US-China trade war puts Hong Kong at risk, city’s commerce secretary says

In Washington, Edward Yau stresses that Hong Kong is vulnerable because it is ‘the most open trading agent in our part of the world’

PUBLISHED : Thursday, 27 September, 2018, 5:43am
UPDATED : Thursday, 27 September, 2018, 11:29pm

Hong Kong’s commerce secretary urged the Trump administration on Wednesday to stop escalating trade tensions with China and work together towards a solution, saying his city’s status as a global trading hub might be at risk.

Speaking to the Washington-based Atlantic Council, Edward Yau Tang-wah, the city’s secretary for commerce and economic development, said Hong Kong was caught in the crossfire in the trade war between Washington and Beijing.

“Hong Kong is in fact the first to suffer from any trade dispute among big players, because we are most vulnerable as the most open trading agent in our part of the world,” he said.

In a defence of free trade, Yau said that no country, big or small, should abandon global trade, whatever its concerns.

In US-China trade war, Hong Kong must protect its unique interests

“The beauty of free trade is that it’s not a zero-sum game. Will trade winds still prevail if hurricanes become the new normal?” asked Yau, who was on his second trip to the United States since US President Donald Trump officially began the trade stand-off with Beijing by assessing punitive tariffs on US$34 billion in Chinese imports in July.

Insisting that the US and China needed to reach a resolution quickly, before too much damage was done, Yau spoke poetically: “In the time of rough weather or doubt, should we just walk away and blame each other? Or should we reconnect and bridge over doubts and differences?”

The trip by Yau, who met US Secretary of Commerce Wilbur Ross and other administration officials on Tuesday, has two aims: convince the Trump administration to help spare the city from possible collateral damage from the trade war and promote business ties with the US amid soaring uncertainties.

In 2017, total trade in goods and services between the US and Hong Kong was close to US$70 billion, according to the city government. The US was Hong Kong’s second-largest goods trading partner, while Hong Kong ranked ninth-largest among destinations for US exports.

According to a statement by the city government, Yau told Ross that the strong tradition of rule of law, low levels of corruption, highly efficient business environment, world-class infrastructure and highly professional services continued to make Hong Kong a preferred platform for US business and investment activities.

Yau also attended a signing of a statement between the US Department of Commerce and the Hong Kong Productivity Council about collaborating on smart technology.

Even before Hong Kong’s handover to China in 1997, the US has pledged to deal with the city separately from mainland China in terms of trade and economic matters. Yau has travelled to the US in the hopes of maintaining that special status and sparing the city from possible collateral damage stemming from the trade war.

Yau noted that Hong Kong depended on trade, the single biggest pillar for the city’s economy.

“In a way, we are defenceless,” he admitted. But having said that, Yau added that “we will be the ones not to close doors, still trying to bring people together”.

Also speaking at the event, Kurt Campbell, a former assistant Secretary of State for East Asian and Pacific Affairs, said Hong Kong needed to play a bigger role in relations between China and the US amid mounting hostility and an unfolding geopolitical rivalry.

“Hong Kong is unique in the sense that it represents not only China in a very complex way, but is also a bridge and has always been a bridge to the West,” Campbell said, adding that “in the time ahead Hong Kong is increasingly going to be asked to play a role as an interpreter, as a bridge, leading the effort in encouraging dialogue, trying to find common ground that is very important.”

Campbell, a long-time aide to former secretary of state Hillary Clinton in the Obama administration, described conversations he had had with senior Chinese leaders in Beijing last week. “They were digging in for what is likely to be a very long-term, bitter, unremitting, probably unrewarding set of economic challenges with the US,” he said.

Campbell added: “I am one who firmly believes the US and China, despite our difficulties and differences, must come to terms and find a way to share responsibilities and power of the 21st century. That path is being made much more difficult and the challenges ahead are enormous across the board, strategically, economically and politically.”