How special is Hong Kong’s SAR status amid the US-China trade war?

Caught between Washington and Beijing, the city is now in a difficult position with its reputation as a beacon of free trade challenged by the row

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With the trade war under way, uncertainty remains over whether Washington will view Hong Kong as an independent economic entity. Photo: EPA-EFE

Tammy Tam

Tammy Tam is the South China Morning Post's Publisher.

Published: 3:14pm, 22 Jul 2018Updated: 9:47pm, 22 Jul 2018

How special is it to be a Special Administrative Region (SAR) of China?

Answers may vary, but the 1992 Hong Kong Policy Act adopted by the US Congress is quite telling. It affords post-1997 Hong Kong a special status different from mainland China on trade-related matters by recognising the city’s own trade and customs systems.

But the intensifying China-US trade war has turned it into a testing case for the city.

As the US keeps accusing China of stealing its technologies, Beijing has come to believe that Washington’s real intention is to contain China’s rise, and so insists its national development interests will never be compromised.

As the rhetoric on both sides covers the much broader issue of national interests, and US President Donald Trump does not hesitate to drag allies including the European Union, Japan and South Korea into troubled waters, Hong Kong finds itself caught in a difficult position. And that is posing a big challenge to the political wisdom of the city’s leadership.

US President Donald Trump, seen here with Japanese Prime Minister Shinzo Abe, has no qualms criticising allies such as Japan. Photo: AFP/ Nicholas Kamm

For 24 consecutive years, Hong Kong has been ranked by the Heritage Foundation as the world’s freest economy, and it remains as an independent member of the World Trade Organisation under the “one country, two systems” policy. But all this has apparently failed to protect Hong Kong from collateral damage.

How special is Hong Kong’s SAR status amid the US-China trade war?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Caught between Washington and Beijing, the city is now in a difficult position with its reputation as a beacon of free trade challenged by the row

Caught between Washington and Beijing, the city is now in a difficult position with its reputation as a beacon of free trade challenged by the row