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HKSAR prepared for shocks from suspension of preferential status

Global Times

By GT staff reporters Source:Global Times Published: 2020/6/30 20:28:40 Last Updated: 2020/6/30 23:11:32

HKSAR prepares for shocks from US suspension

China will take "necessary countermeasures" to firmly protect its national interests after the wrongful move by the US to revoke the Hong Kong Special Administrative Region (HKSAR)'s special status in a bid to pressure China to drop its new National Security Law, Foreign Ministry spokesperson Zhao Lijian told a routine press conference on Tuesday.

US Secretary of Commerce Wilbur Ross has announced that the US would suspend preferential treatment to Hong Kong, including the availability of export license exceptions.

In a separate announcement, US Secretary of State Mike Pompeo said the US is ending "exports of US-origin defense equipment and will take steps toward imposing the same restrictions on US defense and dual-use technologies to Hong Kong."

Military expert and TV commentator Song Zhongping told the Global Times on Tuesday that the US move is just a political gesture without meaningful effect, as the US does not export anything to Hong Kong that could help China's military development and did not do so even before Hong Kong's national security legislation.

"Many technologies are used by both the civilian sector and the military, and the US strictly manages technological exports to other countries. It is impossible for US firms to export the most advanced technologies to China, and it is also impossible for the Chinese military to rely on technological imports, especially from the US," he said.

China is expected to launch strong countermeasures against the US in response to its unreasonable sanctions on Hong Kong, Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Tuesday.

"If the US imposes tariffs on imports from Hong Kong, Hong Kong must reply in kind. If there is evidence that US companies or individuals are involved in activities separating Hong Kong from the Chinese mainland, they would be punished according to relevant laws," Gao said.

In the past decade, the US trade surplus with Hong Kong has been the biggest among all its trading partners, totaling $297 billion from 2009-18, official data showed. US exports of goods and services to Hong Kong, as well as Hong Kong's direct investment in the US, have supported some 210,000 jobs in the US.

Ni Feng, director of the Institute of American Studies at the Chinese Academy of Social Sciences, told the Global Times that the Trump administration would be "increasingly tough" on Hong Kong-related issues with the approach of the US presidential election in November.

"If US voters like Trump's threatening rhetoric, I believe he would ramp up his crackdown on Hong Kong issues," Ni said.

"We should not be too optimistic as the US Commerce Department may launch financial sanctions - which may be under evaluation - on Hong Kong, which would be a powerful weapon against the global financial hub," Song Guoyou, a deputy director of the Center for American Studies at Fudan University, told the Global Times.

However, Liang Haiming, chairman of the China Silk Road iValley Research Institute, held a different view, from the perspective of the implementation of the phase one trade deal.

"Given that President Trump has slipped behind his Democratic opponent in some recent polls, he would try hard to guarantee the smooth implementation of the agreement in order to gain an advantage in the election," he said, noting that this has become a life-and-death issue for Trump's political career.

"If Trump insists on going against the interests of the US corporate sector and the Wall Street to impose sanctions on Hong Kong, tycoons may 'do anything' to stop Trump's re-election," he told the Global Times.

On Tuesday, HKSAR Chief Executive Carrie Lam Cheng Yuet-ngor told a press conference that no sanctions can terrify Hong Kong, which would be minimally affected by the US pullback.

"I believe the country will take countermeasures when needed and the HKSAR government will fully keep step with [the central government] if the countermeasures proposed by the central government in diplomatic terms require coordinated efforts from the HKSAR government," Lam said.

Stating that Hong Kong is psychologically prepared for the shocks, Lam told reporters on Monday that the US runs a merchandise trade surplus of $30 billion annually with Hong Kong, and the current sanctions only necessitate the application of export licenses for defense and dual-use products.

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