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Carrie Lam

Changing trade policy on Hong Kong will hurt United States just as much, city’s leader Carrie Lam says in response to critical congressional report

  • Report recommended reviewing arrangement to treat Hong Kong and mainland as separate customs areas in export of dual-use technology
PUBLISHED : Thursday, 15 November, 2018, 10:57pm
UPDATED : Friday, 16 November, 2018, 4:28pm

Hong Kong’s leader on Thursday expressed regret that a US congressional report had seen relations between the city and mainland China through a “coloured lens” and said any change to the city’s trade status would not benefit either side.

Carrie Lam Cheng Yuet-ngor was responding to a report on Wednesday by the US-China Economic and Security Review Commission, which warned Beijing’s “encroachment” on the city’s political system could diminish its standing as a global business hub.

It recommended reviewing the arrangement to treat Hong Kong and the mainland as separate customs areas in the export of dual-use technology – goods with civilian and military applications including numerous electronic components and software.

The arrangement is stipulated in the US’s Hong Kong Policy Act, under which tariffs against the mainland are not automatically applied to the city.

“Any change to trade policy would not only be unfair to Hong Kong, it would also undermine US interests in Hong Kong,” the chief executive said.

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Lam, speaking before heading to a regional economic summit in Papua New Guinea, pointed out that the US enjoyed an annual US$34.5 billion trade surplus with the city, the highest the country had with any economy. Half of the 1,351 US companies in Hong Kong had their regional headquarters in the city too, she said.

“Whether to have such an act hurt others and oneself, I would urge the US and its Congress to think twice,” Lam said, adding she would later meet the American Chamber of Commerce in Hong Kong to express her concerns over the report.

Liberal Party leader Felix Chung Kwok-pan warned that it would be “game over” should the US treat Hong Kong like any other Chinese city.

He urged the government to send an envoy to Washington, or to lobby the US consulate in the city.

“If [the US] treats Hong Kong as just another Chinese city, it will be game over for Hong Kong,” Chung said.

Speaking on a radio programme, the lawmaker also said he expected the US to take action after the government refused in October to renew the work visa of British journalist Victor Mallet, a vice-president of the Foreign Correspondents’ Club (FCC).

If the US treats Hong Kong as just another Chinese city, it will be game over for Hong Kong
Felix Chung, Liberal Party leader

The US report noted how observers saw the visa rejection as “retaliation” for the FCC hosting a talk by Andy Chan Ho-tin, co-founder of the outlawed pro-independence Hong Kong National Party in August, when the government was considering banning it.

IT sector lawmaker Charles Mok said any sanctions involving dual-use technology would have a widespread effect on his industry.

“It may affect companies in biotechnology, information security, artificial intelligence, self-driving vehicles … it covers all innovative technology,” he said.

Mok said businesses may face difficulties in importing machinery for research and development under sanctions.

But Shirley Yuen, chief executive of the Hong Kong General Chamber of Commerce, said business in the city had been operating well and thriving under the “one country, two systems” principle.

“A lot of our business confidence is based on the rule of law, which sets us apart from many places in the world, and the fact that we are an efficient business society,” Yuen said.

Hong Kong’s No 2 official, Chief Secretary Matthew Cheung Kin-chung, fended off accusations the city’s freedoms and legal autonomy had been undermined, pointing out that 14 foreign judges had sat on the top court since the handover of sovereignty in 1997 and that overseas media could operate freely.

A noose is strangling Hong Kong freedoms and our leaders should admit it

“Anyone who criticises Hong Kong for having receding freedoms lacks understanding,” Cheung said.

He said Hong Kong officials in Washington would get in touch with the US government, and he would also meet visiting US officials soon.

Commerce minister Edward Yau Tang-wah said the city’s mini-constitution, the Basic Law, had given Hong Kong the power to have a trade system separate from China’s.

“Under the Basic Law, Hong Kong is able to enjoy high autonomy in terms of tariffs and trade. This has established our uniqueness in the multilateral trade system,” Yau said in Papua New Guinea.

“In addition to that, we have our own trade system, and our import-export regulations, and it has been rigorous and effective for many years.”

In a separate tweet on Thursday, US State Department spokeswoman Heather Nauert said the US was "increasingly concerned by actions in Hong Kong that undermine fundamental freedoms" and called on the Hong Kong and Beijing governments to uphold their commitments under the one country, two systems principle.

She used a UPR31 hashtag and tagged the United Nations Human Rights Council, in reference to the UN body's five-yearly Universal Periodic Review of China and Hong Kong's human rights conditions, done earlier this month.

Additional reporting by Alvin Lum