Once lauded as an oasis of predictability in Asia, Hong Kong is plunged into crisis, threatening its status as a reliable world-class business center.
Beijing's tough new security law and President Donald Trump's order to rescind special trading privileges have blunted Hong Kong's competitive edge and risk turning the finance hub into just another Chinese city, analysts warn.
Then on Tuesday, July 14 – in response to that law – Trump announced that Hong Kong would no longer have preferential trade treatment. "This turned out to be much more wide-ranging and less targeted than I hoped it would be – and it looks like Hong Kong will suffer as much as mainland China," Steve Tsang, director of the SOAS China Institute in London, told Agence France-Presse .The order ends preferential treatment for Hong Kong passports, revokes license exceptions for certain exports, suspends Washington's extradition agreement with the city, and stops any joint police training.
Banks have a yearlong grace period to stop doing business with Chinese officials deemed to be"primary offenders" in undermining Hong Kong's autonomy. "This will have a devastating impact on Hong Kong as the financial gateway to Western markets and will also, by necessity, raise the profile of mainland Chinese markets for international firms and governments looking to finance global supply chains out of Asia," she added.
Since Beijing's national security law was first publicly mooted in late May the Hang Seng index has risen more than 10%, aided by an influx of mainland investment.
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