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US to shutter high-profile Fulbright scheme in China, Hong Kong

President Donald J. Trump listens to a reporter’s question at an update briefing on testing capacity Monday, May 11, 2020, in the Rose Garden of the White House. (Official White House Photo by Shealah Craighead)
July 18, 2020

This article was originally published by Radio Free Asia and is reprinted with permission.

U.S. President Donald Trump said his administration would end a flagship educational exchange program in China and Hong Kong as part of U.S. sanctions against Beijing, but stopped short for now of listing high-ranking officials for asset freezes or visa bans.

In the latest U.S. response to the national security law imposed on Hong Kong by Beijing on June 30, Trump earlier this week signed the Hong Kong Autonomy Act providing for sanctions on individuals, organizations,and financial institutions that contribute to China’s actions to remove autonomy from Hong Kong.

But while Trump said China should be held accountable for its “aggressive actions against the people of Hong Kong,” and ended the city’s special economic and trading status, he stopped short of sanctioning any of its leaders, including chief executive Carrie Lam.

Section 3, provision (i) of the Executive Order signed by the president on Tuesday shuts down the Fulbright program of educational exchanges with Hong Kong and Chinese universities.

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However, Reuters reported that Trump hadn’t ruled out further sanctions on officials under the Act, which allows Washington to impose sanctions and visa restrictions on Chinese officials and financial institutions involved in the imposition of China’s new national security law in Hong Kong.

Bloomberg had earlier reported that Trump had ruled out additional sanctions on top Chinese officials for now.

Reuters quoted National Security Council spokesman John Ullyot as saying that nothing had been taken off the table, however.

“In no way has he taken anything off the table with respect to further sanctions of party officials for actions in Hong Kong or on other issues.” Ullyot told the agency. “Any suggestion otherwise by anonymous sources is flat out wrong.”

Targets for sanctions being considered

Discussions are continuing in the White House over potential targets for sanctions, and Lam could still be targeted, Reuters reported.

Meanwhile, Xiake Island, a WeChat commentary account belonging to the Communist Party’s official People’s Daily newspaper, reported that Washington was mulling a total entry ban on party members and their families.

The foreign ministry said it couldn’t confirm the report.

“If this is true, I think it is very sad,” spokeswoman Hua Chunying said. “What sort of impression will this give to the world?”

But a Hong Kong protest surnamed Chu welcomed the U.S. sanctions.

“China is interfering with the freedoms of the Hong Kong people in a serious way,” she said. “This evil law restricts freedom and democracy for the people of Hong Kong, turning it from an international city into a province of mainland China.”

Shaanxi-based political scholar Pang Dekui said Beijing has deployed the law to destroy the rule of law and the political structure of Hong Kong.

“It has also destroyed the promise that Hong Kong people would rule Hong Kong with a high degree of autonomy,” he said. “And the international community has a right to supervise [the implementation of those promises].”

Promises to Hong Kong broken

Secretary of State Mike Pompeo said the sanctions had been the result of the ruling Chinese Communist Party’s own choices.

“General Secretary Xi Jinping made a choice to violate the Chinese Communist Party’s promises to Hong Kong that were made in a U.N.-registered treaty,” Pompeo told journalists on Thursday. “He didn’t have to do that and he made that choice.”

Pompeo said via his Twitter account that the U.S. would be facilitating applications from Hongkongers applying for political asylum in the wake of the current crackdown on protesters and opposition figures under existing public order laws, and also under the draconian national security law.

“We stand with the Hong Kong people,” Pompeo wrote.

The vaguely worded new security law threatens anyone criticizing the Chinese or Hong Kong authorities anywhere in the world.

China’s feared state security police have now set up a headquarters in the city to implement its ban on actions and speech deemed subversive, pro-independence, or “terrorist” in inclination, although the definitions have already been criticized as impossibly vague by overseas legal experts.

Pro-China lawmakers in Hong Kong on Thursday slammed the Hong Kong Autonomy Act as “brazen interference” in the city’s internal affairs.

Pro-China lawmaker Starry Lee said her Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) would fully support any retaliation, as has been threatened by Beijing.

Uncertainty having an impact

While Beijing claims that the international community has wilfully “smeared” the national security law, there were signs that the uncertainty created by the imposition of a Beijing-led national security police force on the city were having an impact.

Deutsche Bank AG announced that its new Asia chief executive officer Alexander von zur Muehlen will be based in Singapore, not Hong Kong, as his predecessor was.

The decision has raised further concerns in the wake of the Hong Kong Autonomy Act over the city’s future viability as an Asian financial hub.

Former HSBC Global Markets economist Kelvin Lam said foreign banks and other financial institutions will be trying to analyze the situation as accurately as possible, and that personnel often give the first indication of plans to relocate.

“It’s always the employees who leave first, and then the money can follow at the touch of a single button,” Lam said. “So we may see a slow retreat of capital from Hong Kong, and maybe the relocation of their trading platforms to Singapore, because there isn’t so much investment any more.”

“These companies are being put off expanding in Hong Kong because of the instability and uncertainty there … where the political risks are very high,” he said.