(Washington) The United States warned companies Friday of the growing risks of doing business in Hong Kong, saying their routine activities could run afoul of new national security regulations on the financial center.
China had agreed to a “one country, two systems” approach for Hong Kong before the territory was handed back by Britain in 1997.
But Beijing cracked down on mass protests in 2019, with Hong Kong’s unopposed parliament passing an ordinance in March punishing offenses such as treason and insurrection with life in prison.
In updating a business advisory first issued in 2021, the State Department and other U.S. agencies warned of “new and heightened risks” for companies operating in Hong Kong.
“The vaguely defined nature of the law and the government’s previous statements and actions raise questions about the risks associated with routine activities,” the update said of the new national security law, passed in March and known as Article 23.
The opinion also notes that differences are narrowing between Hong Kong and the mainland People’s Republic of China.
“PRC authorities in mainland China appear to have broad discretion to deem a wide range of documents, data, statistics, or materials to be state secrets and to detain and prosecute foreign nationals for alleged espionage,” it noted.
More than 300 people have been arrested under Hong Kong’s first national security law of 2020. According to the State Department, a U.S. citizen is among them.
Hong Kong’s number two Eric Chan said on Saturday that the US advice was an attempt to curb China’s rise and that national security cases were treated fairly in court.
“The national security law has been passed for a long time and we can all see that we have never arrested any businessman without grounds,” Chan told reporters.
The US advice “implies an element of intimidation, to scare away business people who hope to invest in Hong Kong. I don’t think this ploy will succeed,” he added.
The United States has repeatedly warned that Beijing’s security regulations endanger the openness that has allowed Hong Kong to thrive as a commercial hub.