The U.S. government on Friday warned of the "growing risks" businesses operating in Hong Kong could face as China tightens its grip on the former British colony under a newly enacted national security law, while imposing sanctions on seven Chinese officials.
"Hong Kong's business environment has deteriorated in the past year," Secretary of State Antony Blinken said in a statement, noting that Beijing's crackdown on democracy in the region has chipped away the region's reputation for "accountable, transparent governance and respect for individual freedoms."
Hong Kong's economic openness and freedom of expression, among other factors, have made the territory attractive to businesses around the world, helping it to flourish as an international financial hub. Hong Kong has also played a role as a fundraising conduit for Chinese firms.
But Blinken said, "The many legal, financial, operational, and reputational risks long present in mainland China are now increasingly prevalent in Hong Kong."
In a business advisory released by the state, treasury and two other departments, the U.S. government warned that many of the risks stem from the implementation of the national security law in Hong Kong, a move aimed at cracking down on what Beijing views as subversive activity in the territory.
The advisory stressed that foreign nationals, including one U.S. citizen, have been arrested under the law and explained that there would also be risks associated with electronic surveillance without warrants and the surrender of corporate and customer data to authorities.
Companies that rely on a free and open press may also face restricted access to information, it added.
The seven sanctioned officials, meanwhile, are deputy directors of China's Hong Kong liaison office, which, according to the State Department, is Beijing's "main platform for projecting its influence in Hong Kong and has repeatedly undermined the high degree of autonomy promised for Hong Kong."
Under China's "one country, two systems" policy, Hong Kong was promised it would enjoy the rights and freedoms of a semiautonomous region for 50 years after the former British colony's return to Chinese rule in 1997.
But China has been seen taking moves to undermine Hong Kong's autonomy and democracy, most notably by enacting what Washington has called the "draconian" national security law in June last year.
Under pressure from Chinese and Hong Kong authorities, Hong Kong's pro-democracy newspaper Apple Daily folded last month, leading U.S. President Joe Biden to issue a statement criticizing the "intensifying repression" by Beijing.
Before ending its 26-year history, the outspoken paper, which has long been a target of the authorities over its liberal stances, had its assets frozen and its senior editors and executives arrested under the sweeping law.
