Is This the End of Hong Kong Inc?
The Trump administration’s China policy is mercurial.
Trump has taken a hardline against Beijing on trade but shown little interest in human rights and spoken warmly of his Chinese counterpart Xi Jinping.
He is also reluctant to jeopardise his trade agreement with China as he seeks re-election in November.
American businesses could be hit hard by moves to economically punish Hong Kong.
According to the Congressional Research Service, nearly 300 US companies have a regional headquarters in the city, while 434 that have regional offices.
In 2018, the trade surplus with Hong Kong was America’s largest at $31.1 billion.
But attitudes towards China are hardening within the Trump administration, especially after the coronavirus pandemic.
For Beijing, Hong Kong remains a city of major economic importance, especially for Chinese companies seeking to access foreign currency, international banks and trading firms.
But it is less pivotal than it used to be — last year 12 percent of China’s exports went to or through the city, down from 45 percent in 1992.
Steve Tsang, a China expert at the University of London’s SOAS, said the US move is unlikely to make Beijing think twice.
“I believe Xi will double down and retaliate instead,” he told AFP.
“The escalation may, however, stop at some point, as I doubt that both sides want unlimited escalation at this stage.”