US begins to eliminate Hong Kong’s special status

The United States began eliminating Hong Kong’s special status under US law on Monday, halting defence exports and restricting the territory’s access to hi-tech products as China prepares new Hong Kong security legislation.

The US move comes as the top decision-making body of China’s parliament deliberates a draft national security law for Hong Kong that pro-democracy activists in the city fear will be used to eliminate dissent and tighten Beijing’s control.

“The Chinese Communist Party’s decision to eviscerate Hong Kong’s freedoms has forced the Trump administration to re-evaluate its policies towards the territory,” US Secretary of State Mike Pompeo said.

The Chinese embassy in Washington did not immediately respond to a request for comment.

Last month, President Donald Trump responded to China’s plans for the security law by saying he was initiating a process to eliminate special economic treatment that has allowed Hong Kong to remain a global financial centre since its handover by the UK in 1997.

Trump stopped short of calling for an immediate end to privileges, but said the moves would affect the full range of US agreements with Hong Kong, from an extradition treaty to export controls on dual-use technologies and more “with few exceptions”.

The Commerce Department said it was suspending “preferential treatment to Hong Kong over China, including the availability of export license exceptions”, adding that further actions to eliminate Hong Kong’s status were being evaluated.

In 2018, $432.7m of goods were shipped to Hong Kong under a Commerce Department exception, mostly relating to encryption, software and technology.

Pompeo said the US, effective Monday, was ending exports of defence equipment to Hong Kong and will also take steps to end the export of dual-use technologies to the territory. Dual-use technologies have both commercial and military uses.

Last year, the Department of State approved approximately $2.4m worth of controlled defence articles and services to Hong Kong government authorities, of which approximately $1.4m was shipped, according to State Department records.

“The United States is forced to take this action to protect US national security. We can no longer distinguish between the export of controlled items to Hong Kong or to mainland China,” Pompeo said.

On Friday, the State Department announced it would bar officials responsible for human rights abuses in Hong Kong from entering the US.

In response, Chinese foreign ministry spokesman Zhao Lijian said Monday that the US “scheme… to obstruct the passage of the Hong Kong national security law will never prevail”.

“To target the US’s above wrongful actions, China has decided to impose visa restrictions against American individuals who have behaved egregiously on matters concerning Hong Kong,” Zhao said.

The announcements come at a time of intensified US rhetoric against Beijing as President Trump campaigns for re-election. Opinion polls have shown voters increasingly embittered towards China, especially about the coronavirus, which began there.