So is this just another worthless letter?
Everything pisses off china.
“So is this just another worthless letter?”
From Conservative Treehouse today:
“The Hong Kong Human Rights and Democracy Act would require the State Department annually re-certify Hong Kong’s autonomous nature, in order for the so-called “special treatment” the U.S. affords Hong Kong to continue.”
As Kyle Bass has pointed out in detail, China depends on the free exchange of the Hong Kong Dollar, to obtain the great bulk of the hard foreign exchange that it needs. If Hong Kong is no longer granted its currently recognized Sovereign Status, it would likely be a fatal blow to the financial system that keeps mainland China’s financial house of cards from collapsing.
The Chinese economy has a debt load that makes Greece look like Switzerland by comparison - the largest debt bubble in human history, and much of it spent on things that will never be able to pay back the loans (ghost cities, zombie factories). More than half of China’s industrial companies are currently at risk of even being able to cover the interest payments on their debt, and their banking system is rife with fraud.
Domestically, they can manipulate everything in their totalitarian system. But to buy the oil, gas food and raw materials that they need to import, they need hard currency - real money, like Euros or Yen; but 80% of their foreign exchange needs are US Dollars. The Mainland’s Monoply money (Yuan or Renminbi, which they have printed recklessly) is not freely exchangable with the World’s hard currencies. Only the Hong Kong Dollar is, and that depends entirely on the Western Nations formal recognition of Hong Kong as politically autonomous.
The annual certification required by this law, means that every year there will be an opportunity to send the Chinese economy crashing into an epic contraction and loss of wealth. It is a financial knife against the Chicom’s throats.