US to impose Sanctions on China over its Hong Kong Law
On June 26, 2020, the US Senate approved the bill unanimously to impose sanctions on individuals and business that are undermining the autonomy of Hong Kong.
What is the issue?
China recently imposed a strict National Security Law on Hong Kong. According to the law, China took over the defence and external affairs of Hong Kong. Also, the law allows National Security Organs of China to set up institutions in Hong Kong and operate formally.
The US Law
The approved bill of the United States targets police units that cracked down Chinese Communist Party officials and Hong Kong protestors for imposing national security law.
Hong Kong has its own economic and governing systems within China.
Concerns of US
The new law of China will eliminate full range of agreements that gave Hong Kong a relationship with the US. This includes exemptions from control on exports. US lags similar relation with China and hence sees Hong Kong as a gateway to China. Also, US enjoys trade surplus with Hong Kong and trade deficit with china. The trade between US and Hong Kong stands at 23.3 billion USD. US enjoys a trade surplus of 2.3 billion USD with Hong Kong.
Economic Interests of US
US sees Hong Kong as a gateway to the mainland of China, especially for investment and businesses. Around 1,300 US firms are based in Hong Kong. Hong Kong is a re-export hub for the trade between US and China.
Hong Kong was rated the freest in the world between 1995 and 2019. Around 200 banks hold their headquarters in Hong Kong. This includes 75 of the 100 largest banks in the world from 35 different economies.
Month: Current Affairs - June, 2020
Category: International Current Affairs