London Daily

Focus on the big picture.
Wednesday, Oct 22, 2025

China’s foreign ministry vows countermeasures over Hong Kong sanctions

China’s foreign ministry vows countermeasures over Hong Kong sanctions

Foreign ministry spokesman Zhao Lijian said US should stop interfering in Hong Kong affairs, Chinese domestic issues.

China’s foreign ministry vowed on Thursday to enact its own countermeasures in response to the United States accusing a group of Hong Kong and mainland officials of undermining the city’s autonomy with the adoption of a controversial national security law this summer.

The US State Department on Wednesday named 10 Hong Kong and mainland officials, including Chief Executive Carrie Lam Cheng Yuet-ngor, as “materially” contributing to the People’s Republic of China’s failure to meet its obligations under the Joint Declaration with the British government reached ahead of the city’s handover in 1997 and under the Basic Law, the city’s mini constitution.

“The Hong Kong issues are purely China’s internal affairs and no country has the right to make unwarranted remarks and interfere with the matter,” foreign ministry spokesman Zhao Lijian said during a press conference on Thursday, adding that China has lodged a formal protest with the US against the move.

“The US should correct its mistakes and stop interfering with Hong Kong affairs and China’s domestic politics. If the US insists on that, China will take resolute countermeasures to protect its sovereignty and national interest, and to safeguard the legal rights and interest of Chinese companies and related personnel.”

The Hong Kong government also voiced its opposition against the US move and urged the US to refrain from taking measures that might undermine the interests of the international financial system.

A government spokesman strongly reprimanded the American authorities for publishing a report that had “totally groundless and irresponsible accusations against the HKSAR”. He defended the introduction of the national security law and criticised the US’ threat to impose sanctions on financial institutions and government officials as another example of “US hegemony”.

“The US’ ‘sanctions’ will not create an obligation for financial institutions under Hong Kong law. Our financial institutions and our financial system as a whole are robust and resilient. They will continue to operate normally and smoothly despite any undue pressure from the US,” he said.

The comments from the Hong Kong and Chinese governments came as the city’s lenders, including the Hong Kong arms of China’s big state-owned banks, could soon find themselves in the firing line over the national security law.

Under the recently passed Hong Kong Autonomy Act, foreign financial institutions that engage in “significant” transactions with those individuals could face sanctions themselves, including being cut off from US dollar clearing activities. The Trump administration has 60 days to identify any banks which have done so and up to a year to enact any sanctions against those institutions.

Alfred He, an analyst at Jefferies, said the likelihood of the US sanctioning Chinese lenders is low. The exclusion of Stephen Lo Wai-chung, Hong Kong’s former police commissioner who was sanctioned in August alongside the 10 officials named on Wednesday, is an indication the US does not plan to escalate the situation further, he said.

“Instead of including more individuals on the list, they cut one,” He said. “We do not see the situation escalating at the moment.”

He cited US sanctions as a potential outlook risk in initiating coverage of several Hong Kong banks this week.

The threat of sanctions sent the shares of the city’s three currency-issuing lenders lower in trading in Hong Kong on Thursday.

HSBC, the biggest of the city’s lenders, fell 2 per cent to HK$29.90, while Standard Chartered declined 2.1 per cent to HK$35.65. Bank of China (Hong Kong) dropped 1.9 per cent to HK$21.15 and the H shares of its mainland parent fell 1.2 per cent to HK$2.48.

The imposition of sanctions has been used by the US as a way to exert maximum pressure on governments to dissuade them from engaging in nuclear proliferation or human rights violations, often by making everyday life difficult for political leaders and their families.

Because of the dominance of the US dollar as a trade currency, sanctioned individuals often face difficulty in engaging in transactions that come anywhere near the US financial system.

Banks and other businesses have paid tens of billions of dollars in fines in the past decade as the US more aggressively pursued institutions who facilitated transactions by blacklisted individuals and countries.


