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As part of the handover agreement, Beijing said it would allow Hong Kong to operate under the principle of “one country, two systems” for 50 years following the transfer.
The deal allowed Hong Kong to operate under separate governmental, legal, economic and financial systems from mainland China, at least until this year.
Beijing passed a security bill on May 28, 2020, that bypassed Hong Kong’s legislature, undercutting the “one country, two systems” principle.
Afterward, "no reasonable person" can maintain that Hong Kong still has a high degree of autonomy, U.S. Secretary of State Mike Pompeo told Congress.
As a result, U.S. lawmakers are reconsidering the U.S.-Hong Kong Policy Act, passed in 1992, which gives the city economic benefits including access to key U.S. technologies and protections against tariffs on its exports. Those advantages helped Hong Kong become a global financial hub that rivals London and New York.
Hong Kong’s economy is closely intertwined with mainland China, and mainlanders account for seventy-six percent of all tourist arrivals. Private consumption is the biggest contributor to gross domestic product, accounting for more than 70 percent.