Joe Biden’s administration is poised to warn US companies of the rising risks of operating in Hong Kong as China asserts more control over the financial hub.
According to three people familiar with the plan, the state department will this week flag concerns about a range of threats, including China’s ability to obtain data that foreign companies store in Hong Kong.
It will also point to the risk of a new law allowing Beijing to impose sanctions against anyone enabling foreign penalties to be implemented against Chinese groups and officials.
The move, which the sources said would probably come on Friday, is the first time the US has issued a business advisory in relation to Hong Kong.
One of the people familiar with the matter said there had been dissent within the administration, with some officials concerned the warning would discourage US companies from operating in a critical financial centre. But more hawkish officials argued successfully that American companies needed to better grasp the nature of the risks.
The warning will mention recent events such as the forced closure of Apple Daily, the pro-democracy tabloid newspaper owned by Jimmy Lai. The US president may also impose more sanctions against Chinese officials in Hong Kong, according to a person familiar with the discussions.
In addition, the White House is considering a policy that will allow Hong Kong citizens in the US to remain after their visas expire if they face potential political persecution in Hong Kong.
But that measure is being debated and is not expected to be part of the package of actions to be announced this week.
The warning will reverberate in the sizeable US business community in Hong Kong. The American Chamber of Commerce in the city has more than 1,200 members and 282 US companies based regional headquarters there in 2020.
US companies have been unnerved about the passage of a national security law a year ago, partly because it would allow Beijing to access data stored on servers in Hong Kong. More recently, companies have become alarmed by the possibility that China could apply the counter-sanctions law, which allows for the seizure of assets, in Hong Kong.
While a decision on whether to provide asylum to Hong Kong citizens in the US had not been finalised, any such development would anger Beijing, which is hostile to foreign governments such as the UK and Canada offering shelter to those escaping political persecution.
Beijing has not prevented Hong Kong residents from taking up the British National (Overseas) visa programme, but it has made it harder for those who do so to redeem their retirement savings.
The White House and state department declined to comment on the imminent actions in relation to Hong Kong.
On Tuesday, the Biden administration updated a warning that the Trump administration issued on Xinjiang last year. The business advisory stressed the legal risks that US companies faced unless they ensured their supply chains did not use forced labour in Xinjiang.
It also warned companies that they faced potential criminal and civil enforcement actions if they undertook activities that helped China to conduct surveillance in Xinjiang.
The decision was driven partly by the view that companies were not taking the issue seriously enough.
“The point of the advisory is to stress [that] if you do not exit these supply chains you run a risk of violating US law,” a US official told the Financial Times. “The business community . . . need to be aware of reputational, economic and legal risk of their involvement with entities involved in human rights abuses.”
The Chinese foreign ministry said the US moves were “typical double standards” and that using Xinjiang as leverage was “doomed to fail”.
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