August 14, 2022

President Joe Biden said his administration would issue a recommendation to warn American companies about the risks of doing business in Hong Kong as China intensifies its hold over the semi-autonomous region.

“The situation in Hong Kong is worsening. And the Chinese government is not keeping the promise it has made about how it would deal with Hong Kong,” said Biden on Thursday at a press conference with the visiting German Chancellor Angela Merkel.

“And so it’s more of an indication of what can happen in … Hong Kong. It’s so simple and so complicated, ”he added, according to a transcript of his White House statements.

Several news outlets reported that the notice will be released on Friday. The consultancy could go hand in hand with US sanctions against seven Chinese officials for cracking down on democracy in Hong Kong, Reuters reported, citing unnamed sources.

The situation in Hong Kong is deteriorating. And the Chinese government is not keeping its promise on how to deal with Hong Kong.

A major economic hub in Asia, Hong Kong has become a controversial issue in US-China relations, which have been shaken since a dispute over trade tariffs, technology competition and the origin of the Covid-19 pandemic.

The city is a former British colony that returned under Chinese rule in 1997. It is governed under a “one country, two systems” framework that promises Hong Kong a “high degree of autonomy”.

National Security Law Concerns

Read more about China from CNBC Pro

“In general, we want to ensure that companies can operate in a stable, predictable and fair regulatory environment around the world,” Price said at a press conference when asked about the Hong Kong business advisory service.

“And rule of law risks, which used to be confined to mainland China, are becoming increasingly worrying in Hong Kong. This is very important to us. It is very important to the American business community. ” he added.

The implementation of the national security law last year followed months of pro-democracy protests that sometimes turned violent. Chinese officials and state media often said “outside forces” were behind the protests in Hong Kong.

Beijing said the law aims to ban secession, undermining state power, terrorist activities and foreign interference.

More than 100 people were arrested in the first year after the law was implemented – many of them Democratic politicians, activists, journalists and students, Reuters reported last month. Hong Kong pro-democracy newspaper Apple Daily was forced to close after authorities legally frozen the company’s assets, leaving it with few resources to keep operations going.