WASHINGTON – The United States revoked on Monday Hong Kong’s special trading status, citing the risk that sensitive American technology could be diverted to Chinese authorities, the commerce secretary said.
“Commerce Department regulations affording preferential treatment to Hong Kong over China, including the availability of export license exceptions, are suspended,” Wilbur Ross said in a statement.
The action was taken as the Standing Committee of China’s National People’s Congress is debating a controversial national security law for Hong Kong that pro-democracy activists there fear will be used to effectively eliminate protest and dissent.
Approval by that committee is the last step before the law enters into force.
In that regard, Ross said that “with the Chinese Communist Party’s imposition of new security measures on Hong Kong, the risk that sensitive US technology will be diverted to the People’s Liberation Army or Ministry of State Security has increased, all while undermining the territory’s autonomy.”
“Those are risks the US refuses to accept and have resulted in the revocation of Hong Kong’s special status.”
He added that “further actions to eliminate differential treatment are also being evaluated. We urge Beijing to immediately reverse course and fulfill the promises it has made to the people of Hong Kong and the world.”
The US passed a law in 1992, five years before control of the then-British colony was handed over to China, that stipulated that the city would continue to be treated as a separate entity from the Asian country.
But amid a wave of pro-democracy protests and police repression last November in Hong Kong, Trump signed into law a bipartisan bill that requires the State Department to certify to the US Congress annually whether Hong Kong continues to warrant differential treatment.
In late May, US Secretary of State Mike Pompeo told US lawmakers that Hong Kong could no longer be considered autonomous from China, thus opening the door to the loss of its special status.
The revocation of that status has had immediate consequences, with Pompeo saying Monday that the US will immediately cease exporting defense equipment to Hong Kong.
“As Beijing moves forward with passing the national security law, the United States will today end exports of US-origin defense equipment and will take steps toward imposing the same restrictions on US defense and dual-use technologies to Hong Kong as it does for China,” the US State Department said in a statement.
“The United States is forced to take this action to protect US national security. We can no longer distinguish between the export of controlled items to Hong Kong or to mainland China.”
Pompeo said in the statement that the action was a “direct consequence of Beijing’s decision to violate its own commitments under the UN-registered Sino-British Joint Declaration of 1984. Our actions target the regime, not the Chinese people.”
Under that agreement, the United Kingdom and China agreed that the Asian country would resume control of Hong Kong in 1997 (after 156 years under British rule).
The declaration also established the maintenance for a period of 50 years of a series of liberties for the residents of Hong Kong that would have been unthinkable for people in mainland China.
Sources with the government in Beijing, however, have said on numerous occasions that that document signed 36 years ago served its purpose at the time but that the legal basis for the Chinese government’s administration of Hong Kong is the country’s constitution.
Tensions between the US and China have risen in recent months in part because of the coronavirus pandemic, whose origins are believed to be the Chinese city of Wuhan and which US President Donald Trump blames on Beijing.
Prior to the pandemic, Trump launched a trade war in 2018 aimed at addressing a massive trade deficit with China and US concerns about intellectual property protections and forced technology transfers.
But in January of this year the two countries signed a phase-one agreement that included partial rollbacks of some US tariffs and promises by Beijing to make large-scale purchases of US agricultural products and other goods.