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6 July, 2001 US-Hong Kong trade relations |
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My attention has been drawn to an article in the Asian Wall Street Journal dated June 26 which suggests that the US government is going to produce a report reviewing whether Hong Kong's autonomy is maintained.
The article said that "Behind the impending report is an implied threat, contained within the United States-Hong Kong Policy Act of 1992: that if Hong Kong is deemed insufficiently autonomous from the rest of China, an order from the US president could strip the city of the special privileges it enjoys from Washington. those privileges range from quotas for textile imports to giving the city access to high-tech exports from the US that aren't available in the rest of China."
After speaking to people in the Hong Kong government who are familiar with trade issues, it transpires that the situation is as follows:
| (a) | Under the US-HK Policy Act, the Secretary of State has to produce a report on HK once every year until March 2000. After that, the report was no longer mandatory. But US government officials have long indicated that they would like to continue production of this report because they want to keep various parts of the US government informed of developments in Hong Kong and to keep HK on their radar screen. The announcement of this action is made only recently because this was delayed by the various developments related to the setting up of the new Bush administration. |
| (b) | In so far as the export of strategic commodities (high tech equipment) is involved, this has been a regular subject of discussion for a long time. The HK government has demonstrated over the years to the US that HK has a good export control regime in place. Both the US Administration and the US Congress had published reports in the past acknowledging HK's effectiveness in this area. Latest discussions between the HK trade officials with the US Commerce Department do not suggest any change in the US stance. |
| (c) | The textile quotas are the results of past ATC negotiations under the auspices of the WTO. Strictly speaking, this has nothing to do with the report on Hong Kong referred to above. The key issue related to quotas is the cheating that goes on. But this is not a HK-specific issue. |
Overall, my conclusion is that the article in the AWSJ creates a sense of worry that is not justified by the facts.
| By K.C. Kwok |
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| This memorandum is issued by Standard Chartered Bank and is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Opinions expressed herein are subject to change without notice. This memorandum has been prepared solely for information purposes and for circulation and no responsibility is accepted for use of or reliance on information provided herein. This memorandum does not constitute any solicitation to buy or sell any instrument or to engage in any trading strategy. Standard Chartered Bank, or any company within the group of which it forms part, may have a position in any of the instruments or currencies mentioned . |