Chief Executive Carrie Lam is one of 10 Hong Kong and mainland officials accused by the US of helping to undermine the city’s autonomy.


E-commerce retailer Amazon.com, for example, agreed to pay a US$134,000 penalty this July to settle a civil action by the Office of Foreign Assets Control, an arm of the US Treasury Department, over failures in its screening process that allowed sanctioned individuals in Crimea, Iran and Syria to engage in transactions on its website.

As a result, global banks – not just American lenders – are particularly cautious about maintaining accounts with so-called politically exposed persons and seek to close accounts or limit their interactions with those individuals at the first hint of potential sanctions.

As tensions rose between the world’s two biggest economies this year, global banks in the city began quietly reviewing their client lists
in anticipation of sanctions and other actions between Washington and Beijing.

Banks contacted for this story declined to comment or did not respond to requests for comment.

However, some lenders in Hong Kong have already severed ties with blacklisted city officials or strengthened their reviews of any transactions going forward with those individuals, according to people familiar with the matter.

Lam said she is having trouble using her credit cards since the sanctions were announced, which she has called a “meaningless” inconvenience.
Commissioner of Police Chris Tang Ping-keung transferred his mortgage from HSBC to Bank of China (Hong Kong) days ahead of the sanctions designation.

The challenge for lenders, such as HSBC and Standard Chartered, is particularly acute as their business revolves around the flow of trade between developed and emerging markets, with the US dollar serving as a key trade currency.

Under the Hong Kong Autonomy Act, lenders who engage in “significant” transactions with blacklisted officials can be cut off from serving as a so-called primary dealer in US Treasury bonds, engage in foreign exchange transactions involving the US dollar and not receive loans from American banks.

Their senior executives also face potential travel bans and sanctions themselves.

No Chinese lenders currently serve as primary dealers to the Federal Reserve Bank of New York, but HSBC’s US arm does.

Global banks in the city also have to worry about running afoul of the national security law itself, which bars sanctions against the city or mainland China, and an “unreliable entities” list being drafted by Beijing.

Nationalistic tabloid Global Times has said HSBC could potentially be added to the “unreliable entities” list for its prior help in a US investigation into Chinese telecommunications giant Huawei Technologies.


The national security law was adopted by Beijing for Hong Kong this summer after months of anti-government protests disrupted the city.


“HSBC is caught in the crossfire of potential sanctions by the US under the HK Autonomy Act and risk of being named ‘unreliable’ by China,” Citigroup analyst Yafei Tian said in a September 22 research note. “Should it be on the list, even without tough measures taken, its mainland China business would likely be adversely impacted as its clients reduce transactions. Mainland China clients in [Hong Kong] might also avoid unnecessary transactions with HSBC HK. In a worst-case scenario, HSBC might be forced to divest its investments in mainland China.”

Standard Chartered has a similar exposure to the mainland, but it could face “less political risk” because of its involvement in the country’s Belt and Road Initiative, Tian said.

The US State Department must designate any financial institutions who engaged in those transactions within the next 30 to 60 days and the US President must enact at least five types of sanctions against those institutions within a year’s time.

However, enacting sanctions could fall to the successor to US President Donald Trump, who is trailing former vice-president Joe Biden in several national polls.

And, the sitting President has the ability to remove foreign financial institutions from sanctions if the transactions are “not likely to be repeated in the future” or have been reversed or mitigated through “positive countermeasures”.

Newsletter

Related Articles

0:00
0:00
Close
US Administration Under President Donald Trump Reportedly Lifts Ban on Ukraine’s Use of Storm Shadow Missiles Against Russia
‘Frightening’ First Night in Prison for Sarkozy: Inmates Riot and Shout ‘Little Nicolas’
White House Announces No Imminent Summit Between Trump and Putin
US and Qatar Warn EU of Trade and Energy Risks from Tough Climate Regulation
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Nicolas Sarkozy begins five-year prison term at La Santé in Paris
Japan stocks surge to record as Sanae Takaichi becomes Prime Minister
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
×