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US Reportedly Drops Plans to Hit Hong Kong's Financial Preferences Over Beijing Security Law

© Sputnik / Natalia Seliverstova / Go to the mediabankOfficial residence of the U.S. President, the White House in Washington D.C.
Official residence of the U.S. President, the White House in Washington D.C. - Sputnik International
The US threats to impose economic sanctions against China and strip the semi-autonomous island of its economic preferences might not come to pass as the White House has apparently started seeing these measures as shooting themselves in the foot.

The US is reconsidering its course of action concerning China's decision to adopt a Hong Kong national security law, shifting from broader economic sanctions against the island's financial system towards personal sanctions against Chinese officials involved in the development of the law, The Wall Street Journal reports, citing anonymous sources in Washington.

According to the newspaper, the idea of crippling Hong Kong's global financial standing by undermining its preferential dollar exchange rate, pitched by the Department of State, has been dropped from the list of possible measures for the time being. The WSJ clarified that it was done during a meeting at the White House last week after it was realised that the measure might hurt American, western, and Hong Kong companies and consumers, while having little impact on Beijing's policies.

In addition, US economic officials reportedly opposed introducing broad financial sanctions at a time when the global economy is struggling to recover from the consequences of the coronavirus pandemic.

The group determining Chinese sanctions is expected to discuss alternative courses of action during a gathering this week, the WSJ said. Both the Department of State and the White House declined to comment on the matter.

Row Over National Security Law

Beijing's move to adopt the new law, which bans all treasonous activities and actions, aimed at dividing the country, on the territory of Hong Kong, created a new source of tensions between China and the US. Washington insists that Beijing is violating its pledge to keep the island semi-autonomous under the so-called "one country, two systems" principle, which allowed Hong Kong to have separate legislation.

Secretary of State Mike Pompeo attends a news conference at the State Department in Washington, DC, U.S., June 10, 2020.   - Sputnik International
Pompeo Accuses Chinese Authorities of 'Orwellian' Censorship on Hong Kong

In response to China's actions, the US Congress passed a law allowing the government to impose sanctions against the Asian country over the new national security law, with the bill expected to be signed by President Donald Trump soon. Beijing condemns the US plans to introduce sanctions, accusing Washington of meddling in China's domestic affairs and said that sanctions will be "deeply detrimental" to their bilateral relations. Chinese Foreign Minister Wang Yi urged Washington to seek ways to peacefully co-exist with Beijing, rather than try to "remodel" it.

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