HK autonomy bill points gun at UK, US banking giants

Global Times

The US House’s passage of a bill sanctioning banks doing businesses with Chinese officials, the latest bluffing response to China’s implementation of the national security law for Hong Kong, is only a piece of waste paper, and the US knows deeply that it can achieve nothing in shaking China’s determination to push forward the law, Chinese analysts said.

The US House of Representatives passed the Hong Kong Autonomy Bill on Wednesday by unanimous consent, which would impose sanctions on foreign individuals and entities that materially contribute to China’s “failure to preserve Hong Kong’s autonomy,” and would allow the US president to impose property-blocking sanctions on an individual or entity, visa-blocking sanctions on a named individual and prohibit a financial institution from receiving loans from a US financial institution.

China firmly opposed the US House’s passage of the bill and urged the US to stop advancing the negative bill, otherwise, China will resolutely counter it, and the US should bear all the consequences, Zhao Lijian, spokesperson of the Chinese Foreign Ministry, said on Thursday’s routine press briefing.

The Foreign Affairs Committee of the National People’s Congress (NPC), China’s national legislature, on Thursday voiced strong condemnation of and firm opposition to the passage of the bill, and said the US’move has grossly interfered in China’s internal affairs.

The US bill is merely “bluffing rather than biting,” Chinese analysts said, with some comparing it to a piece of waste paper on the damage it could do to China.

It is likely that the US will first publish the list of Chinese officials whom they claimed are involved in the national security law legislation, and only banks which continue to do business with those officials afterward would be “fined,” Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Thursday.

An anonymous expert close to a central government agency predicted that less than 10 Chinese officials and entities may be put on the list, including prominent figures in pro-establishment camps in Hong Kong as well as senior officials from the Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region (HKSAR) and officials from the newly established Office for Safeguarding National Security of the central government in the HKSAR.

Also, executives of some Chinese mainland-based financial institutions and state-owned enterprises may also be on the list, the expert noted.

“Most Chinese officials are not businessmen and their needs for financial services are very limited. So the effect of the restrictive US bill is very marginal,” Mei Xinyun, an expert close to China’s Ministry of Commerce, told the Global Times on Thursday.

Instead of depositing savings in foreign financial institutions, Mei suggested those officials could open accounts in banks based in the Chinese mainland – which are more immune to US sanctions compared to their foreign counterparts.

“Chinese banks will probably not yield to US bullying as they could complete fundraising in the Chinese mainland,” Mei explained.

Shen Yi, a professor at the School of International Relations and Public Affairs at Fudan University in Shanghai, told the Global Times on Wednesday that the US dares not to take concrete steps in sanctioning China, and the new bill and even their possible follow-up measures will only be a show to its domestic residents for the purpose of the presidential campaign.

“If the US government was being real on the Hong Kong sanctions, it would be like putting a gun to its own head, and the US knows that,” Shen said.

Shen said if the US means what it said, it would have firmly revoked the special status of Hong Kong and withdrawn all of its firms from Hong Kong, but “it cannot even touch any of these.”

“The Trump administration is now facing a dilemma on Hong Kong issues: On the one hand, it needs to take actions to maintain its dignity on the global stage. But on the other, there is no such way to ‘sanction’ China without hurting itself. The White House is running out of cards except verbally attacking China,” Gao noted.

Foreign firms stuck in limbo
Mei said that the US legislation could further sink the credibility of certain foreign financial institutions, in particular US ones.

“In light of the detention of Meng Wanzhou during which the London-headquartered bank HSBC played an important role in the relentless US crackdown on the Chinese tech company Huawei, we learn how financial institutions could serve as attack dogs for US government plots. So the legislation is more like raising the alert for the world to be careful in doing business with US banks,” Mei noted.

In June, HSBC announced mass layoffs of 35,000 jobs and froze almost all external hiring, after it was exposed to have had colluded with the US in its crackdown on Huawei that led to the arrest of Meng Wanzhou, Huawei’s Chief Financial Officer. Analysts said US and UK corporate giants, including HSBC, are caught in the crossfire between China and several Western nations on a wide range of issues and it is likely that they could be “in the fire” for a prolonged period, which dents their business prospects.

As Meng’s case is subject to prolonged judicial procedures and hangs in limbo, the new US legislation could further ramp up pressure on the embattled British bank, a Beijing-based market watcher surnamed Shen told the Global Times on Thursday.

“HSBC as well as other financial institutions should separate politics from business and think twice before taking action. Kneeling to US hegemony may only spell an end to their businesses in the Chinese market,” Shen noted.

Foreign banks and financial institutions will not be scared away, by the bill, from doing businesses in Hong Kong or the Chinese mainland, as what they really care about is profit rather than politics, Shen Yi said.

Hong Kong’s benchmark the Hang Seng Index was unshaken by the bill, showing that foreign financial institutions are confident about Hong Kong, he said.

The Hang Seng Index closed 2.85 percent higher on Thursday, the first trading day after the national security law for Hong Kong took effect in the city.

The UK is the other spearhead in attacking the national security law for Hong Kong. It has claimed several times to extend residency rights and a path to citizenship for up to 3 million people in Hong Kong.

On Wednesday, the spokesperson for UK Prime Minister Boris Johnson said that Britain will continue to have a constructive relationship with Chinese companies working and investing in the country, but the strong ties between London and Beijing do not come at any price.

Britain frequently used the Sino-British Joint Declaration as an excuse to interfere in Hong Kong’s internal affairs, but China has reiterated that the declaration does not contain any words or clauses that entrust the UK with any responsibility for Hong Kong after its return to China in 1997, and the UK has “no sovereignty, governance or supervision over Hong Kong”.

Britain just wants to save face and indulge itself in old imperial dreams of being the suzerainty over Hong Kong although it is fully aware that it cannot change anything, Shen said.

To the UK, it seems that it believed what it said equals to what it did, Shen Yi said.

The international status of this old imperial country has declined so much that it has to use the global headline of Hong Kong affairs to prove its existence, and this is so ridiculous, Chinese analysts said.

“I don’t think other countries have any right to interfere in Hong Kong affairs, which have nothing to do with them,” NPC standing committee member Tam Yiu-chung told the Global Times.

As countries like the US all have their own national security laws, why are they unsatisfied with the Chinese government coming up with its own law to protect the “one country, two systems,” within which “one country” always comes first? the official noted.

Experts said all these reactions from countries like the UK and US have been within China’s anticipations and will not shake the nation’s determination in safeguarding national security in Hong Kong