The author is Timothy Kwai, he is a member of the China Association of Hong Kong and Macao Studies.
The United States issued an “advisory” to US businesses operating in Hong Kong on July 16. The Hong Kong Special Administrative Region government criticized the “advisory” as biased, self-serving, a double standard and not fact-based.
The US rarely issues an “advisory” with four US government departments (Treasury, State, Commerce, and Homeland Security) on board. During the Trump administration, the US rarely made an open attack on China in the form of a combination of the four government departments. With the Democratic Party now dominating the decision-making process in Washington and waging a smear-with-misinformation campaign against China, many observers believe that a new Cold War between China and the US has begun. The “advisory” warned US businesses operating in Hong Kong of the “potential risks” posted by the National Security Law for Hong Kong.
Some law scholars in the US believe that Article 38 of the NSL means this law shall apply to offenses committed against the HKSAR from outside the region by a person who is not a permanent resident of the region, and the scope of application of the provisions is so wide that it can cover foreigners. They believe American companies in Hong Kong or even in the US involved one way or another in the Jimmy Lai Chee-ying case may face criminal prosecution according to this law.
This “advisory” has taken the American-style alarmism to a new level. First, since the National Security Law was enacted more than a year ago, has any Hong Kong-based company been wrongly implicated? Has any business in Hong Kong, US or foreign, been prosecuted without due process? And has any US company or foreign firm outside Hong Kong been prosecuted? The Hong Kong law enforcement authorities have targeted only a small number of anti-China subversives based in Hong Kong in the past year. Several directors and senior executives of Lai’s Next Digital media group are suspected of violating Article 29 of the NSL. The Hong Kong Police Force has frozen HK$18 million (US$2.3 million) worth of assets belonging to three companies affiliated with Apple Daily. Apple Daily announced that it would cease operations, but it is still active online in Taiwan.
Only a handful of companies operating in Hong Kong without a license have been shut down or are under investigation for involvement in illegal activities. That’s all. Moreover, all articles published by Apple Daily, widely known as the top rumor mill in Hong Kong, are on the internet for everyone to read. The Hong Kong Police Force’s professional reputation is solid and well-respected by peers around the world.
As long as US companies abide by Hong Kong law and the National Security Law, they have nothing to fear, except their own federal government.
The US has many laws that can prosecute foreigners outside the country. The US Congress has passed some laws that clearly stipulate that the court has extraterritorial jurisdiction. Many of these laws invoke maritime issues, such as the Maritime Drug Control Act. Other laws that the US Congress may implicitly provide for extraterritorial jurisdiction include conspiracy charges against people living abroad for conspiring to commit crimes in the US, by accusing someone overseas of attempting to commit crimes in the US while residing abroad, etc. US courts will also apply US anti-terrorism criminal laws to foreigners in foreign countries based on “homeland security concerns”. Also, US courts can extend other criminal laws to foreigners indefinitely if they find the “evidence” submitted by the prosecution sufficient. In stark contrast, the NSL enforced in Hong Kong has clearly defined coverage, which shows how brazenly arbitrary the US is when it comes to enforcing its own laws wherever and however it wants. In 2014, the US Senate Select Committee on Intelligence released an investigation report on the use of torture by the CIA on suspected al-Qaida members in custody. The report stated that the CIA conducted “serious torture” to collect intelligence after the Sept 11, 2001, terrorist attacks. The spy agency also conducted secret detentions and interrogations of “terrorist suspects” in foreign countries. US officials and legal experts who allegedly analyzed the “Hong Kong National Security Act” claimed without proof that its provisions are ambiguous and too broad, while turning a blind eye to similar laws that their own country is enforcing. Do they have standards, or professional integrity for that matter?
The Biden administration has inherited most of the Trump administration’s China policy, with its own additions to boot. Trump urged American companies to abandon their operations in China and return to the United States in 2020. The Biden administration’s “warning” that even cited national economic interests as an excuse rehashes Trump’s plea. According to a survey commissioned by the American Chamber of Commerce in Shanghai and reported by the Financial Times last year, American companies were unmoved. In May of this year, a survey by the American Chamber of Commerce in Hong Kong claimed that 40 percent of the respondents in a similar survey said they considered leaving Hong Kong for various reasons. However, there is no evidence it actually has happened in the last two months. The COVID-19 pandemic is largely under control in Hong Kong, and the economic recovery is strong. I don’t know how many US businesses are still planning to leave Hong Kong now or in the near future.
I am not entirely sure if the US government knows exactly how capitalism works but have no doubt American companies chose to do business in China, including Hong Kong, and every other overseas market for that matter, according to careful assessment of each location regarding profitability and cost-effectiveness against all sociopolitical limitations. This is why American companies do not need the US government to tell them what to do with an “advisory” like that. Most importantly, as a Hong Kong resident, I believe the National Security Law has restored peace and stability to Hong Kong. The city is now a much safer place than the days between June 2019 through June 2020, a period of utter chaos and violence, also known as the “black revolution”. The way Washington pretends that American businesses on the ground don’t know better is simply laughable. The “advisory” is believed to be part of Washington’s current campaign to lure overseas US companies back to US land while stepping up its suppression of competitive Chinese companies. This is a series of actions by the US government to harm others for US national gain. By the way, the US accounts for about 2.4 percent of foreign direct investment in Hong Kong, ranking sixth at this moment.
According to the “Doing Business 2020” released by the World Bank, Hong Kong’s business environment ranks third among 190 markets, while the US is in sixth place. And the US ranks 55th in the world for startup companies. Go figure.
In the post-epidemic world, Washington politicians still think they are superior. They are trying to make everything difficult for China but are harming American companies instead. But they know chickens come home to roost.