A report published in November by the US-China Economic and Security Review Commission, created by the US Congress, contains allegations that Beijing’s encroachment on Hong Kong’s rule of law and freedom of speech has brought about an ongoing decline in the territory’s autonomy.
The commission has thus recommended that the US Congress directs the Department of Commerce to assess the adequacy of US control of sensitive dual-use technologies and goods exported to Hong Kong. One example quoted is carbon fiber used to make both golf clubs and missile components.
The rationale is that the former British colony has long been absorbed into Beijing’s dominion. Now, Beijing’s pull is increasingly felt in all aspects of trade despite the “one country, two systems” constitutional arrangement. The American commission feels that closer political and economic integration with China will lead to US technologies and high-tech goods exported to Hong Kong finding their way to the mainland.
In a nutshell, the commission believes that Hong Kong, a free port, is becoming a conduit for the unauthorized flow of controlled US items to China.
Questions are also being asked if the US-Hong Kong Policy Act – which sets out how Washington deals with autonomous Hong Kong following the 1997 handover to Beijing – should be repealed.
The Hong Kong government has been quick to hit back.
The city’s Chief Executive Carrie Lam decried the report as biased and stressed her administration’s commitment to enforcing strategic trade controls.
But Lam showed reticence when asked if she had the guts to stand up to Beijing and demonstrate to the world her resolve to uphold core values like rule of law and freedom of speech that underpin the city’s place in world of trade and finance.
Party mouthpieces across the border in mainland China have also lashed out at the rhetoric from “anti-Hong Kong and anti-China firebrands”, and warned Washington not to use Hong Kong as a pawn in pursuing its agendas.
Hong Kong’s Secretary for Commerce and Economic Development Edward Yau also reiterated that the city’s trade and economic relationship with the US was mutually beneficial.
Yau told lawmakers in Hong Kong that no US congressmen sat on the commission that produced the report, thus its views did not represent the position of the US Congress or that of the Donald Trump administration.
Still, the report came out after Yau led a lobby delegation to Washington in September in a bid to sell to officials and congressmen the city’s advantages and convince them that its own systems and autonomy promised by Beijing were still “alive and kicking”.
The Hong Kong government has three representative offices in the US, one each in Washington DC, New York City and San Francisco, that perform as quasi-diplomatic missions. Staff at these offices have been active since the report’s release, vigorously lobbying against ripping up the act allowing preferential treatment for Hong Kong.
Members of Hong Kong’s Legislative Council have also urged the government to assess the potential impact to the city’s standing as a financial and trading hub should the US cease to distinguish the city from the rest of China.
A group of Hong Kong lawmakers comprising members from both pro- and anti-Beijing camps are now in the US capital making a joint effort to convince congressmen and business leaders who may have become skeptical about the city’s future.
Statistics-wise, the US holds substantial stakes in Hong Kong as well as in the survival of its autonomy. The city boosts one of the largest American communities in the Asia Pacific region, with more than 85,000 US citizens living there. Hong Kong also plays host to 1,400 US firms, including Apple, which use the city as their regional base for business across Asia.
Facts about trade also make a strong case for Hong Kong.
The city is among America’s top 10 largest export markets and the single largest source of merchandise trade surplus over the years: the US booked a surplus of US$32.6 billion in its trade dealings with Hong Kong in 2017 and the corresponding figure in the first ten months this year is US$26 billion, according to the US Census Bureau.
Carrie Lam revealed when attending the 175th anniversary gala of the US Consulate in Hong Kong that she actually mentioned these figures to President Trump when they met at APEC meetings. “Though I cannot be sure, apparently he was pleased,” said Lam.
Hong Kong is also one of the largest sources of foreign investment to the US.
So far, official responses from the US and its consulate in the city offer some reassurance: in its annual report on Hong Kong’s autonomy, the US consulate said “certain actions” by Beijing were “inconsistent with” its commitment to allow Hong Kong to exercise a high degree of self-governance.
But it found that the city “generally” maintained a high degree of autonomy, “more than sufficient to justify continued special treatment.”