US-China Confrontation AGAIN: Hong Kong is the Battlefield this Time

by Eli Mshomi
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The United States firms working overseas have come into the limelight once again with a new dimension in the US-China trade war, as the National Security law is imposed on Hong Kong by China.

The warning for the US companies operating in Hong Kong has raised eyebrows of the corporations already working in the country that have started confronting President Biden.

The United States believes that China’s increasing control over Hong Kong is a threat to foreign investors.

As the advisory committee is all set to issue a warning to the businesses in Hong Kong, this can open a new chapter in the trade war, with China taking countermeasures.

The Chinese spokesman for Foreign Affairs, Zhao Lijian, has already criticized the US ambitions.

Chinese spokesman for Foreign Affairs, Zhao Lijian, has already spoken against the US for its potential step of warning the US companies about doing business in Hong Kong

Chinese spokesman for Foreign Affairs, Zhao Lijian, has already spoken against the US for its potential step of warning the US companies about doing business in Hong Kong

National Security Law: Another Data War in Queue

The new National Security law

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would mean increased accessibility of servers in Hong Kong to China that could endanger the data of many companies working in the city.

As server centers have the sensitive information of the entirety of Hong Kong, as well as foreign firms and companies operating there, the United States does not want to leak any information to China.

Currently, more than 296 US companies are operating in Hong Kong, and according to the New National Security Law, Beijing now has the authority to impose sanctions or retaliate against individuals or organizations complying with anti-China sanctions.

Moreover, the People’s Republic of China (PRC) also has the right to investigate organizations in Hong Kong in the name of safeguarding China’s national security.

The experts say that the coming business advisory by the Joe Biden administration may follow the decision to roll back special trade privileges given to Hong Kong. It is pertinent to note here that this recognition was given to China over her promise to ensure Hong Kong’s autonomy.

Since taking over the White House, President Joe Biden met many state heads, including attending the G7 summit, but he has yet to talk with his Chinese counterpart, Xi Jinping, which signifies the strained relations between both countries.

The meeting of US Secretary of State Antony Blinken with Chinese authorities also did not go well.

The US China trade war has entered a new phase with the  involvement of Hong Kong in it

The US China trade war has entered a new phase with the involvement of Hong Kong in it

China Breaking International Law in Hong Kong: The US has much to Worry
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It is an established fact that all this tussle is a part of the US-China trade war.

The indirect war between these two economic giants has been escalating and harshening since 2018.

The US companies overseas are not very happy with this move. They have started equating Biden with his predecessor Donald Trump, proclaiming that silent diplomacy is better for businesses than face-to-face confrontation.

The history of the trade war suggests that these measures are often tit for tat and are prone to every sort of retaliation.

So, once again the global businesses are vulnerable to politics due to political interests.

This would come at a time when the global minimum taxation is already on the cards, and the US is seeking antitrust laws to break corporate giants.

Although the United States’ excessive jobs domestically have shown promising signs of economic recovery in post-COVID times, all of these factors combined can contribute to strain the ease of business index.

Hong Kong has one of the busiest ports in the world. The city remained part of the British colony for 150 years when China gave the city to Britishers on lease for 99 years.

Due to its strategic location and manufacturing economy, its port rapidly became one of the busiest ports in the world in the 1950s.

In 1988, when its lease period came near to end, the British and Chinese governments signed a pact that Hong Kong will become a part of China from 1997 onward under the “One country-Two system” doctrine.

In other words, Hong Kong will remain an “autonomous region” except for foreign and defense affairs till 2047.

 

Final Thoughts

As China emerged as the second-largest economy in the world, it found avenues to capture Hong Kong now with its controversial new law.

This is just the beginning of China’s rising influence over Hong Kong. With the passage of time, as 2047 nears, the tussle between the US and China would go to new heights if China tries to completely capture the city. 

Hence, in no time soon, the situation is expected to deescalate between the top two global economies.

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