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World Washington is warning American firms about doing business in Hong Kong

12:45  16 july  2021
12:45  16 july  2021 Source:   cnn.com

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The US government is preparing to warn American companies about the risks of doing business in Hong Kong .

The Biden administration is expected to issue a blanket warning to U.S. firms about the risks of doing business in Hong Kong as China continues to clamp down on political and economic freedoms in the territory. "And so it is more of an advisory as to what may happen on Hong Kong , it’s as simple as that, and as complicated as that.”' The United States under both the Trump and Biden administrations has determined that since the passage of a new national security law last year, Hong Kong no longer enjoys the significant autonomy from mainland China that Beijing had pledged to respect for 50 years

The US government is preparing to warn American companies about the risks of doing business in Hong Kong.

Joe Biden wearing a suit and tie: President Joe Biden speaks during a news conference with German Chancellor Angela Merkel in the East Room of the White House in Washington, Thursday, July 15, 2021. (AP Photo/Susan Walsh) © Susan Walsh/AP President Joe Biden speaks during a news conference with German Chancellor Angela Merkel in the East Room of the White House in Washington, Thursday, July 15, 2021. (AP Photo/Susan Walsh)

US President Joe Biden on Thursday confirmed reports in various media outlets this week that his administration plans to soon issue an advisory to companies that will caution them of a "deteriorating" situation in the Chinese territory.

"The situation in Hong Kong is deteriorating, and the Chinese government is not keeping its commitment that it made, how it would deal with Hong Kong," Biden told reporters at the White House on Thursday, referencing Beijing's pledge to maintain the city's semi-autonomous status for 50 years after its 1997 handover from Britain.

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WASHINGTON --The Biden administration is expected to issue a blanket warning to U.S. firms about the risks of doing business in Hong Kong as China continues to clamp down on political and economic freedoms in the territory. U.S. officials say the advisory could be issued as soon as this week. The new warning would come on the heels of a similar advisory issued earlier this week reminding American companies about potential sanctions liability if they engage in business with Chinese entities that operate in the western Xinjiang region, where China is accused of widespread

Relations between Washington and Beijing are rapidly deteriorating — and Hong Kong has found itself at the center of the fight. In the latest development, the Treasury Department on Friday imposed sanctions on 11 Hong Kong officials, including Chief Executive Carrie Lam, for restricting freedoms and undermining the territory’s autonomy as part The sanctions announced Friday allow U.S. officials to seize any property the designated officials may have in the United States and prohibits them from doing business in the country. As The Post’s Shibani Mahtani wrote: the sanctions “also mark a clear shift

Biden described the announcement as "more of an advisory as to what may happen with Hong Kong," without divulging more details, and experts believe it won't go much beyond flagging the rising risks.

This won't be the first time that Washington is urging caution about Hong Kong, which has undergone significant change since pro-democracy, anti-government protests roiled the city in 2019. China cracked down on Hong Kong last year by implementing a sweeping national security law that signaled Beijing is taking ever tighter control. The law raised questions about the city's future as an international business center.

Following the passage of that law, former President Donald Trump revoked the United States' special relationship with Hong Kong, which has in the past exempted the city from certain tariffs, among other privileges.

Biden says Hong Kong is 'deteriorating,' and the administration is set to release an advisory for US businesses on the situation

  Biden says Hong Kong is 'deteriorating,' and the administration is set to release an advisory for US businesses on the situation "The Chinese government is not keeping its commitment that it made, how it would deal with Hong Kong," President Biden said on Thursday."Let me talk about the business advisory," Biden said. "The situation in Hong Kong is deteriorating. And the Chinese government is not keeping its commitment that it made, how it would deal with Hong Kong.

WASHINGTON (AP) — The Biden administration is expected to issue a blanket warning to U.S. firms about the risks of doing business in Hong Kong as China continues to clamp down on political and economic freedoms in the territory. U.S. officials say the advisory could be issued as soon as this week. The new warning would come on the heels of a similar advisory issued earlier this week reminding American companies about potential sanctions liability if they engage in business with Chinese entities that operate in the western Xinjiang region, where China is accused of widespread

Hong Kong has a sizable expat business community (among them are thousands of American bankers and other financial services employees). The American Chamber of Commerce in HK says it has more than 1.2K members US firms are already worried about the possibility that, under the new national security law, Beijing can access any data stored on their servers. And although they were both working on the mainland when they were initially arrested, the cases of Canadian businessmen Michael Korvig and Michael Spavor remain a cautionary tale for any westerner hoping to do business in China.

