Hong Kong's long-enviable position as the gateway to the West is in doubt
Secretary of State Mike Pompeo declared Hong Kong is "no longer autonomous", meaning its special status with the US is at threat.
Wednesday 27 May 2020 19:06, UK
This is not a good moment for Hong Kong.
Secretary of State Mike Pompeo's decision to certify the former British colony as "no longer autonomous" from China means that the special status it has enjoyed with the US since 1992 is now under threat.
"No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground," Mr Pompeo told Congress.
"Hong Kong and its dynamic, enterprising, and free people have flourished for decades as a bastion of liberty, and this decision gives me no pleasure."
Hong Kong's long-enviable position as the gateway to the West is in doubt.
US companies have been able to safely invest in Hong Kong, reassured by the 1992 agreement.
Around 290 American companies have regional headquarters in Hong Kong and trade between the two countries is estimated to be in the region of $38bn (£31bn).
As a recent example of the benefits enjoyed, Hong Kong was exempt from President Donald Trump's sanctions and tariffs on Chinese companies.
The special status has meant US support for Hong Kong to participate in the World Trade Organisation, and it has allowed Hong Kong to import sensitive technology that wouldn't be permitted to go to Beijing.
No doubt this move will have an impact for both sides, but it gives the White House room to impose sanctions on individuals and companies related Hong Kong - we should see it is a warning to Beijing.
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"Removing the Special Status fully is a one-shot lever," Steve Tsang from SOAS University told me.
"This falls short of that. It is a shot across the bow, but not a shot designed to sink Hong Kong. Not yet anyway."
Mr Pompeo's language is deliberately open to interpretation.
The second half of the statement is key: "The United States stands with the people of Hong Kong".
This is a step. Not the nuclear step, but it leaves Hong Kong weakened.