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Monday, December 17, 2018, 10:57
HK-US relations still remain crucial
By Holden Chow
Monday, December 17, 2018, 10:57 By Holden Chow

Holden Chow says that despite the recent USCC report, the United States still acknowledges HK’s special trade status as a separate customs territory

Last week I attended a counter-terrorism and anti-money-laundering work conference in Washington at the invitation of US Congressman Robert Pittenger. Having met and spoken with officials of the US State Department responsible for Hong Kong affairs, I believe the US still greatly values its economic and trade relations with Hong Kong.

The US-China Economic and Security Review Commission (USCC), a congressional advisory body, issued its annual report earlier this year, alleging that Beijing is encroaching Hong Kong’s political institutions, rule of law and freedom of expression. The commission recommended that the US government review its policies that allow the export of dual-use technologies to Hong Kong, and assess whether it should continue to regard Hong Kong and the Chinese mainland as two separate customs territories.

Nevertheless, I did not hear from any State Department officials about having any intentions to alter Hong Kong’s special trade status as a separate customs territory under the “one country, two systems” arrangement. I learned from US officials that the aforementioned USCC report is not an official report of the US State Department. Hence, I believe that the Hong Kong community does not need to be over-concerned with it at this moment.

Having met and spoken with officials of the US State Department responsible for Hong Kong affairs, I believe the US still greatly values its economic and trade relations with Hong Kong

As a matter of fact, Hong Kong has maintained close economic and trade relations with the US. There are more than 1,300 US companies operating in Hong Kong, half of which are regional headquarters. There are currently more than 80,000 Americans employed in Hong Kong. The annual trade volume between the two places is as high as HK$500 billion. In 2016, Hong Kong’s service exports to the US accounted for 14 percent of its total service exports. Meanwhile, Hong Kong’s inward direct investment from the US stood at US$81.2 billion in 2017.

Both the representatives from the US State Department and I acknowledged the importance of Hong Kong enjoying the special trade status as a separate customs territory under “one country, two systems”. We all realized that Hong Kong’s special trade status benefits the two sides for they have extensive economic and trade ties.

I talked with some US business leaders during my visit to Washington. They expressed strong confidence in “one country, two systems” and that malicious rumors would not affect their investment activities in Hong Kong. I am fully convinced that many US legislators and business leaders recognize and have a high regard for Hong Kong’s internationally compatible institutions and systems under “one country, two systems”.

Some experts believe that even if Sino-US relations deteriorate, it would not affect Hong Kong’s significance to both parties if the old diplomatic wisdom still holds. The US needs Hong Kong as a window to the Chinese mainland as well as a platform for American companies to conduct financing activities. Of course, the strong economic and trade ties between the US and Hong Kong are also of great significance to the special administrative region.

The US and Hong Kong should reinforce their economic and trade ties to obtain mutual benefits. Nonetheless, Hong Kong must also brace for the worse. Some economists predict that the Sino-US trade conflict could have a negative impact on Hong Kong that may last for 20 to 30 years. The SAR government must pay close attention to the latest developments in Sino-US trade tensions and formulate appropriate strategies and measures to cope with the situation in a timely manner.

The article is translated from an article published in Hong Kong Commercial Daily on Dec 13.

The author is a member of the Legislative Council.


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