Proposed Hong Kong Bill May Risk Free Trade Status

To the alarm of business leaders, Hong Kong is drafting a law that would bring it into compliance with any sanctions China may impose on foreign countries after it takes over the British colony next year, a newspaper reported Sunday.

The South China Sunday Morning Post said the legislation would mean that Hong Kong risks “being sucked into Sino-U.S. trade wars” after the hand-over.

Hong Kong is to remain a capitalist, free-trading territory under Chinese sovereignty. But China will run its foreign affairs, and economic sanctions often straddle the two areas.

China and the United States have repeatedly threatened each other with sanctions over copyright piracy and export quotas, but Hong Kong, as a British colony, has been able to stay out of these disputes.

With offices closed Sunday, officials and business representatives could not be reached for comment on the report, but they were quoted extensively in the Post’s front-page story.

The English-language paper quoted Frank Martin, president of the American Chamber of Commerce in Hong Kong, as saying the proposed bill “would seem to put Hong Kong’s commitment to free trade very much at risk.”

“Taking directions from mainland China is inconsistent with the principle of a high degree of autonomy,” he was quoted as saying.

It may also make Washington reconsider its trading relationship with Hong Kong, he reportedly said.

A government trade spokeswoman said no final decision had been made and that other options were being studied, the paper reported.

The Post said drafting of the bill has begun but that it has not been approved by Beijing.