The U.S. government has made a statement in support of Hong Kong pro-democracy protesters, to the dismay of China’s leaders. Legislation passed by Congress, with only a single dissenting vote, and signed by President Donald Trump amends the United States-Hong Kong Policy Act of 1992, under which the U.S. treats Hong Kong differently than the mainland in trade, commerce and other areas. Rescinding its “special status” would effectively mean treating the Asian financial hub no differently than any other Chinese city, a seismic shift.

1. Is the special status being rescinded?

Congress hasn’t gone that far, and Trump, who has always had the power to suspend it with an executive order, has said nothing to suggest that’s on the table. Instead, the law, S. 1838, requires the U.S. secretary of state to certify -- as part of an annual report report to Congress -- whether Hong Kong remains “sufficiently autonomous” from Beijing to justify its unique treatment under U.S. law. That includes assessing the degree to which Hong Kong’s autonomy had been eroded by the government of China. (Hong Kong is part of China but has a different legal and economic system, a holdover from its time as a British colony.) The law also provides for sanctions against officials deemed responsible for human rights abuses or undermining the city’s autonomy.

2. What’s the impact?

Trump also signed a second bill, S. 2710, that bans the export of crowd-control items such as tear gas and rubber bullets to Hong Kong for a year. But aside from that, it’s unlikely the U.S. government will invoke any of the powers in the near future. In his signing statement, Trump signaled concerns with “certain provisions” of the new law, saying they risked interfering with his constitutional authority to carry out U.S. foreign policy. Asked if Trump was referring to the sanctions, a senior administration official said the statement was drafted with all of the bill’s provisions in mind. Earlier, Trump had called the unrest in Hong Kong “a complicating factor” in clinching a trade deal with China.

3. What would losing it mean for Hong Kong?

An estimated $38 billion in trade between Hong Kong and the U.S. could be jeopardized. “Longer term, people might have a second thought about raising money or doing business in Hong Kong,” said Kevin Lai, chief economist for Asia excluding Japan at Daiwa Capital Markets. It would be “the nuclear option” and “the beginning of the death of Hong Kong as we know it,” said Steve Tsang, director of the University of London’s SOAS China Institute.

4. What about for the U.S.?

It has its own reasons for not rocking the boat too much. Hong Kong, the only semi-democratic jurisdiction under Chinese rule, offers U.S. companies a relatively safe way to access the Chinese market and employs a U.S. dollar peg, linking it with the American financial system. According to the Congressional Research Service, the largest U.S. trade surplus in 2018 was with Hong Kong — $31.1 billion. Some 290 U.S. companies had regional headquarters in the city that year and another 434 had regional offices, it said. Hong Kong’s first justice minister after the handover to China in 1997, Elsie Leung, told the South China Morning Post in May that any damage would be mutual: “We are not just getting the benefits – it’s a free-trade arrangement which is good for both sides.”

5. And more broadly?

The law introduces more uncertainty into the relationship between the U.S. and China, strained by an ongoing trade war, the Hong Kong protests and other issues. In addition to the annual review of Hong Kong’s trading status, the measure requires the president to freeze U.S.-based assets of, and deny entry to the U.S. by, any individuals found responsible for abducting and torturing human rights activists in Hong Kong. Such sanctions could come sooner than a suspension of the trading status. If it were to happen, it would obviously complicate things further.

6. How autonomous is Hong Kong?

When Britain handed Hong Kong back to China, the Chinese government pledged that the city would have a “high degree of autonomy” in its legal and economic affairs for 50 years, under an arrangement known as “one country, two systems.” The 2019 U.S. report on conditions in Hong Kong said the city’s autonomy was “sufficient -- although diminished.” After the protests erupted in June, the State Department said that “continued erosion” of Hong Kong’s autonomy put its “long-established status in international affairs” at risk.

7. How has China responded?

China said it would sanction some U.S.-based activist groups including the National Endowment for Democracy, Human Rights Watch and Freedom House, as well as suspend port visits by U.S. Navy ships to Hong Kong. “China urges the U.S. side to correct its mistakes and stop any words and deeds that interfere in Hong Kong affairs and China’s internal politics,” Chinese Foreign Ministry spokeswoman Hua Chunying said. The official Xinhua News Agency has dismissed as “groundless” accusations about the loss of freedom or human rights issues in Hong Kong. It also noted that the 2018 Human Freedom Index compiled by the Fraser Institute, a Vancouver-based think tank, ranked Hong Kong at No. 3, well ahead of the U.S. at No. 17.

8. And Hong Kong?

The city’s leader, Chief Executive Carrie Lam, has said it would be “totally unacceptable” for foreign legislatures to interfere in Hong Kong’s internal affairs, and that sanctions would only complicate the problems in the city. (Lam was selected in 2017 by a committee of 1,200 political insiders overwhelmingly loyal to the Chinese government.) She has sought to reassure investors that the city still adheres to the rule of law and has an independent judiciary. She also has defended police actions.

9. Is this what the protesters have been seeking?

As a largely leaderless movement, the Hong Kong protests have made no official request for international assistance. But some prominent Hong Kong pro-democracy activists including Joshua Wong had testified in Washington in favor of the bill, seeking to put pressure on China. On the streets of Hong Kong, some protesters have made clear their interest in U.S. support by waving American flags, singing “The Star-Spangled Banner” and calling on Trump to “liberate” Hong Kong.

--With assistance from Josh Wingrove and Alfred Liu.

To contact the reporters on this story: Iain Marlow in Hong Kong at;Daniel Flatley in Washington at

To contact the editors responsible for this story: Daniel Ten Kate at;Jodi Schneider at

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