China vows payback as US scraps Hong Kong's special status

Showdown takes ugly twist as both nations threaten action against each other's officials

The new Hong Kong Autonomy Act targets with sanctions those who implement the Hong Kong security law. PHOTO: AFP

China and the United States are locked in an ugly showdown after US President Donald Trump revoked Hong Kong's special status and legislated sanctions, bringing further uncertainty to the future of the financial centre still reeling from months of political unrest last year and the current Covid-19 pandemic.

Mr Trump's latest moves were met with swift condemnation from Beijing, which vowed to retaliate and called the actions a "serious violation of international law" and "gross interference" in China's internal affairs.

"The US' attempts to obstruct the implementation of Hong Kong's national security law will never succeed," said a statement by China's Foreign Ministry yesterday.

"In order to safeguard its own legitimate interests, China will make the necessary response and impose sanctions on relevant US personnel and entities."

The US and other liberal democracies have criticised the new Hong Kong national security law that Beijing pushed through just before the 23rd anniversary of the city's handover by the British two weeks ago.

Under the law, anyone charged with subversion, secession, terrorism or collusion with foreign forces to undermine Hong Kong's national security faces up to life in prison.

Before the legislation came into force on July 1, the US already acted to end defence exports and sensitive technology to Hong Kong.

The new Hong Kong Autonomy Act signed into law by Mr Trump on Tuesday targets with sanctions those who implement the Hong Kong security law. It allows the authorities to seize the assets of offending Chinese officials and bar their entry to the US.

"This law gives my administration powerful new tools to hold responsible the individuals and the entities involved in extinguishing Hong Kong's freedom," said Mr Trump at a White House press conference.

"We've all watched what happened. Not a good situation. Their freedom has been taken away. Their rights have been taken away. And with it, goes Hong Kong, in my opinion, because it will no longer be able to compete with free markets."

He also signed an executive order taking away Hong Kong's special trading status with the US, saying Hong Kong will now be treated the same as mainland China.

"No special privileges, no special economic treatment and no export of sensitive technologies."

The extradition deal with Hong Kong and training for its police also come to an end. Licence exceptions for exports to the city will be revoked and officials said it will now be treated like any other city in China.

Since 1992, the US has recognised Hong Kong as a semi-autonomous city with its own legal and economic systems independent of mainland China.

Hong Kong shares ended flat yesterday on news of the punitive moves, with the Hang Seng Index up by 3.69 points, or 0.01 per cent.

Washington has been hardening its stance towards Beijing in recent months over the coronavirus pandemic, Xinjiang, the South China Sea and Hong Kong.

On Tuesday, it issued its toughest position yet on the dispute over the regional waters, declaring China's claims over vast swathes of the sea "completely unlawful", while warning of sanctions.

Yesterday, foreign ministry spokesman Hua Chunying made light of US threats of sanctions, saying that China was not afraid. "If the US insists on making waves, then let the storms become more violent," she said.

Beijing has been fighting fires on several diplomatic fronts in the past week. On Tuesday, Britain decided to ban Chinese tech giant Huawei from its 5G network, drawing sharp rebuke from China, which has accused the United Kingdom of politicising business and technology.

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A version of this article appeared in the print edition of The Straits Times on July 16, 2020, with the headline China vows payback as US scraps Hong Kong's special status. Subscribe