The United States believes Beijing has too much influence in Hong Kong and has threatened to cease recognition of the special administrative zone’s autonomous status, with potentially far-reaching consequences.

US: Hong Kong No Longer Has a ‘High Degree of Autonomy’

The US decided on Wednesday that Hong Kong no longer had a “high degree of autonomy.” The statement came in response to new security laws for Hong Kong that China announced last week and approved this Thursday at the end of its National People’s Congress. It arguably marks the end of individual rights for the Chinese special administrative region.

China’s Premier Li Keqiang defended China’s decision on Thursday. The law served the “constant implementation” of the “one country, two systems” principle and ensured “long-term stability and prosperity” in Hong Kong.

The 1992 US-Hong Kong Act allowed Washington to treat Hong Kong as fully autonomous in trade and economic matters even after Britain returned it to China in 1997. Hong Kong is currently exempt from US punitive tariffs on China and, unlike China, still allowed to import certain sensitive technologies.

However, these exceptions are subject to the condition that Hong Kong can act autonomously from China. It seems apparent that Washington no longer considers Hong Kong autonomous. Accordingly, Secretary of State Mike Pompeo declared that no reasonable person could claim that Hong Kong had maintained a high degree of autonomy vis-à-vis China given the facts.

Range of Options for Cancelling Hong Kong’s Special Status

Withdrawing autonomy status would provide the United States with various options. One of these are sanctions against Chinese officials, such as visa restrictions or asset freezes in the United States. A much more severe option is to withdraw Hong Kong’s special trading status, which is currently still treated independently of China under commercial law. If the US government denied Hong Kong this special status, Hong Kong would be affected by the same rules that apply to mainland China, which would be a hard blow to the Hong Kong economy. Which option the US will utilize is with President Trump. The latter had already announced that “something would be done” in the next days.

China Says it Will Take ‘Necessary Countermeasures’

The Chinese embassy in Washington, meanwhile, said in a statement on Wednesday that China’s new Hong Kong legislation targets a “very narrow category of actions that pose a serious threat to national security” and “do not affect Hong Kong’s high level of autonomy, rights and freedoms of Hong Kong residents or have the legitimate rights and interests of foreign investors in Hong Kong.” However, the embassy also stated that China was inclined to take “necessary countermeasures” to any US action.

Hong Kong Prime Minister Carrie Lam also defends the national security law, saying that it was “totally unacceptable” for foreign lawmakers to interfere in Hong Kong’s internal affairs. Sanctions would only further complicate the situation in the city, Lam said.

Chinese Media Slams American ‘Troublemakers’

In mainland China, the US’ decision was heavily criticized in the Chinese state media. On Thursday night, state-run news agency Xinhua Washington accused the US of conspiring with the “troublemakers” in Hong Kong. Moreover, Washington politicians were “selectively blind” and only interested in “accusing, attacking and slandering China” while supporting Hong Kong and the powers behind it. The latter was precisely the reason why national security legislation was necessary.

There is no question that the security law passed by the National People’s Congress will significantly increase the rights of the Chinese central government to intervene in Hong Kong and Macau, and thus further exacerbating the tense situation. Even more: undermining Hong Kong’s autonomy has the potential to affect trust in the Hong Kong as an international economic hub noticeably and for years to come, while China runs the risk of further jeopardizing its international credibility.

Hong Kong used to be under British rule from 1841 to 1997, apart from a brief period under Japanese occupation during World War II. Britain eventually agreed to transfer the entire colony to China in 1997 after obtaining guarantees that Hong Kong’s system, its freedoms, and way of life would be preserved for at least five decades.

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