A Hong Kong association gathers at Chater Garden, Central Hong Kong, in support of the national security legislation in the city. Dozens of participants marched to the US Consulate General in Hong Kong waving the Five-Starred Red Flag and shouting slogans supporting the legislation and protesting the US' interference in China's internal affairs. Photo: cnsphoto

No sanctions can terrify Hong Kong, which would be minimally affected by the US pullback, Hong Kong Special Administrative Region (HKSAR) Chief Executive Carrie Lam Cheng Yuet-ngor said on Tuesday after the US announced it would revoke the city's special status as separable from the Chinese mainland.

"I believe the country will take countermeasures when needed and the HKSAR government will fully keep step with [the central government] if the countermeasures proposed by the central government in diplomatic terms require coordinated efforts from the HKSAR government," Lam told a press conference.

US Secretary of Commerce Wilbur Ross announced the revocation of the city's special status in a statement posted on the US Commerce Department's website on Monday. 

"Commerce Department regulations affording preferential treatment to Hong Kong over China, including the availability of export license exceptions, are suspended. Further actions to eliminate differential treatment are also being evaluated," read the statement. 

In a separate announcement on Monday, US Secretary of State Mike Pompeo said the US is ending "exports of US-origin defense equipment and will take steps toward imposing the same restrictions on US defense and dual-use technologies to Hong Kong."

Stating that Hong Kong is psychologically prepared for the shocks, Lam told reporters on Monday that the US runs a goods trade surplus of $30 billion annually with Hong Kong, and the current sanctions only necessitate the application of export licenses for defense and dual-use products.

Substitutes can be found elsewhere for many of these products, she said, and the HKSAR government will also maintain contact with those in the fields of science and technology, especially those undertaking advanced research at several universities.

Liang Haiming, chairman of the China Silk Road iValley Research Institute, told the Global Times on Tuesday that the US' Hong Kong sanctions will have more of a symbolic than materialistic impact on the city.

Hong Kong's special status as a separate customs territory is granted by the Chinese mainland under a WTO framework, and the US' move will impact only its own trade with the city, he said, noting that the US will harm its own interests.

In the past decade, the US' trade surplus with Hong Kong has been the biggest among all its trading partners, totaling $297 billion from 2009-18, official data showed. US exports of goods and services to Hong Kong, as well as Hong Kong's direct investment in the US, have supported some 210,000 jobs in the US.

Liang said that the Trump administration may use Hong Kong to pressure the Chinese mainland to further implement the phase one trade deal despite the global pandemic, in a bid to benefit its own election this year.

"If Trump insists on going against the interests of the US corporate sector and Wall Street to impose sanctions on Hong Kong, tycoons may 'do anything' to stop Trump's re-election," he said, noting that this would lead to greater losses than gains for Trump, who has slipped behind his Democratic opponent in some recent polls.

Self-sufficient military

Military expert and TV commentator Song Zhongping told the Global Times that the US' move to ban exports of relevant technologies to Hong Kong is just a political gesture without meaningful effect as the US does not export anything that could help China's military development and did not do so even before Hong Kong's national security legislation.

"Many technologies are used by both civilian sectors and the military, and the US is very strictly managing its technological exports to other countries. It is impossible for US firms to export the most advanced technologies to China, and it is also impossible for the Chinese military to rely on technological imports from others, especially the US," he said. 

Due to the export ban, the US will lose its market in Hong Kong, and the Chinese city will find replacements from other trade partners such as the EU, Song noted. He added that the US could also halt police-use product and technology exports to Hong Kong, but the US no longer has advantages in these fields, and the Chinese mainland can sufficiently supply the Hong Kong Police Force.

The US is now frequently sanctioning other economies by stopping exchanges or imposing tariffs, and the consequences of this unilateralism will be "the US decoupling itself from the world market," said Song.

Countermeasures expected

"There's nothing to be afraid of," Tam Yiu-chung, a member of the National People's Congress Standing Committee, told the Global Times on Tuesday following the meeting's voting session which reportedly passed the highly anticipated national security law for Hong Kong. 

Tam said both central and Hong Kong authorities have been preparing for this scenario for a long time, and he is confident in the Chinese government's ability to take countermeasures.

China is expected to launch strong countermeasures against the US in response to its unreasonable sanctions on Hong Kong, Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Tuesday.

"If the US imposes tariffs on imports from Hong Kong, Hong Kong must reply in kind. If there is evidence that US companies or individuals are involved in activities separating Hong Kong from the Chinese mainland, they would be punished according to relevant laws," Gao said.

Chinese Foreign Ministry spokesperson Zhao Lijian told a routine press conference on Monday that the Chinese government will impose visa restrictions on US personnel who have "behaved badly" with regard to Hong Kong-related issues.

"We should not be too optimistic as the US Commerce Department may launch financial sanctions - which may be under evaluation - on Hong Kong, which would be a powerful weapon against the global financial hub," Song Guoyou, deputy director of the Center for American Studies at Fudan University, told the Global Times on Tuesday.