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Biden administration warns businesses about risks of operating in Hong Kong

U.S. officials have warned that Beijing’s crackdown has violated human rights and weakened the separation between China and the former British colony.
The Victoria Harbour waterfront in Hong Kong.Peter Parks / AFP via Getty Images

WASHINGTON — The Biden administration issued a business advisory Friday warning that companies operating in Hong Kong face risks to their data privacy and that China’s national security law could negatively affect their staff, finances, legal issues, reputations and operations there.

U.S. officials have warned that Beijing’s crackdown on demonstrators and encroachment on Hong Kong’s independence has violated human rights and weakened the separation between China and the former British colony, which has had its own governing and economic system since 1997 under the “one country, two systems” framework.

“The situation in Hong Kong is deteriorating and the Chinese government is not keeping its commitment that it made how it would deal with Hong Kong,” President Joe Biden said Thursday when asked about the advisory. “And so it is more of an advisory as to what may happen in Hong Kong. It's as simple as that and as complicated as that.”

The administration also issued sanctions Friday against seven officials in the Chinese government's Hong Kong Liaison Office, which represents Beijing in the special administrative region, for undermining Hong Kong's autonomy.

"Beijing has chipped away at Hong Kong’s reputation of accountable, transparent governance and respect for individual freedoms, and has broken its promise to leave Hong Kong’s high degree of autonomy unchanged for 50 years," Secretary of State Antony Blinken said in a statement on the sanctions." He added: "Today we send a clear message that the United States resolutely stands with Hong Kongers."

On the business advisory, a senior administration official said the intent is to assist companies in making business decisions and risk assessments. The advisory warns that companies operating in Hong Kong could face warrantless electronic surveillance and be forced to surrender corporate and customer data.

“Developments over the last year in Hong Kong present clear operational, financial, legal, and reputational risks for multinational firms,” the White House said. “This business advisory provides companies with information that can assist them in making informed business decisions and properly assessing risk.”

After protests in Hong Kong in 2019 over China’s growing influence, the Chinese government announced in May of last year that it would sidestep Hong Kong's own legislature and pass the security law directly from Beijing. The new law made it easier for authorities to crack down on protestors and reduced Hong Kong's judicial authority.