US warns against American business operations in Hong Kong

The U.S. is warning American businesses against engaging in operations in Hong Kong as China’s influence in the city continues to grow.

The Department of State, the Department of the Treasury, the Department of Commerce and the Department of Homeland Security issued the advisory on Friday, saying new laws in Hong Kong such as the National Security Law (NSL) could negatively affect companies. 

“These risks fall into four categories: risks for businesses following the imposition of the NSL; data privacy risks; risks regarding transparency and access to critical business information; and risks for businesses with exposure to sanctioned Hong Kong or PRC entities or individuals,” the departments said. 

The advisory points to the arrest of one U.S. citizen and the search and closing of Apply Daily, the city’s pro-democracy newspaper, by the government as examples of how far Hong Kong’s new measures can go to interfere with business.

“The NSL introduced a heightened risk of PRC and Hong Kong authorities using expanded legal authorities to collect data from businesses and individuals in Hong Kong for actions that may violate ‘national security,’” according to the advisory, referring to China’s formal name, the People’s Republic of China.

The U.S. also outlined the sanctions it has put in place in response to Hong Kong’s new laws and says U.S. companies “may face heightened risk and uncertainty in connection with sanctions compliance efforts.”

China responded to reports about the upcoming advisory earlier in the week warning the U.S. against interfering with the internal affairs in Hong Kong. 

Chinese foreign ministry spokesman Zhao Lijian said the city’s laws protect foreign companies and the advisory was “typical political manipulation and double standards.”

President Biden defended the advisory on Thursday when asked about it at a press conference.

“Let me talk about the business advisory. The situation in Hong Kong is deteriorating. And the Chinese government is not keeping its commitment that it made how it would deal with — with Hong Kong,” Biden said.

“And so it is more of an advisory as to what may happen in — on Hong Kong. It’s as simple as that and as complicated as that,” he added.

Secretary of State Antony Blinken marked the one-year anniversary of Hong Kong’s NSL on Friday, saying Chinese and Hong Kong officials have “systematically undermined Hong Kong’s democratic institutions, delayed elections, disqualified elected lawmakers from office, and forced officials to take loyalty oaths to keep their jobs.”

“We will continue to stand up for the rights and freedoms guaranteed to people in Hong Kong by the Sino-British Joint Declaration and the Basic Law,” he added.

—Updated at 12:44 p.m.