China announced on Thursday that it intends to introduce a law in Hong Kong which should ban sedition, secession and subversion against Beijing. It will also allow Chinese national security agencies to operate in the city.
"Hong Kong today is a model of free trade, strong governance, free flow of information and efficiency," said Robert Grieves, president of the American Chamber of Commerce in Hong Kong, in a statement. . "No one wins if the foundations of Hong Kong's role as the main international financial and trading center are eroded."
A traditionally stable workplace
Despite this, Hong Kong's status as a global trade destination never really felt secure after the protests started.
"The road to hell is often paved with good intentions," said Li in August. "We have to be aware of the unintended consequences."
The United States imported nearly $ 17 billion in goods and services from Hong Kong in 2018, while exporting $ 50 billion.
But these figures do not tell the whole story of the relationship between the United States and Hong Kong, and the special status offers the city much more than trade privileges.
"[It's] a little bit misleading ... because the United States sees the trade that goes through Hong Kong to China as trade with China, "said William Reinsch, Scholl president of international trade at the Center for Strategic and International Studies in Washington. . " Anyway, I think the real problem is less the actual amount of trade than the signal that a change in status would send out the unreliability of doing business with Hong Kong. "
Serious development
More than 1,300 US companies alone operate in the city, according to Citi analysts, who added that the threat of revocation of Hong Kong's special status with the United States "could weigh on business confidence."
"It remains to be seen whether the United States will revoke the law immediately," they wrote in a research note on Friday. "Our economists have argued for the special status of [Hong Kong] is likely to remain short term, as the United States and China have a vested interest in maintaining the status quo. "
Secretary of State Mike Pompeo said Friday that the Beijing plan would be "a fatal blow" to the autonomy promised in Hong Kong. And if it went ahead, it would affect Washington's assessment of the territory's status.
"The United States urges Beijing to reconsider its disastrous proposal, to comply with its international obligations and to respect the high degree of autonomy, democratic institutions and civil liberties in Hong Kong, which are essential to preserve its status special under US law, "he said. .
"This authoritarian national security plan will most certainly call into question [Hong Kong's] status as a global banking center, "wrote Stephen Innes, chief global market strategist at AxiCorp, in a research note Friday." I think it's pretty serious. "
Companies doing business in Hong Kong are also concerned about what Beijing's national security law might mean for people working in the city and whether it could deter the ability to attract workers strangers.
"A Beijing-inspired national security law leaves open an interpretation of how such an act will be enforced," said Tara Joseph, president of the American Chamber of Commerce in Hong Kong, in a statement.
The corporate lobby added that "the vaguely defined national security law will make it more difficult to recruit and retain the best talent."