US Secretary of State Mike Pompeo told lawmakers on Wednesday that President Donald Trump's administration no longer sees Hong Kong as autonomous from mainland China. While the move does not carry any immediate consequences, it is the first step needed to revoke the former British colony's preferential trade and financial status.

"No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground," Pompeo said. "Hong Kong does not continue to warrant treatment under United States laws in the same manner as US laws were applied to Hong Kong before July 1997."

Read more: Opinion: Hong Kong is lost

Hong Kong was transferred from a British to a Chinese territory 23 years ago and was to maintain autonomy from the Chinese government for 50 years. However, the security bill that Beijing has been pushing for Hong Kong in recent days has the potential to change the policy mainland China calls "one country, two systems."

While specific details of the security bill remain unclear, it is feared that, if enacted, it could cause Chinese intelligence agencies set up bases in Hong Kong.

"Beijing's disastrous decision is only the latest in a series of actions that fundamentally undermine Hong Kong's autonomy and freedoms and China's own promises to the Hong Kong people," Pompeo said.

Potential financial earthquake

US lawmakers passed a law in 2019 to support pro-democracy protesters in Hong Kong, but it required the city remain autonomous and able to maintain its separate status with the US for trading purposes. That is now on the brink of collapse.

"While the United States once hoped that free and prosperous Hong Kong would provide a model for authoritarian China, it is now clear that China is modeling Hong Kong after itself," said Pompeo, adding that the Trump administration was considering suspending Hong Kong's preferential tariff rates for exports to the US.

Hong Kong Chief Secretary Matthew Cheung disagreed with the US diplomat.

"It's for the long-term stability of Hong Kong and China, it won't affect the freedom of assembly and speech and it won't affect the city's status as a financial center," said Cheung, referring to the security bill.

China rejected the suggestion it be punished for what it sees as a domestic issue.

Asked about possible US retaliation over the security legislation, Chinese Foreign Ministry spokesperson Zhao Lijian said China would fight back against what he called "erroneous foreign interference in Hong Kong's affairs."

Protests in the streets

Hong Kong police arrested 360 people on Wednesday as thousands of people once again protested the controversial security measure introduced last week and other measures, including a bill that would make it illegal to insult the Chinese national anthem. 

Activists have said the bill would abolish basic freedoms for Hong Kong residents as well as visitors. The city has seen months of protests, even during the coronavirus pandemic, against Chinese security bills for the semi-autonomous city.  

The United States, European Union and other nations have expressed concern over the bill. 

Congress also targets Uighur abuse

Also on Wednesday, Congress overwhelmingly passed a bipartisan bill to impose sanctions on Chinese officials involved in human rights abuses against Uighurs and other minority groups — with its timing seen as a possible reaction to the security bill.

The legislation, which passed 413-1, can now be passed into law by US President Donald Trump. The President didn't say whether he would sign the legislation, but has earlier indicated that he could "very strongly" consider doing so.

Trump now has 180 days to put together a list of Chinese officials the US government will sanction. The key tenets of the legislation include an assessment of harassment and threats to Uighurs and other Chinese nationals in the US, and assessment of China's acquisition of technology for surveillance of persecuted minorities.

"Beijing's barbarous actions targeting the Uighur people are an outrage to the collective conscience of the world", said Nancy Pelosi, the speaker of the House of Representatives, while passing the legislation. Peter Urwin, a senior program officer at the Uighur Human Rights Project, a US non-profit, told the Associated Press that this is the first "concrete step by a government to penalize China over the treatment of Uighurs".

kbd, am/msh (AFP, AP, Reuters)

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