Biden warns US companies of the dangers of operating in Hong Kong Business and Economic News

The U.S. will warn American companies this week that the risks of operating in Hong Kong are growing, with three friends familiar with the matter, saying Washington wants to increase pressure on Beijing as a result of its crackdown on the financial center.

Among those risks are the ability of the Chinese government to access data stored by foreign companies in Hong Kong, two of the people confirmed. People have said that for the first time the warning reported by the Financial Times will come in the form of business advice.

This alert from President Joe Biden’s administration would underscore how Washington’s concerns about the former British colony have escalated since Beijing began cracking down on local democracy demonstrations in 2019.

A fourth U.S. official mentioned that the national security measure approved last year is detrimental to the rule of law, which will allow employers to move forward in Hong Kong. U.S. officials say the law has weakened the border between China and Hong Kong, which has been ruled as a “Special Administrative Region” with a separate system of government and economy since it was handed over to the British colony in 1997.

The U.S. is also concerned about a new law that would allow revenge for anyone serving Beijing sanctions against China, people said. The White House declined to comment on the matter.

The U.S. business advisory note said last year the Trump administration would take a decision to revoke the special trade privileges granted to Hong Kong, in line with China’s promise to ensure a “high degree of autonomy” from Beijing.

Ties between the US and China had already been tightened, including tariffs and the origins of the Covid-19 pandemic, when Biden took office in January. Relations have been strained since then, and while Biden has met with counterparts from all over Europe, Russia, Japan and South Korea, he and his Chinese President Xi Jinping have not yet reunited.

The U.S. president is expected to attend a virtual meeting of the Asia-Pacific Economic Cooperation Forum on Friday, of which China is a member. Earlier this month, Undersecretary of State Wendy Sherman plans to travel to Beijing, according to two people who know her intentions. Biden and Xi can meet face to face when 20 teams meet in Rome in late October.

Despite the erosion of ties between the world’s two largest economies, trade between the US and China has continued, driven by consumer spending on the recovery from the pandemic.

Trade data

Chinese data show that the country’s exports of goods to the U.S. are on a high pace this year, while U.S. data show a rate above 2020 but below previous years. Meanwhile, shipments to the U.S. from China are at or near record levels.

In response to reports released on Tuesday, the Chinese Foreign Ministry has expressed its opposition to the US intervention in Hong Kong matters. Ministry spokesman Zhao Lijian told reporters that the city has been more stable under the security law.

These statements warned US companies about the dangers of supply chain links to the Xinjiang region that appeared before the U.S. updated its business advice, where China has denounced numerous human rights violations against Uighurs.

“The United States will continue to promote responsibility for the PRC’s atrocities and other abuses through a government-wide effort and in close coordination with the private sector and our allies and partners,” Secretary of State Antony Blink said in a statement to the People’s Republic of China.

Adding to the growing tensions, China on Tuesday denounced Finance Secretary Janet Yell’s appeal against China to achieve a “united front”.

During a visit to Brussels earlier in the week, Yellen heard again about the cooperation built after World War II and the “international order based on rules” – he said before calling the three countries he put the order in jeopardy.

“Together, we must address threats to the principles of openness, fair competition, transparency and accountability,” Yellen said in remarks he plans to deliver to EU finance ministers on Monday.

“These challenges include China’s unfair economic practices, misbehavior and human rights violations; the abuses of the Lukashenko regime in Belarus;

“China strongly deplores and rejects Secretary of Finance Yellen’s remarks,” Zhaok said at a news conference in Beijing on Tuesday.

According to people familiar with the new plans, it was when White House officials discussed proposals for a digital trade agreement covering the Indo-Pacific economy.

Details of a potential trade deal – part of the Biden administration’s efforts to verify China’s impact on the region – are still being drafted, but the treaties may include countries such as Australia, Canada, Chile, Japan, Malaysia, New Zealand and Singapore. According to one people, he asked that the process not be identified because it is not public.