U.S. companies with operations in Hong Kong be warned. That is the gist of the message made by President Joe Biden on July 16 as China’s clampdown on the former British territory continues to take hold. The president cautioned U.S. businesses of regulatory and financial risks, while the world’s most populous country continues its stranglehold on Hong Kong’s economic and political freedoms.
The wars of words and warnings between the two countries seems to have no end ever since China’s overreaching national security law passed in June 2020. The law is designed to limit the Hong Kong territory’s autonomy while also forbidding critics from circulating information that lambastes the country’s communist party.
Electronic surveillance, relinquishing data
U.S. and other global businesses with a presence in Hong Kong face continuing threats that include electronic surveillance without warrants and relinquishing data to Chinese authorities, warned Washington officials earlier this month.
Such threats were basically unheard of when the United Kingdom governed the territory until peacefully handing it over to China in 1997. Before the switch, China agreed in principle to let Hong Kong have substantial political autonomy for 50 years and keep its capitalist system under the “one country, two systems” philosophy.
Preservation of those economic and political principles has gradually eroded. However, an abrupt break seems to have taken effect since last year. In related news, the Biden administration ordered U.S. sanctions against seven Chinese government officials for violating Hong Kong’s autonomy.
Many challenges exist as in the business world. But numerous challenges surface when operating a global business. Add the turmoil between the U.S. and China and the goings-on in Hong Kong and the situation makes for an abundance of challenges.