China has reacted with anger at American threats to close Hong Kong’s trade offices in the United States, pledging to ‘take practical and effective measures to resolutely counteract it’, while the territory’s Commerce Secretary accused Washington of ‘slander’. In reality, Hong Kong Economic and Trade Offices (HKETOs), which were set up to oversee the territory’s external commercial relations and have some diplomatic privileges, are an anachronism. Now that Hong Kong has been stripped of its autonomy, they appear to have little purpose other than to parrot Beijing.
There are three such offices in the US – in Washington DC, New York and San Francisco – and on Tuesday the US House of Representatives ordered the government to examine whether they were operating independently of Beijing. If not they would be given six months to close. In effect, lawmakers are demanding that the trade offices justify their role as quasi-embassies – something they will struggle to do. Republican Representative Chris Smith, who chairs the Congressional-Executive Commission on China, called the legislation ‘a necessary next step in tangibly demonstrating our solidarity with the persecuted citizens of Hong Kong’.
It is little surprise that HKETOs should come under closer scrutiny
The HKETOs in their current form were established after the return of Hong Kong to Chinese rule in 1997. Under the Basic Law, Hong Kong’s mini constitution, the territory was to enjoy a high degree of autonomy from Beijing for 50 years. It was granted significant trade privileges, whereby it was treated as a separate entity from China, negotiating its own agreements and tariffs and participating in economic forums. The HKETOs were central to this commercial autonomy, though they also promoted the city politically and often lobbied furiously on its behalf.
That all changed when China imposed a national security law on Hong Kong in 2020, which effectively scrapped the Basic Law and with it the notion of ‘one country two systems’, while criminalising political dissent. Hong Kong earlier this year added its own security law to this repressive arsenal. Hundreds of activists, politicians and journalists have been jailed, and business people have been leaving in droves as the territory has become increasingly indistinguishable from the mainland.
The US has revoked Hong Kong’s trade privileges and placed sanctions on officials, while multinational companies are treating the territory as just another Chinese city, introducing safeguards that have become routine on the mainland. Earlier this year, for example, it was reported that the American company Latham & Watkins, the world’s second largest law firm, was cutting off its Hong Kong-based lawyers from automatic access to its international databases. Top US executives are being advised to use burner phones – disposable devices – when visiting Hong Kong and not their usual work phones, out of fear of surveillance and hacking. This has become common practice for mainland China but is being extended to Hong Kong.
In this atmosphere it is little surprise that HKETOs should come under closer scrutiny, accused of losing their purpose and becoming little more than mouthpieces for Beijing. There are 14 trade offices overseas, including in Britain, Germany, Australia, Canada and Belgium (in Brussels, for EU purposes). An additional concern is that they have reacted to the new status of Hong Kong in a sinister way. Earlier this year, Bill Yuen, the office manager of the Hong Kong trade office in London and a retired Hong Kong police officer, was arrested and charged under Britain’s new National Security Act. He and two others were accused of espionage, including gathering information and surveillance of Hong Kong exiles, during which they allegedly broke into a residential address in the UK.
At the time, Regina Ip, a former security chief and convener of the Hong Kong’s executive council, declared that it was reasonable and legal for trade office staff to conduct intelligence on ‘anti-China MPs and Hong Kong exiles’. The territory’s government offered a reward of 1 million Hong Kong dollars (£100,000) for information about wanted fugitives, while John Lee, its chief executive and himself a former Hong Kong policeman, said that fugitives should be treated like ‘rats in the street’, who would be ‘pursued for life’ and ‘spend their days in fear’. He has embraced with enthusiasm the role of Communist party enforcer, and there is plenty of reason to fear that he expects the territory’s de-facto embassies to do the same.
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