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International relations

Hong Kong law draws global outrage and split response to sanctions

Japan and Europe balk at US hard line against China

"The purpose of this brutal, sweeping law is to frighten, intimidate and suppress Hong Kongers who are peacefully demanding the freedoms that were promised," U.S. House Speaker Nancy Pelosi said in June 30 statement condemning the passage of the national security law.   © Reuters

WASHINGTON/BRUSSELS -- China's passage Tuesday of national security legislation for Hong Kong drew international condemnation, but Europe and Japan did not join the U.S. push for sanctions, testing their unity against an increasingly emboldened Beijing.

"As Beijing now treats Hong Kong as 'One Country, One System,' so must the United States," U.S. National Security Council spokesman John Ullyot said in a statement.

"We urge Beijing to immediately reverse course," he said.

House Speaker Nancy Pelosi was equally blunt. "Beijing's so-called 'national security' law -- passed on the eve of the 23rd anniversary of the handover of Hong Kong from the United Kingdom to China -- signals the death of the 'one country, two systems' principle," the Democrat said in a statement.

China hawks in Congress issued statements condemning the move.

"Xi Jinping and his Communist thugs must face severe consequences for crushing Hong Kong's freedoms," said Sen. Tom Cotton, an Arkansas lawmaker from President Donald Trump's Republican Party.

"The administration should consider all options at its disposal to deny Beijing the benefits of Hong Kong's special financial and economic status," Cotton said. "We cannot ignore China's draconian actions."

Republican Sen. Marco Rubio of Florida tweeted: "Now that #China has codified suppression of democracy in #HongKong it's only a matter of hours/days before they arrest high profile democracy activists to send a message to potential dissenters. Sadly, HK is no longer a safe place for business either."

Republican Sen. Josh Hawley of Missouri called it a "sad day" for Hong Kong and the world. "Question now is whether Beijing will use this as a pretext to jail pro-democracy leaders," he tweeted. "US must stay vigilant and be prepared to impose further sanctions/punitive measures."

Already embroiled in a trade war with China, the U.S. has pledged to respond in action. U.S. Secretary of State Mike Pompeo announced on Monday a halt to exports of defense equipment to Hong Kong and plans to impose the same restrictions as those already placed on exports to mainland China of technologies with military applications.

"The United States is reviewing other authorities and will take additional measures to reflect the reality on the ground in Hong Kong," he said.

This follows last week's move to restrict visas for Chinese Communist Party officials accused of undermining Hong Kong's autonomy under the "one country, two systems" framework.

None of these measures will do much in and of themselves. The trade rules cover 1.2% of U.S. exports to Hong Kong in 2018, and the visa restrictions are mainly symbolic. Washington is keeping its big guns in reserve.

Among the most serious potential responses would be limiting the free exchange of Hong Kong and U.S. dollars, a linchpin of the Hong Kong currency's peg to the greenback. That would do immense damage to the territory's economy, as well as harm American financial institutions operating there.

American lawmakers have worked on a bill that could eventually delist Chinese businesses from U.S. stock exchanges and a separate measure that would impose sanctions on foreign financial institutions that deal with Chinese officials who erode Hong Kong's autonomy. These could have a broad impact on Chinese companies' access to capital and the operations of foreign businesses operating in Hong Kong.

The bills must be approved by both chambers of Congress and signed by Trump. Trump will need to consider the potential impact on the China trade deal, an achievement he wants to play up in the run-up to the presidential election in November.

Japan and the European Union, meanwhile, strongly objected to the security legislation but are not currently considering sanctions.

Japanese Foreign Minister Toshimitsu Motegi issued a statement Tuesday expressing Japan's "regret" over the enactment of the legislation. This represents a step up from previous statements showing "concern," according to a senior ministry official.

"The international community has built ties with Hong Kong based on the trust in the 'One Country Two System' framework as provided for in the 1984 Sino-British Joint Declaration, which has led to the prosperity of Hong Kong," Motegi said. "The recent enactment of the national security law on Hong Kong Special Administrative Region undermines such trust."

Defense Minister Taro Kono said the move will have a "very serious impact" on plans for a state visit by Chinese President Xi Jinping.

In the U.K. -- which previously ruled Hong Kong as a colony -- Prime Minister Boris Johnson told reporters Tuesday that he is "deeply concerned" about the security law. London will decide soon whether to encourage up to 2.85 million Hong Kongers to claim residency rights in the U.K. in response.

"The imposition of national security legislation on Hong Kong rather than through Hong Kong's own institutions lies in direct conflict with China's international obligations under the Sino-British Joint Declaration," U.K. Foreign Secretary Dominic Raab said.

"We deplore this decision," said EU Council President Charles Michel, who stated that the legislation "risks seriously undermining the high degree of autonomy of Hong Kong."

The law is likely to further stoke anti-Chinese sentiment in Taiwan, which increasingly fears that it could be next. President Tsai Ing-wen expressed disappointment at the move, according to local media. Taipei will open a special office Wednesday to handle immigration and investment flows from Hong Kong.

Taiwan will do all it can to assist Hong Kong, Tsai said.

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