Companies may reconsider their Hong Kong headquarters after China passed a sweeping national security law that critics say has stripped the city of its autonomy and civil freedoms, according to Commerce Secretary Wilbur Ross.
"I believe that there's a good chance that all companies who have used Hong Kong as their headquarters for Asia will begin to rethink whether the new rules, the new relationship between Hong Kong and mainland China, whether those rules let Hong Kong be as favorable a place to have headquarters as it used to be," Ross said Wednesday during an interview with FOX Business' Maria Bartiromo.
Under the law, which took effect on Tuesday evening, individuals in Hong Kong found guilty of secession, subversion or terrorism will now be sentenced to life in prison. The passage of the law by China's rubberstamp Congress comes one year after last summer's chaotic and frequently violent anti-government protests.
"We obviously think it's a gross violation of human rights," Ross said. "It's also a gross violation of the original treaty under which they turned Hong Kong over from the British to the Chinese."
Hong Kong, a former British colony, was returned to China in 1997 under an agreement known as “one country, two systems,” which allowed the city to retain a “high-degree of autonomy” for 50 years. The agreement expires in 2047.
Earlier this week, the U.S. began to revoke Hong Kong's special trading status, halting defense exports and restricting the city's access to high technology products.
"That's why we're doing away with Hong Kong's special status, in terms of our trade relations," Ross said. "China has made Hong Kong no longer a special haven. If it's not special to the Chinese, it shouldn't be special to us."