The U.S. Senate passed what may be one of the most important bills of the Biden presidency: the $170-$250 billion American Innovation and Competition Act of 2021, which includes a “basket” of sub-bills, including the China Challenge Response Act, the Defending America’s Future Act, the Infinite Frontiers Act, the Strategic Competition Act, etc. In addition, there are the Taiwan Learners Act and the Taiwan Sovereignty Symbol Act. If you look at the names and the content alone, you would think it was written by Trump. The main theme of this bill is to compete head-on with China, whether it’s spreading money to develop artificial intelligence, 5G to 6G technology, or defending Taiwan and boycotting the Chinese Winter Olympics, all with China as the imaginary enemy. After the Senate passed the bill (with many Republican lawmakers voting for it), Biden immediately issued a statement welcoming it, while the House had earlier passed another similar, but different version of the bill.
In other words, although the current draft passed by the Senate is not finalized, the final content will probably not be too far off. There are so many things to be covered by the bill, but there are still five major provisions that mention Hong Kong, and they are all specific to the operation and well worth our attention:.
Section 3301: $10 million will be allocated to the State Department’s Bureau of Democracy, Human Rights and Labor to “promote democracy in Hong Kong”. Although no details are available, with the fund ($10 million is not a small amount), there will be guidelines for application, and I believe that overseas Hong Kong people, especially U.S. students and immigrants, will be encouraged to form groups to apply for this funding. As for the “promotion of democracy,” the most direct association is with the media, academia, and publishing as soft power agents.
- Article 3309: Establish the “Hong Kong Internet Freedom Project” to provide Hong Kong people with the tools to bypass the Great Firewall and promote Internet freedom, and state that $10 million will be provided to the Open Technology Initiative and another $20 million to the above-mentioned Democratic Human Rights Commission. The “Free Internet Project” of the Labor Department is to defend the Internet freedom in Hong Kong. The funding of $30 million, more than “supporting democracy in Hong Kong,” reflects the U.S. analysis that Hong Kong’s Internet will soon lose its last freedom and become a tool for China to monitor Hong Kong people, but it is not clear what can be done. If the funding is for research and development to break the Great Firewall of China and use Hong Kong as a breakthrough, this is Hong Kong as the main battlefield of cyber warfare.
- Section 3346: Mandate the Secretary of State to report on how the Chinese government is abusing Hong Kong’s status to circumvent U.S. laws and protection policies. Under the U.S. Hong Kong Policy Act, the Secretary of State is required to report regularly to Congress on Hong Kong’s “one country, two systems” situation, but determine whether to continue to give Hong Kong special policies; now the focus is on “how China is using Hong Kong’s status to undermine U.S. interests,” which, to put it bluntly, is how to abuse Hong Kong’s status to invest in the United States, buy U.S. industries, and then infiltrate The United States is a type of behavior. If the “report” is taken seriously, a number of Hong Kong companies representing China’s interests, that is, those companies and principals who “work” in the United States under Hong Kong status, could become targets of the United States.
Section 5302: Mandate the State Department to submit a report assessing the “nefarious conduct” of Chinese SOEs, including how they use their wealth and influence to undermine Hong Kong’s autonomy and prevent any U.S. funds or assistance from flowing to those enterprises or their subsidiaries, and make any new recommendations to address such conduct. In other words, a large number of Chinese stocks listed in Hong Kong could fall into this category and be “researched” by the U.S. Those who donated money to support the Hong Kong National Security Act are, logically, enough to be on the list.
- Section 5303: Mandates the State Department to submit reports on Chinese officials who violate human rights in Hong Kong and violate U.S. sanctions against Hong Kong, and to evaluate options for sanctions against them. Ostensibly, this initiative already exists in the Hong Kong Bill of Rights and Democracy, but the latter requires a “gross violation” threshold for human rights violations, which is not even present in the new bill. The objective effect is perhaps to allow people to report “violations of human rights in Hong Kong” by Chinese officials or Hong Kong officials.
