US warns businesses of risks in Hong Kong operations

The United States has issued a warning regarding the increasing risks for businesses operating in Hong Kong, highlighting that even routine activities may conflict with the territory's new national security regulations. This advisory updates a previous one from 2021 and reflects concerns over the vague nature of the laws, particularly the recently enacted Article 23, which could lead to severe penalties for actions deemed treasonous or insurrectionary. The advisory points out that activities such as engaging with local officials or conducting research on government policies could be scrutinized under these laws. Since the implementation of the national security law, there has been a notable crackdown on dissent, with over 300 arrests made, including one US citizen. The US State Department has expressed that the differences between Hong Kong and mainland China are diminishing, raising alarms about the potential for foreign nationals to be prosecuted for alleged espionage under similar laws in mainland China. This situation has created an environment of uncertainty for foreign businesses. In response to the US advisory, Hong Kong officials, including Eric Chan, have dismissed the claims as an attempt to undermine China's growth and have asserted that national security cases are handled fairly. They argue that the law has been in place for a significant time without arbitrary arrests of business individuals, suggesting that the US's warnings are intended to intimidate potential investors. The US has consistently emphasized that the security measures imposed by Beijing threaten the openness that has historically made Hong Kong a vital trading hub. The local government maintains that the new regulations are necessary to prevent violence and maintain order following the protests of 2019.