When the US considers treating Hong Kong as if it is China

Today, US Secretary of State Mike Pompeo, under the provisions of United States-Hong Kong Policy Act of 1992 and the Hong Kong Human Rights and Democracy Act (HKHRDA) of 2019, reported to Congress that Hong Kong no longer merits separate treatment from China under US law.

My quick thoughts:-

1. The US stance is more like "Hong Kong is now a lost cause. Let's cut losses, stop pretending it's autonomous, and stop China from exploiting this loophole".
   
   
2. This is bad for the Hong Kong economy. After this, what's the point after all to pay Hong Kong rent and Hong Kong wages?
   
   If you don't really need links to the US market, you might as well move to Mainland China. It'll not be too different from Hong Kong by then, but you at least will be in a larger market with lower labour costs.
   
   If you do need links to the US market, then being in Hong Kong will be no better than being in Shanghai very soon. You might as well start planning your relocation: Singapore? Tokyo? Taipei? Even... Manila or Bangkok?
   
   
3. This is bad for HK's freedoms in the short to medium term too. I'm afraid things will only get worse - for at least a few years - before it starts getting better.
   
   Since the demise of our manufacturing sector, Hong Kong's economy in the last 20 years or so has been built around being the conduit of China-Western trade and investment flows. This is founded on unspoken mutual consent - which is now no more.
   
   This will be a vicious spiral: the more the US deals with Hong Kong the way it deals with the rest of China, the lower Hong Kong's value to China will become, and the less China would be willing to keep HK distinct... and so on.
4. This is, in a way, a classic example of how brinkmanship can unfold.
   
   When Congress enacted the HKHRDA's in November 2019, it has an annual certification mechanism that was designed, of course, to deter China from changing the status quo further.
   
   Then China pushed on with imposing a national security law in Hong Kong, betting on a muted response from the US.
   
   Then the US, with remarkable efficiency, started the HKHRDA processes in a matter of days,  probably in the hope of watering down the law's text.
   
   And one could (only) guess how this would end.

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Links:

• BBC: "Hong Kong 'no longer autonomous from China' - Pompeo", 27 May 2020