By APD writer Alice

In response to China's imposition of the Hong Kong National Security Law, the US has launched many retaliation measures. However, experts assess that the effectiveness of Washington's sanctions will be very limited.

Hong Kong is one of the world's major financial centers, so the imposition of sanctions will affect companies and consumers of the US, Hong Kong and Western countries.

On July 14, US President Trump signed the Hong Kong Autonomy Act, which approves sanctions on Chinese and Hong Kong officials who enforce the law, as well as an executive order ending Hong Kong's preferential trade treatment.

Under the law, Hong Kong will be treated the same as mainland China, with no special privileges, no special economic treatment and no export of sensitive technologies.

Right after that, China threatened to take very strong retaliation measures if the law is enacted.

In addition to the aforementioned law, Washington even planned many other measures to respond to Beijing's imposition of the national security law. President Donald Trump administration’s officials last week met at the White House to discuss sanctions related to Hong Kong.

The White House advisers had studied the possibility of striking against the Hong Kong dollar (HKD) peg. Hong Kong has pegged its currency to the US dollar since 1983, allowing it to fluctuate within a fairly strict band that has generally centered around 7.8 HKD per US dollar. To break this rate, the White House aids proposed limiting Hong Kong banks’ access to the US dollar.

However, analysts said it will be difficult for the Trump administration to enact such measures, because they will cause a lot of turmoil in financial markets in the world which mainly base on the US dollar. In addition, these measures will affect the US government bonds that China holds a lot, and even destabilize other currencies also pegging to the US dollar, especially those of many US allies.

According to vice president of the Asia Society Policy Institute Wendy Cutler, who is also a former US trade official, the seeking of sanctions on those enforcing the Hong Kong National Security Law is not an easy task. There are many options, but none of them is really effective.

According to the expert, instead of measures to disturb the world financial markets, the Trump administration may enact other sanctions, such as suspending the US-Hong Kong extradition treaty, or stopping cooperation with Hong Kong police.

Other analysts said that the enactment of additional sanctions on Chinese officials or trade sanctions on Hong Kong will not have much impact on Beijing's intentions to gradually integrate this special administrative region into the political and security system of mainland China.

(ASIA PACIFIC DAILY)