The US government also sanctioned several officials last year, including Hong Kong Chief Executive Carrie Lam, who later said she was forced to stockpile cash because the restrictions cut her off from the global banking system. (Reuters reported Thursday that Washington is preparing to impose financial sanctions on "a number of Chinese officials" over Hong Kong, citing two anonymous sources. CNN Business has reached out to the US State Department for comment.)

Biden's business advisory "probably won't pack an immediate punch," according to Brock Silvers, chief investment officer for Hong Kong-based Adamas Asset Management. He added that "few US companies currently operating in Hong Kong will be surprised at its content or otherwise unaware of Hong Kong's growing risks."

But Silvers said that it does reflect an "increasingly contentious" relationship between China and the United States. Relations have been eroding for years as the two countries clash over everything from Hong Kong and Xinjiang to Big Data, trade and foreign investment.

The U.S. will warn companies about Hong Kong's 'deteriorating' situation, Biden says

  The U.S. will warn companies about Hong Kong's 'deteriorating' situation, Biden says U.S. President Joe Biden said China's government "is not keeping its commitment" that it made on Hong Kong."The situation in Hong Kong is deteriorating. And the Chinese government is not keeping its commitment that it made how it would deal ... with Hong Kong," Biden said at a Thursday news conference with visiting German Chancellor Angela Merkel.

The U.S. will warn American companies this week of the increasing risks of operating in Hong Kong , the Financial Times reported, as Washington seeks to ramp up pressure over Beijing’s crackdown on the financial center. The risks include the Chinese government’s ability to gain access to data that Such a warning from Presiednt Joe Biden’s administration would underscore how Washington ’s concerns about the former British colony have escalated since Beijing launched a crackdown on local democracy demonstrations in 2019. It would follow a Trump administration decision last year to roll

The business advisory warning from the U.S. would follow a Trump administration decision last year to roll back special trade privileges granted to Hong Kong in recognition of China’s promise to ensure a “high degree of autonomy” for the city from Beijing. Responding to the reports on Tuesday, China’s Foreign Ministry reaffirmed its opposition to what it views as U.S. interference in Hong Kong ’s affairs. Ministry spokesman Zhao Lijian told reporters that the city had been more stable under the security law.

American companies have also been treading carefully in Hong Kong for a while, too, as the distinction between operating there and in mainland China fades.

Apparel and footwear company VF Corp announced in January that it would move Asia operations out of Hong Kong, relocating its supply hub to Singapore and establishing other services in Malaysia. It moved brand operations to Shanghai. The New York Times, meanwhile, moved its digital news operation for Asia from Hong Kong to Seoul.

Big Tech players have also expressed reservations: Facebook, Google and Twitter have paused the review of requests for user data from the city's government.

Last month, the president of the American Chamber of Commerce in Hong Kong called the demise of the city's pro-democracy tabloid Apple Daily a "shot across the bow" after its journalists were arrested and millions of dollars in assets were frozen. Authorities cited violations of the new national security law as their rationale for cracking down on the publication.

"It's not just the closure of Apple Daily," AmCham Hong Kong President Tara Joseph told CNN Business at the time. "It's the new normal, and the change that Hong Kong is going through from its era as a post-British colony to an era where it is, more and more, part and parcel of China."

Washington warns of "growing risks" for businesses in Hong Kong

 Washington warns of © Isaac Lawrence a ferry crosses the Port Victoria in Hong Kong, July 15, 2021 The United States issued a warning Friday to US companies on In the existence of "growing risks" for their operations in Hong Kong, after the establishment of restrictions by Beijing aimed at this historic financial center. Companies should "be aware of potential risks of reputation, regulatory, financial, and in some judicial cases, associated with their operations in Hong Kong," says the warning.

The Hong Kong government has pushed back on such concerns. Lam told reporters last month not to accuse Hong Kong authorities of "using the national security law as a tool to suppress the media or to stifle the freedom of expression." Officials have also defended the city's status as a major financial hub, with the China Liaison Office in Hong Kong recently saying that its business environment had been stabilized.

The forthcoming announcement from the Biden administration is a "statement of the obvious," according to William Reinsch, a trade expert at the Center for Strategic and International Studies who served for 15 years as president of the National Foreign Trade Council.

"'One Country, Two Systems' is dead," he said, referring to the rule that has for more than 20 years afforded Hong Kong political and legal freedoms that are not available on the Chinese mainland.

"That makes it essentially a warning to US companies that the risk of being [in Hong Kong] has gone up significantly and puts the government in the position of being able to say, 'We told you so,' when something bad happens. And it will," Reinsch added.

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