China's assumption of control over Hong Kong and loss of its autonomy may result in sanctions for the former British colony.
According to the Trump administration that has made the decision through the US Congress on Wednesday, it determined that Hong Kong is lost due to Chinese actions. Determining at this point, if Hong Kong still gets the economic and trade status from the US, SCMP reports.
Mike Pompeo, US Secretary of State, said that the events in Hong Kong are an indication of the loss of autonomy because of Beijing. The reality is here but policymaking needs to be grounded.
Whatever is the judgment of the state department on the status of Hong Kong will not lead to the next stage. The next decision will fall on the US President who will now consider how severe the sanctions will be on the former colony. Other policies will also be given as a result of China's action.
The CNBC reports that Pompeo expressed regret over the developments in Hong Kong and was hoping that the former colony would be the templated for the CCP to emulate, but China is making all territories under its thumb like itself.
With the Hong Kong Human Rights and Democracy Act passed by the US legislature last November, it demands an annual review if Hong Kong is separate from China.
This will be the measure if Hong Kong deserves the special status accorded by the United States.
Depending on the ways and means that the Trump Administration makes its decision, it is largely on how Beijing will react to US actions. For example, if China puts higher tariffs, investment rules, frozen assets and also visa rules as well.
Bonnie Glaser, director of the China Power Project at the Centre for Strategic and International Studies, said that the US will most likely sanction individuals and entities who are attacking the autonomy of Hong Kong. Next will be the sanctions on banks who deal with those violating Hong Kong's autonomy, Yahoo reports.
According to Nicholas Lardy, stating the warning to the change of the former British colonies status will affect most companies that are based there. Another is the effect it has on the economy of Hong Kong that will be affected negatively, while mainland China prospers more.
China's foreign ministry office in Hong Kong issued a statement saying that Washington's move was uncalled for on May 28. They called the US as barbaric for making a decision that was anti-Hong Kong.
According to the Chinese, the law allowed to pass in US legislature for the continuance of Hong Kong's pro-democracy sector, and the US must certify if Hong Kong will be the recipient of what was promised to Britain when it reverted to Chinese hands, reported by ChannelNewsAsia.
With the US administrations pulling back of these privileges, Hong Kong will be paying more for US trade.