In 2020, as Hong Kong’s political crisis heated up, the Trump administration issued sanctions and other financial controls related to the city and its leaders. Although launched to put financial and political pressure on Hong Kong and Beijing, America’s sanctions and export controls have done little to affect the city’s exceptional financial status. Very few firms have left or even downsized in Hong Kong since former Secretary of State Mike Pompeo declared that Hong Kong can no longer be considered sufficiently autonomous from Beijing. Companies more sensitive to the political and financial turmoil of the past year have simply diversified operations, moving a small amount of staff to Singapore. The Motley Fool closed its operations in Hong Kong, though some have argued it was due to low revenue even prior to increased US-China tensions.
If anything, the most affected sector in Hong Kong has been the news industry. The New York Times, citing the passage of the national security law, announced last year that it would relocate some Hong Kong operations to Seoul, Korea. Yet it is unknown whether this shift in operations occurred. As of now, it appears no multinational company with a significant presence in Hong Kong has left or even downsized as a result of America’s political and financial pressures.
Hong Kong’s ability to remain a financial hub for China comes despite the efforts of two administrations to emphasize the risks of business with China, especially during the events of 2020. Even as recently as July 2021, the Biden administration warned American businesses about the financial and political risks of doing business in Hong Kong.
In retrospect, however, the American moves of 2020 shouldn’t have been expected to have changed much in Hong Kong.
From January to August 2021, the United States was China's top export market, importing $51.7 billion worth of goods in total just in August. US trade with China totaled approximately $560 billion in 2020. The fact is, the United States has a strong trade relationship with China. Whether the United States should have a massive trade relationship with an adversarial country is another matter, but at the moment the United States is certainly pursuing a strategy of mutually beneficial trade alongside aggressive competition. From a business perspective, a little bit of turmoil in Hong Kong will not derail a relationship that has already endured a few significant bumps. Practically speaking, if Hong Kong is no longer independent from China, it will naturally resemble China-- politically censored but very much open for business, especially with America. With Hong Kong considered part of China, business goes on. Hong Kong is no longer China’s golden egg, and hasn’t been for quite some time.
Despite all this, America’s financial pressure on Hong Kong has at least partially tied the Chinese Communist Party’s (CCP) hands. Erza Cheung, a Hong Kong-based journalist, reported that Beijing has “shelved” its intention to implement an anti-foreign sanctions law in Hong Kong because it would “impact the city’s business sector and hence its status as an international financial centre.” Any Chinese moves to financially retaliate in Hong Kong would place the responsibility on the CCP rather than the United States. Even so, given the response from business so far, it is unlikely that Hong Kong would be significantly affected by the passage of the anti-foreign sanctions law.
In a post in The National Interest, Ted Galen Carpenter wrote, “Americans wanting to express solidarity with Hong Kong also must face the reality that there is not much of substance the United States can do without incurring totally unacceptable risks.” So far, that assessment appears accurate.
Cover image obtained from https://www.bostonglobe.com/2020/06/02/opinion/open-americas-doors-refugees-hong-kong/ via NG HAN GUAN/ASSOCIATED PRESS