A billboard referring to Beijing’s National Security Law for Hong Kong, seen beyond a Chinese national flag held up by a pro-China activist during a rally outside the US Consulate in the city. Photo: AFP/Anthony Wallace

The United States issued an advisory to warn American firms about the rising risks they will face when operating in Hong Kong under the city’s new National Security Law. 

Businesses in Hong Kong are subject to the territory’s laws, including the National Security Law, and face risks associated with electronic surveillance without warrants and the surrender of corporate and customer data to authorities, according to the advisory issued by the US Departments of State, Treasury and Homeland Security.

Under the law, foreign nationals, including one US citizen, have been arrested, it noted. Individuals and businesses should be aware of the potential consequences of engaging with sanctioned individuals or entities and warns that they could face Chinese retaliation for complying with US and other international sanctions, it added. 

On Thursday, US President Joe Biden said at a joint news conference with German Chancellor Angela Merkel that the US would issue an advisory to warn American companies about the risks of doing business in Hong Kong.

“The situation in Hong Kong is deteriorating. And the Chinese government is not keeping its commitment that it made how it would deal with — with Hong Kong,” said Biden. “And so it is more of an advisory as to what may happen in — on Hong Kong. It’s as simple as that and as complicated as that.”

President Joe Biden speaks during an East Room event on troop withdrawal from Afghanistan at the White House, July 8. Photo: AFP / Alex Wong / Getty Images North America

Prior to this, media reports had said that the Biden administration would soon underline the risks US companies face from Beijing’s ability to obtain their private data in the city, as well as a new Chinese law that enables authorities to impose retaliatory penalties to companies and individuals that follow US sanctions against mainland Chinese groups and officials.

On June 24, Biden said it was a sad day for Hong Kong’s press freedom as the Apple Daily, a pro-democracy newspaper, was forced to close down under Beijing’s intensifying repression. He said the United States would not falter in its support of people in Hong Kong and all those who stand up for the basic freedoms all people deserve.

On July 8, the European Parliament passed a non-binding resolution urging the European Union countries to impose sanctions against individuals and entities responsible for alleged violations of human rights and international law in Hong Kong under the EU human rights sanctions regime.

Five tasks ahead

On Friday, Xia Baolong, director of the Hong Kong and Macau Affairs Office (HKMAO), gave a speech in Beijing during an online forum to celebrate the first anniversary of the implementation of the National Security Law in Hong Kong. The forum was attended by officials, politicians and academies in Hong Kong and Macau.

Hong Kong’s Chief Executive Carrie Lam said Xia had mentioned “five tasks” for Hong Kong to complete in the coming year.

Those include passing legislation of the Basic Law’s Article 23 to safeguard national security, handle cases related to the alleged violations of the National Security Law, strengthen the guidance, supervision and management of schools, universities, media and social media companies, promote the importance of national security in the society and complete the three elections.

The three elections refer to the Election Committee elections on September 19, the Legislative Council elections in December 19 and the Chief Executive election on March 27 next year.

Two of the five tasks, the Article 23 legislation and the tightening control in the education and media sectors, are not seen in Xia’s speech posted on HKMAO’s website. It has been the first time in recent years that a Beijing official urged the speeding up of the Article 23 legislation.

In 2003, the Hong Kong government launched the Article 23 legislation but eventually withdrew it due to a lack of support from the Liberal Party, which represents the business sector. Last year, Beijing implemented the National Security Law, which covers four offenses including secession, subversion, terrorism and collusion with foreign forces, for Hong Kong.

The coming Article 23 legislation will cover more offenses including treason, sedition and theft of state secrets.

A police officer wraps police tape outside of the headquarters of the Apple Daily newspaper and its publisher Next Digital Ltd. in Hong Kong, China, on Thursday, June 17, 2021. Photo: Vernon Yuen/NurPhoto via AFP

In his speech, Xia praised the Lam administration, the Hong Kong Police Force, the patriots in the city and the Hong Kong-based international companies that support the National Security Law for their contributions in restoring the order in Hong Kong and safeguarding the territory’s stability and prosperity.

Xia said the implementation of the National Security Law had not undermined Hong Kong’s status as a financial hub but rather increased international investors’ confidence in the city, given that the amount of capital raised from initial public offerings (IPOs) and total deposits in the banking system had increased over the past one year.

Xia urged Hong Kong to exclude anti-China rabble-rousers from its governing system by screening candidates in the coming three elections. He said people who administer Hong Kong must be staunch patriots with strong abilities.

He also said Hong Kong leaders must have the courage to fight against any speech and behavior that hurt China’s sovereignty, safety and development interests and Hong Kong’s stability and prosperity.

Albert Chen, a legal scholar and a member of the Basic Law Committee, said Xia had cited the lyrics of a song to encourage Hong Kong patriots to listen to different views and unite together. However, the song name and lyrics were not seen on HKMAO’s website.

More US sanctions

Reuters reported that the US would sanction seven officials from the Chinese government’s Liaison Office due to an erosion of rule of law in Hong Kong.

According to a statement released by the US Department of the Treasury, seven Chinese officials have been added to the Office of Foreign Assets Control’s specially designated nationals list.

Xia on Friday criticized Western politicians for imposing sanctions against Hong Kong and Chinese officials before the United States unveiled a new round of sanctions focused on Hong Kong issues on the same day.

Xia Baolong in a file photo. Image: Facebook

“I’d warn the politicians in the US and some countries and those in the European Parliament,” Xia said.

“You brutally trampled on international law and interfered in our country’s internal affairs by imposing some meaningless sanctions on us. It can only arouse our anger and contempt for you, sound the death knell your agents – the anti-China rabble-rousers in Hong Kong – and lift a stone to drop on your own feet.

“History has proved many times that victory will always belong to Chinese people,” Xia added, noting that Chinese President Xi Jinping had said on July 1 that foreign forces would “face broken heads and bloodshed” if they tried to suppress the 1.4 billion Chinese people.

Read: US expected to impose more HK clampdown sanctions