SAR trade status 'tied to WTO - not America'

Top News | Mandy Zheng 5 Jun 2020

Hong Kong's independent trade status originates from World Trade Organization agreements and the United States would harm its own interests by revoking it, says the commerce ministry.

Spokesman Gao Feng said yesterday that the SAR's status is not granted solely by any particular WTO member, referring to the United States.

"The special economic status of Hong Kong is protected by the Basic Law and recognized and respected by countries all over the world," Gao said.

"If the United States ignores the basic principles of international relations and takes one-sided measures based on its internal law, then the country will violate the rules of the WTO and go against its own interests."

Gao said China vows to oppose "any foreign forces interfering with Hong Kong issues," while sustaining the SAR's core position in international finance, trade and shipping.

Washington announced last week that it plans to end its special relationship with Hong Kong, scrapping the SAR's various trade and business privileges.

Echoing Gao's comments, Financial Secretary Paul Chan Mo-po told state media China Global Television Network that US sanctions on the SAR would hurt America more.

"The US has very substantial business interests in Hong Kong," Chan said.

"So I will urge them in contemplating any action against Hong Kong, to evaluate not just the impact on Hong Kong, but also the impact on themselves."

He added that the United States has registered successive trade surpluses with the city in recent years and also relies heavily on its financial services.

According to Chan, local bankers and other professionals in the finance sector have given him "positive response" overall to the national security law.

However, some global companies are considering moving part of their treasury operations out of the SAR following Trump's decision, according to senior bankers in the city. With Hong Kong's status as a financial hub increasingly under threat, firms could move part of their operations to countries such as Singapore, Malaysia and Thailand.

Some enterprises are worried that the city's zero tariff rates on US imports could be at risk, as well as a possible scenario that Hong Kong goods would be subject to the same - higher - rates paid by mainland companies, which could affect trade flows.

In Beijing, Gao said China has not seen any wave of foreign investors retreating from the country, or industry and supply chains relocating.

"In contrast, we noticed that a lot of multinational enterprises are considering expanding their industry chain in China based on factors like its stable business environment and potential in domestic demand," Gao added.

Separately, Executive Council member Regina Ip Lau Suk-yee said the national security law should be drafted in accordance with common law principles.

"When it's legislated in the future, [officials] must listen to experts in Hong Kong on how to define subversion and secession of the country," Ip said.

She said its mainland equivalent offers no clear definition of such crimes.

mandy.zheng@singtaonewscorp.com

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