The Road to No Return? Biden Administration Expands Blacklist of Chinese Companies
At the same time, how the Biden administration is following Trump’s China policy and how it affects Hong Kong is also evident in another concrete measure announced recently. He signed an executive order on the eve of June 4, reaffirming that the 48 Chinese companies announced in Trump’s executive order last November would remain on the blacklist, and adding more than a dozen more. The companies on the “blacklist” are those involved in the Chinese military, allegedly involved in human rights and privacy violations, and many of them are giant Chinese companies, which are now prohibited by the executive order from investing in them, including buying their shares, by any American company or individual. As a result, China Mobile, China Telecom, and China Unicom have all been halted from trading on the New York Stock Exchange. In addition, China Communications Construction, China Railway Construction, CNOOC and Huawei, all of which are familiar to Hong Kong people, are on the list.
The importance of this ban is to show that the “China control” continues to be a bipartisan consensus in the United States, and has not changed because of Biden. Biden as a senior politician, bureaucrat, this aspect of internal and external coordination, without Trump’s bewildering “surprise”, but the implementation level is more detailed, such as this list by the Treasury Department detailed list of each company’s problems, I believe it will not be like Trump’s executive order was once internally challenged. As to whether it is effective, it depends on whether Biden can persuade the Five Eyes Coalition and other G7 allies to act together, which is the category he emphasized during his campaign that he has an advantage over Trump.
For Hong Kong, almost all of these blacklisted companies are also listed in Hong Kong, and getting them listed “twice” is one of the reasons why China desperately needs to “take back” Hong Kong for the second time. In other words, if the U.S. were interested in destroying Hong Kong’s financial markets, it would already be very easy to seriously deal with this group of blacklisted companies in Hong Kong, and even sanctioning the Hong Kong Stock Exchange would be within its reach, the question is how thorough it wants to be. As the relevant orders have a one-year grace period, which is still the space for bargaining between China and the United States, but currently see no signs that relations between the two countries will improve.
The current strategic goal of the United States, naturally, is to compete head-to-head with China in the war on science and technology, this type of economic ban is actually just to buy time, what is really being done is to re-enhance the strategic advantage of the United States and open up new battlefields in areas such as space. On the other hand, strengthening local strength in this area can also solve some domestic economic problems, which is perhaps more practical than encouraging U.S. companies to return to set up factories at home. China’s response, in addition to continuing to try to “refer” to existing companies to “independent research and development”, is to try to expand its demographic advantage over the United States in the Internet era, hoping that through the “universal fifty cents The “universal fifty cents” as artificial intelligence, big data experimentation white mice and weapons. Such a general direction, China and the United States is not limited decoupling is impossible, Hong Kong does not continue to become a grinding heart is also impossible, the real financial shock has not actually begun, after a comprehensive political purge, to come or will come.
Biden’s executive order, coupled with Congress’s “2021 U.S. Innovation and Competition Act” if eventually passed with similar provisions, I believe the United States Hong Kong people will get a lot of opportunities to expand, more Chinese companies and individuals in Hong Kong will fall into the sanctions list, Hong Kong is more likely to become the center of the U.S.-China cyber war, but also implies that Hong Kong’s unique position will not change in the short term, otherwise the United States has no room to cut into Hong Kong. In order to “counteract”, China will naturally grant a bunch of funds to “patriotic groups” to “counter” the U.S. by sending more 50-cent corps to infiltrate the international community with the “new Hong Kong More Hong Kong people will be wanted overseas, and more U.S.-owned companies will be targeted. In this way, the Cold War will heat up in Hong Kong and gradually extend to economic warfare and cyber warfare, and Hong Kong will continue to be a battlefield, and Hong Kong people at home and abroad will be front-line soldiers no matter where they are or where they choose to be. The high pressure of geography in Hong Kong will not change in the near future, and national security will continue to “crack” the “collusion with the United States” of major cases. There is a danger and an opportunity, this is the big time.