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Change in Hong Kong’s Security Law Undermines China & US Relations
July 05, 2020
This week, a Chinese national security law targeting subversive activity in Hong Kong went into effect. The consensus among most governments was that it violates the autonomy Hong Kong was granted when the territory was transferred from British rule to Chinese rule in 1997. Police arrested hundreds of protesters on Wednesday, the first day the law became active.
The biz fallout: Hong Kong’ role as an international hub for trade, finance, and multinational HQs could spook those companies and threaten HK’s economic relationship with the rest of the world. The U.S. has begun to roll back its special trade status with Hong Kong and is stopping defense exports. Lawmakers are preparing to introduce legislation that bans certain Chinese companies from accessing U.S. capital markets. Amidst escalating geopolitical tensions, Chinese smartphone makers are putting their immediate manufacturing-related investments on hold, given the uncertain business environment. The banning of 59 Chinese apps have made them even more nervous, with some wondering if they will be the next target in India. Major smartphone investors such as OPPO and vivo have not registered for India’s ambitious production-linked incentive (PLI) scheme for manufacturing, even though the likes of Apple phone makers Foxconn and Wistron, besides local manufacturers such as Dixon, Lava are lined up.
Bottom line: From the coronavirus to allegations of Chinese human rights abuses against Uighur Muslims, the U.S. has taken a harder tack against China. This new HK law drives a further wedge between the two economic powers. From: Morning Brew
July 05, 2020
This week, a Chinese national security law targeting subversive activity in Hong Kong went into effect. The consensus among most governments was that it violates the autonomy Hong Kong was granted when the territory was transferred from British rule to Chinese rule in 1997. Police arrested hundreds of protesters on Wednesday, the first day the law became active.
The biz fallout: Hong Kong’ role as an international hub for trade, finance, and multinational HQs could spook those companies and threaten HK’s economic relationship with the rest of the world. The U.S. has begun to roll back its special trade status with Hong Kong and is stopping defense exports. Lawmakers are preparing to introduce legislation that bans certain Chinese companies from accessing U.S. capital markets. Amidst escalating geopolitical tensions, Chinese smartphone makers are putting their immediate manufacturing-related investments on hold, given the uncertain business environment. The banning of 59 Chinese apps have made them even more nervous, with some wondering if they will be the next target in India. Major smartphone investors such as OPPO and vivo have not registered for India’s ambitious production-linked incentive (PLI) scheme for manufacturing, even though the likes of Apple phone makers Foxconn and Wistron, besides local manufacturers such as Dixon, Lava are lined up.
Bottom line: From the coronavirus to allegations of Chinese human rights abuses against Uighur Muslims, the U.S. has taken a harder tack against China. This new HK law drives a further wedge between the two economic powers. From: Morning Brew
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