The US President Donald Trump said he would revoke the special status of Hong Kong, in response to the passing of the national security law on Hong Kong in Beijing. “It is one country, one system. This is a tragedy for Hong Kong”, said the President. The US will impose sanctions against some top officials in Hong Kong and China responsible for the erosion of Hong Kong autonomy.
Why is the special status so “special”?
Though Hong Kong now is a part of China as a “Special Administrative Region” (SAR), this former British colony is treated separately in customs. It means Hong Kong is free of tariff, quota and export controls on China. Furthermore, the high degree of autonomy is the requirement to join the WTO as an individual member to enjoy free trades. It is somehow the supports of Hong Kong international business viability. Freedom is the successful reason of Hong Kong as an Asian global business hub.
Possible impact on Hong Kong economy
Hong Kong acts the role of gateway for China nowadays. If Hong Kong becomes just a normal Chinese city, the trade activities will go directly between any Chinese cities and the world with a higher tariff. More seriously, international institutions and investors may consider to leave. It is because the very first reason for them to come is the uniqueness of Hong Kong.
Storm of unprecedented ferocity
The independence of judiciary is one of the reasons why Hong Kong is a trustworthy place to invest. Justice Kemal Bokhary warned of a “storm of unprecedented ferocity” that threatened the judicial autonomy of Hong Kong when he retired in 2012. The impact extends not only to judiciary but also socio-economic aspect and the city as a whole.
The BUD Fund targets on mainland China and Free Trade Agreement regions. The recent storm inevitably impacts business and trading with these regions in a long run. BizMagnet will keep an eye on it and walks with Hong Kong people.