US Economy: Biden To Warn Companies About Operating Risks In Hong Kong

President Joe Biden is expected to brief U.S. companies this week about the increasing risks of operating in Hong Kong, three people familiar with the plan told the Financial Times in a report Tuesday.

The warning is expected to be issued Friday and will highlight concerns about a range of threats, including China’s ability to obtain data that foreign companies store in Hong Kong. This will mark the first time the U.S. has issued a business advisory in relation to Hong Kong.

Other risks include a new law that allows Beijing to impose sanctions against both individuals or entities which were involved in making or implementing the U.S. and EU's own sanctions against China. This would include businesses with interests in both the U.S. and China and include penalties such as denying visas to China as well as blocking commercial transactions they attempt with a Chinese institution.

"[The law] is a warning to the U.S.: You should be worried. China will not endure this treatment as easily as it once did," said Wei Jianguo, a former commerce vice minister, according to an NPR report.

President Biden is also expected to update a warning issued by former President Donald Trump in 2020, adding that it will stress the legal risks that companies face unless they ensure that their supply chains are not implicated in forced labor in Xinjiang, the Financial Times noted.

Chinese foreign ministry spokesman Zhao Lijian said in a press briefing in Beijing on Tuesday that the rights of foreign investors in Hong Kong are protected by Hong Kong’s laws.

This warning is "typical political manipulation and double standards" by Washington, he said.

These expected warnings could increase concerns many businesses were already having since Hong Kong adopted the new law.

According to a Center of Strategic and International Studies report, 78% of foreign businesses in Hong Kong are concerned about the new national security laws and over 35% of these businesses are considering relocating their capital, assets, or operations.

Data from Hong Kong's Census and Statistics Department shows that 282 U.S. companies have headquarters in the region.