Ny Neil Foo
Kuala Lumpur — Hong Kong, is the Asian financial hub, a British colony that was handed over to Chinese rule in 1997, is a Chinese special administrative region with semi-autonomous status.
Under the “one country, two systems” framework, the territory is given economic and civil freedoms that people in the mainland do not have.
In response to Beijing’s recent decision to impose a national security law on Hong Kong, Trump said it will revoke Hong Kong’s preferential treatment as a separate customs and travel territory from the rest of China.”
Trump also said the U.S. will take “necessary steps to sanction” both Chinese and Hong Kong officials who are “directly or indirectly involved in eroding the Hong Kong’s autonomy.”
This is another international interference with Trump’s Administration after withdrawing from the World Health Organization (WHO) which is also related to China in the pandemic Covid-19 crisis management.
The latest outcry of the American’s sanction on Hong Kong will spark another wave of exile of Hong Kongers from the Duty Free Port Status territory to seek for more political and economic stability elsewhere in the neighborhood countries like South East Asia.
As the matter of fact, the United States and Hong Kong have had the close economic ties as below:
In the Year of 2018,
- Hong Kong was the 21stlargest U.S. trading partner,
- S. exports to Hong Kong are $50.1 billion and imports are $16.8 billion, making Hong Kong the largest U.S. trade surplus partner, at $31.1 billion,
- Hong Kong was the 3rd largest U.S. wine export market in the U.S.,
- Hong Kong was the 4th largest beef market in the U.S.,
- Hong Kong was the 7th largest farm products market in the U.S.,
- There are more than 1,300 American companies in Hong Kong and 85,000 Americans.
Such sanctions would directly hurt American businessmen more than Hong Kong or China side.
Likewise, the erosion of the rule of sanction or tariff will endanger the Hong Kong global financial hub status and make the city less attractive for other rich expatriates including European, Japanese and other MNCs (Mult-National Corporations).
Even some officials that aligned to the One Country Two System (the autonomous) policy of Hong Kong like John Lee would not agree with the Trump’s sanction against Hong Kong.
Besides Washington’s reaction of Hong Kong’s preferential treatment, United Kingdom Boris Johnson Administration is ready to issue 3 million BDO SAR Passports to Hong Kong citizens to “flee” the territory for the human right basis.
The Hong Kong dollar is a freely convertible currency, and most of the international business done by Chinese banks is done in US dollars from Hong Kong, and the result of the sanctions is that there is no alternative in China because even Shanghai is within the walls of China’s capital controls.
More than 70% of China’s international trade in the Renminbi takes place in Hong Kong, and China’s mainland manufacturing industry will be affected. Sanctions would both be a failure of the US and China, while Europe, along with other countries, Hong Kong and China, would suffer.
Consider that both Americans and European businessmen will start to leave Hong Kong for Asian financial strongholds such as Tokyo and Singapore or Taiwan, the emerging of South East Countries will become the attractions.
What advantages will be in Southeast Asia (SEA)?
- Financial Base: Singapore, as she is always the SEA Financial Hub
- Trade Bade: Malaysia, geographically located in the middle of SEA, ease of doing business and cost effective; and her multi-languages, cultural and religion government administration
- Manufacturing Base: Malaysia, Indonesia, Thailand, Vietnam, The Philippines with the ample of semi-skilled to low skilled and relatively low cost manpower availability
- E-commerce Base: Malaysia, as she has a very unique cross-border hub concept for the region under the advocation of Alibaba Jack Ma’s e-wtp concept by the name of “Digital Free Trade Zone (DFTZ)”.
(Note: Now, the author is establishing a DFTZ tie with USA for a very competitive courier service cost and 3-5 days delivery from Malaysia to USA)
- Education Base: Malaysia and Singapore, these 2 countries have established themselves as the regional education hub from basic to tertiary education.
Furthermore, with the former English Colony, English is the very common language in daily life and Chinese, Malay, Indonesia Language is widely spoken here
Second Home Policy: Malaysia, as she is the first country in the world introduced Malaysia as Second Home (MM2H) policy in a decade ago, which has attracted many international immigrants residing in this country.
The policy will grant 10 years free visa and allow foreigners to reside here with the family, buy properties, to form a company and permit the Children to pursue for the local and international education here.
The America-China Trade War has attracted many Mainland China manufacturers relocated their business base to South East Asia all these years!
With the recent Hong Kong issue, the analyst will see more exile of both Hong Kongers and mainland Chinese businessmen to look into diversifying their ventures and new life in South East Asia with 600 million populated and the highest GDP growth region in the world!