Under the U.S.-Hong Kong Policy Act of 1992, Washington agreed to treat Hong Kong as fully autonomous for trade and economic matters even after China took control. That meant Hong Kong was exempt from Trump’s punitive tariffs on China, can import certain sensitive technologies and enjoys U.S. support for its participation in international bodies like the World Trade Organization.
But the law enacted last year gives the administration broad authority to impose sanctions or other punishments. The administration can also revoke Hong Kong’s special trading status if it chooses.
Such a decision, however, would have far-reaching consequences and jeopardize Hong Kong’s role as one of the world’s leading trade and banking hubs, so the Trump administration may start with smaller steps targeting Chinese Communist Party officials rather than moves that would have far-reaching economic consequences, particularly during the coronavirus pandemic.
Is Hong Kong fated to become just another Chinese city or can it survive as a centre for commerce in the 21st century. That question is more relevant today than it has been since the handover in 1997. Xi Jinping’s administration is intent on pushing the one-country, two systems solution to its limits and that is going to have significant repercussions for how international finance is conducted.Click HERE to subscribe to Fuller Treacy Money Back to top