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US hurts only itself with politically motivated sanctions: Trade expert

By Gu Mengyan in Hong Kong | | Updated: 2020-07-16 03:01
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The United States' politically motivated sanctions against Hong Kong will likely hurt its own interests first and most, a Hong Kong lawyer and trade expert said.

International investors may think twice about their respective stakes in the US market if Washington invokes legislation to punish foreign individuals and entities, said solicitor Kennedy Wong Ying-ho, who is vice-president of the Hong Kong Chinese Importers' and Exporters' Association.

His comments came after US President Donald Trump signed an executive order on Tuesday that ends Hong Kong's special trade status, and also signed into law the Hong Kong Autonomy Act, which imposes sanctions on foreign individuals and financial institutions that are regarded by Washington as contributing to "the erosion of Hong Kong's autonomy".

In an interview with China Daily on Wednesday, Wong said the moves have alarmed global investors, particularly those in Hong Kong and on the Chinese mainland, prompting them to question the US market's stability in the shadow of the unilateralism that the White House is applying.

"I have already heard from a number of businesses here in Hong Kong that they are avoiding investing further in the US, holding onto current investments and observing the general situation," he said.

Wong said these stipulations are more likely to have a direct impact on about 85,000 American citizens currently living in Hong Kong, as well as nearly 1,400 US enterprises, including leading investment banks, that operate in the city, as they may be worried about the possibility of violating sanction rules.

Trump has also threatened to impose on Hong Kong the same high tariffs that have been applied to mainland exports during the Sino-US trade war over the past two years. Earlier, the US had revoked the city's access to export-control exemption licenses, barring sensitive technology shipments to the city.

Wong said these sanctions will barely affect the city, given the fact that it was the US that has run a huge trade surplus with the city in the past decades, and that Hong Kong, a city of professional services rather than manufacturing, does not have much of a need for imported high-tech products from the US.

"For major international trading partners with Hong Kong, they can see that actually Hong Kong's economy, its trade and investment in particular, has really not been affected," he said.

He predicted that this won't be the last time that the US will resort to using Hong Kong as a pawn in an effort to contain China in the escalating rivalry between the the world's two largest economies.

Wong also defended Beijing's promulgation of the National Security Law for Hong Kong — an excuse the White House used to justify its sanctions. Wong said business people's confidence has not been undermined by the new law, as capital continues to flow into the city.

Also dismissing claims that the security law will drive away foreign investors was Hong Kong Financial Secretary Paul Chan Mo-po, who said on Tuesday that the city has been a recent influx of foreign capital.

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