks ago during a press conference), but it will certainly grab headlines and will doubtlessly provoke a sharp response from Beijing.
“Commerce Department regulations affording preferential treatment to Hong Kong over China, including the availability of export license exceptions, are suspended”, Ross went on to say, adding that “further actions to eliminate differential treatment are also being evaluated”.
He “urged” the Chinese to “immediately reverse course and fulfill the promises it has made to the people of Hong Kong and the world”.
If that’s supposed to mean reconsidering the national security law, Wilbur can forget it.