Special Trading Status Of Hong Kong In Jeopardy As US Says Former British Colony No Longer Autonomous From China

The United States on Wednesday (27 May) declared that it no longer considers Hong Kong autonomous from China, a move that could result in loss of Hong Kong’s special trading status with the US and threaten its standing as an international financing hub.

US Secretary of State Mike Pompeo on Wednesday certified to the Congress that Hong Kong does not maintain “a high degree of autonomy from China, given facts on the ground”.

The move comes after the Chinese People’s Congress last week announced its intention to unilaterally and arbitrarily impose national security legislation on Hong Kong.

The proposed legislation could curtail many of the fundamental political freedoms and civil liberties guaranteed to the citizens of Hong Kong in the agreement handing the city over from British to Chinese rule in 1997.

“The State Department is required by the Hong Kong Policy Act to assess the autonomy of the territory from China. After careful study of developments over the reporting period, I certified to Congress today that Hong Kong does not continue to warrant treatment under United States laws in the same manner as U.S. laws were applied to Hong Kong before July 1997,” Pompeo said in a statement.

The US Congress had last year passed Hong Kong Human Rights and Democracy Bill, which was signed into law by President Donald Trump. Under the law, the US government must annually verify to Congress that Hong Kong remains autonomous from China, or it risks losing its special status.

“No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground,” Pompeo added.

While the United States once hoped that free and prosperous Hong Kong would provide a model for authoritarian China, it is now clear that China is modeling Hong Kong after itself, he said.

“The United States stands with the people of Hong Kong as they struggle against the CCP’s increasing denial of the autonomy that they were promised,” Pompeo said.

Pompeo’s decision opens the door for a range of options, from visa restrictions and asset freezes for top officials to possibly imposing tariffs on goods coming from the former British colony.

Until now the US has given Hong Kong - a global financial and trading hub - special status under US law. The provision dates from when the territory was a British colony and gives it favourable trading terms.

However, with the US State Department certifying Hong Kong as no longer autonomous from China, the US Congress, under the last year’s act, can revoke Hong Kong’s special trading status which means the former British colony will be treated the same as mainland China for trade and other purposes.