HONG KONG—The United States warned in a report on March 22 that increased meddling from China in Hong Kong had adversely impacted the city, straining international business confidence in the Asian financial hub.
“The tempo of mainland central government intervention in Hong Kong affairs—and actions by the Hong Kong government consistent with mainland direction—increased, accelerating negative trends seen in previous periods,” the U.S. State Department said in its 2019 report on the Hong Kong Policy Act.
“Growing political restrictions in Hong Kong may be straining the confidence of the international business community.”
In Beijing, Chinese Foreign Ministry spokesman Geng Shuang said Hong Kong matters were an internal affair for China and foreign governments had no right to interfere.
The 1992 U.S.-Hong Kong policy act allows Washington to engage with Hong Kong as a non-sovereign entity distinct from China on matters of trade and economics.
The areas of special treatment for Hong Kong are fairly broad and now include visas, law enforcement including extraditions, and investment.
“Policies and practices of the mainland central government adversely impacted Hong Kong in multiple areas, and mainland pressure resulted in new constraints on Hong Kong’s political space,” the report said.
“In some particularly concerning instances, Hong Kong authorities took actions aligned with mainland priorities at the expense of human rights and fundamental freedoms.”
The continuation of the U.S. Congress enacted policy is predicated upon China and Hong Kong maintaining a so-called “one country, two systems” arrangement.
This mode of governance, that came into effect after Hong Kong reverted from British to Chinese rule in 1997, grants the city a high degree of autonomy, the rule of law and freedoms not allowed under the Communist China controlled mainland.
Hong Kong, which has long acted as a leading re-export and entrepot hub for U.S.-China trade, has largely escaped the brunt of current U.S.-China trade tensions, given its special status as a separate customs entity.
Should the policy act be reviewed, however, the economic impact could be much larger, observers say.
In 2018, the United States’ largest worldwide bilateral trade-in-goods surplus was with Hong Kong, at $25.9 billion, the report said.
The U.S. Consul General in Hong Kong, Kurt Tong, in February expressed concerns about Hong Kong’s autonomy, noting erosions to the “one-country, two systems” formula.
