• wethepeopleofhk

Square peg in a round hole?

Updated: Apr 8, 2021


President Donald Trump's top most officials considered proposals to limit Hong Kong's peg to the US dollar as part of its response to China's draconian National Security Law imposed in the SAR last month. If the limit was to come in effect, it could spell the end of a decades long currency arrangement that has been in place since 1983.

(BusinessInsider.com, 8 July 2020)

The ancient Chinese currency had square holes in the middle...how about the next currency China takes on? Will it be digital? (See the video below)

THIS IS NOW...2021

A former chief of Hong Kong's de facto central bank has noted an improvement in the United States' attitude towards Hong Kong (HK) under the new Biden administration and expressed confidence the country will not deploy "nuclear" financial weapons on the city.

Joseph Yam Chi-kwong, head of the Monetary Authority between 1993 and 2009, said he believed that while the US had been playing hardball with China over the sweeping national security law it imposed on HK last year, the sanctions so far employed would not take a huge toll on the city's status as an international financial hub. Nor would Washington implement the so-called nuclear option of removing Hong Kong's long-standing peg to the US dollar, he argued....

....The threat of additional sanctions has loomed since last week, when China's top legislative body, the National People's Congress Standing Committee, announced a radical revamp of the city's electoral process. Critics said the moves, which included slashing the number of directly elected seats to Legco and introducing a vetting process expected to effectively sideline the opposition, left little room for dissenting voices.

(MSN/SCMP, 4 April 2021)

Protesters march in California to show solidarity with 47 pro-democracy activists in Hong Kong who were charged under the draconian National Security Law for their part in holding a pre-election primary run-off.

Joseph Yam Chi-kwong, former chief executive of the Hong Kong Monetary Authority

It is unlikely for the HK dollar to be unpegged from the US dollar, says Joseph Yam, (The Standard, 4 April 2021)

Former chief executive of the HK Monetary Authority Joseph Yam Chi-kwong said it was unlikely for the United States to break the peg that tied the Hong Kong dollar to the US dollar.

The peg between the two currencies had lasted for 38 years.

On a radio program, Yam said it was hard to predict the future of the Sino-US relationship. He said that it was "highly unlikely" for the US to weigh restrictions on capitals and control the foreign exchange given that China is the US's biggest creditor.

The former chief of Hong Kong’s de facto central bank also said there was an improvement in the US' attitude towards HK in the Biden-era and expressed confidence the [US] country will not deploy “nuclear” financial weapons on the city.

Yam believed that the US sanction deployed after the introduction of the national security law would not affect Hong Kong's status as a global financial hub. He said the current sanctions only affected the individuals listed, but not the institutes or the government.

However, the economist said HK still needed a backup plan, adding that the Hong Kong dollars can tie to other currencies if needed but he did not mean to break the tie with the US dollar.

Meanwhile, Yam also suggested that HK can play a role in internationalizing the Renminbi — the currency used in mainland China, by using the Chinese yuan in capital markets.

It is unlikely for the HK dollar to be unpegged from the US dollar, says Joseph Yam, (The Standard, 4 April 2021)


US criticizes China, affirms Hong Kong lost special status

The US State Department has sternly criticised the central and SAR governments for curtailing Hong Kong people’s freedoms, prompting SAR authorities to insist that human rights are fully protected in the territory.

In its annual human rights report examining individual, civil, political, and worker rights in different countries, the State Department says the Chinese Communist Party “has systematically dismantled Hong Kong’s political freedoms and autonomy in violation of its international commitments”.

Later on Wednesday, US Secretary of State Anthony Blinken said he had certified to congress that Hong Kong does not warrant differential treatment under a law that called for the United States to maintain a relationship with the SAR similar to that enjoyed before the 1997 handover.

The report lists a litany of “significant human rights issues”, including arbitrary arrests, political motivated reprisals against people who are located outside Hong Kong, serious restrictions on free expression, the press and the internet, and substantial interference with the rights of peaceful assembly and freedom of association.

It points out that Hong Kong people are not able to change the government peacefully through free and fair elections.

It also notes that since Beijing imposed the national security law on Hong Kong, several organs have been set up to enforce the legislation.

“Because these organs ultimately report to the Chinese central government, and mainland security personnel are reportedly embedded in some of these bodies, the ability of Hong Kong’s civilian authorities to maintain effective control over the security office was no longer clear,” the report says.

(Sources: 1. RTHK, 7 April 2021, 2. AFP/Yahoo, 31 March 2021)

Related information:

Treasury Sanctions Individuals for Undermining Hong Kong’s Autonomy, (US Department of the Treasury, 7 August 2020)

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The SAR government has arrested and imprisoned a massive number of Hong Kong activists in a campaign of political persecution. Any one with a dissenting voice is being targeted.

(Photo: AFP)

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