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US warns companies of probable risks of conducting business in Hong Kong

Beijing tells Washington not to interfere in Hong Kong affairs

chinahkf A pro-China supporter holds a Chinese flag to celebrate the 24th anniversary of the former British colony’s return to Chinese rule, on the 100th founding anniversary of the Communist Party of China, in Hong Kong, China July 1, 2021 | Reuters

The US, on Friday, plans to impose sanctions on Chinese officials. In the meantime, the Biden administration has issued a warning to US businesses in Hong Kong about risks to their operations after Beijing imposed the new security law last year. 

The advisory doesn’t ask companies to scale back on investments, but, officials in the Biden administration fear that major multinational businesses and banks may not have come to grips with how much the landscape has changed. The advisory warns businesses that they are subject to the laws of the territory, including the national security law, under which foreign nationals, including one US citizen, have been arrested.

The national security law has already come down harshly on pro-democracy activists and the press. It was the national security law that causes the tabloid critical of authorities in Hong Kong, Apple Daily to shut down.

As per the advisory issued by the State Department, the businesses would be subject to electronic surveillance without warrants and be under the risk of having to surrender corporate and customer data to authorities.

About a year ago, the Trump administration had ordered an end to Hong Kong’s special status under the US law as a repercussion to what he called “oppressive actions” against the former British colony.

The advisory asks businesses to take needed steps to maintain staff in Hong Kong in accordance with the national security law and the potential reputational, economic, and legal risks that accompany it.  “Developments over the last year in Hong Kong present clear operational, financial, legal, and reputational risks for multinational firms,” a senior Biden administration official told Reuters.

China, in response to the US’ plans to impose sanctions on Chinese officials, said Washington should refrain from interfering in Hong Kong affairs.

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