USA ends Hong Kong's special treatment, crimping flow of tech to territory

Seeing as finance is Hong Kong's thing and that industry needs lots of security kit, this could be scary

US President Trump has signed an order to end Hong Kong's special status, meaning that restrictions on high-tech exports to mainland China now apply to the Special Administrative Region as well.

The change of Status, announced on Tuesday, come weeks after Beijing imposed on Hong Kong a harsh new national security law that criminalises separatism, subversion, terrorism, and collusion with foreign forces. Violations of the law can result in extradition to China for trial and maximum sentence of life in prison.

The change of status means Hong Kong will no longer be treated as demonstrably independent from China and will therefore lose special privileges conferred under the United States-Hong Kong Policy Act of 1992.

Locals on the ground previously warned The Reg that these restrictions could have more of an effect than Beijing's national security law.

The moves will likely have far-reaching consequences for Hong Kong's burgeoning tech sector. One effect of the new restrictions is that Washington's technology bans against the mainland will extend into Hong Kong, barring local firms from importing high-end American kit and software. Such moves makes it more difficult for Hong Kong companies to important American hardware and software, as well as scare American firms off buying kit from Hong Kong, especially in sensitive industries like finance, infosec and infrastructure.

The new restrictions follow previous restrictions placed on the territory in the days after the national security law came into effect. These controls block American companies from selling some sensitive, high-technology products that could threaten national security to Hong Kong.

The effects will likely have a big impact on Hong Kong companies, which are heavily reliant on US technology. Electrical and telecommunications kit are America's biggest export to Hong Kong, accounting for more than half the products it sells of the company. On the flip side, the US was Hong Kong's largest trading partner after the mainland in 2018, the latest year on record.

The new executive order will also require the State Department to report to Congress every year about officials who seek to undermine "one country, two systems" model in place in Hong Kong since its handover in 1997. It will also give the president powers to seize the assets of these individuals and block their entry into the US.

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