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Biden’s Warning on Hong Kong

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A woman takes a picture of last issue of Apple Daily in front of a newspaper booth where people queue up to buy the newspaper at a downtown street in Hong Kong, June 24.



Photo:

Vincent Yu/Associated Press

Neither China nor Hong Kong authorities have paid much of a price for their assault on the city’s autonomy. That may be changing, as a pair of useful actions by the Biden Administration suggest.

The U.S. sanctioned seven Chinese officials for their role in assaulting the freedom Beijing promised Hong Kong. But the bigger news was the release of a business advisory highlighting the increased risks for American companies operating in today’s Hong Kong.

The advisory is a joint release by the State, Commerce, Homeland Security, and Treasury Departments. It doesn’t forbid companies from doing business in Hong Kong. But it rightly warns that Beijing’s actions carry “potential reputational, financial, and, in certain instances, legal risks associated with their Hong Kong operations.”

Chief among these risks is running afoul of Hong Kong’s new national security law. As the advisory notes, foreign nationals, including one American, have been arrested under this law. The NSL makes clear that “‘an incorporated or unincorporated body, such as a company or organization which commits an offense’” under the law may have its license or business application revoked. Certain provisions apply to offenses committed outside Hong Kong too.

The advisory notes that, starting Aug. 1, Hong Kong law will let authorities stop people from leaving—including non-residents. China is not shy about using such powers. When Huawei executive

Meng Wanzhou

was detained in Canada after an extradition request by the U.S. in 2018, Beijing responded by arresting two Canadian citizens. They are still captives.

The advisory mentions

Apple

Daily, a popular newspaper whose pro-democracy owner, Jimmy Lai, was arrested in December and is in prison awaiting trial on national security charges. And it reminds companies that U.S. sanctions on Chinese and Hong Kong officials “can result in civil and criminal penalties” for companies that do business with them.

The pretense of Chinese and Hong Kong authorities is that their crackdown on the rule of law and dissent will have no effect on Hong Kong’s viability as an international center for trade and finance. The Biden advisory is a sober reminder how hollow and short-sighted this belief is. U.S. firms can’t say they weren’t warned.

Main Street: If Joe Biden intends to outcompete Beijing, surely Milton Friedman still offers a more compelling model than simply copying the government-directed approach of Xi Jinping. Images: AP/Getty Images Composite: Mark Kelly

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the July 17, 2021, print edition.

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