The EU Must Restrict Trade With Hong Kong’ – OpEd
The European Union is currently grappling with the state of the U.S administration and what appears to be increasing hostility toward its formal allies and closeness toward its formal adversaries. In that struggle, the bloc appears to be reconsidering its relationship with the People’s Republic of China (PRC) as an economic partner. At the same time, the union appears keen on unifying around Ukraine and throwing its resources behind the nation defending Europe from Russian encroachment. But if the EU is to ensure Ukraine’s success in this war, it also needs to go all in on de-risking from China rather than relaxing that relationship.
The PRC is known to be supporting Russia’s invasion of Ukraine by supplying its ally with intelligence, dual-use goods, and economic support to fill the gaps created by Western sanctions. While the EU has placed separate sanctions on the PRC, those sanctions do not apply to the entirety of China. This is, of course, in reference to the Hong Kong Special Administrative Region, which continues to enjoy treatment as a special customs territory and is increasingly shown to be providing Russia with the means to continue acquiring materials for use in its military1.
This issue has already been discussed in the European Parliament, with recommendations for EU member states to revoke HK’s favourable customs treatment2. While the resolution was passed on the basis of the human rights situation, the recommendation to recognise Hong Kong as being indistinct from the PRC as a customs territory comes after numerous reports and investigations found Russian state actors use Hong Kong’s business environment to acquire EU-produced goods, such as French-produced specialised integrated circuits, Swedish-produced ball bearings, and a list of dual-use sat-com equipment that continues to be found in the military equipment left behind on the battlefields in Ukraine.
For context, Hong Kong currently sends over USD 2 billion in exports to Russia and approximately one-half of that is in the form of dual-use goods. Additionally, it is easy for Russian state actors to establish shell companies in Hong Kong for sanctions evasion and replace them before EU sanctions are ever even passed. It should be clear enough at this point that Hong Kong’s government is on Russia’s side. In fact, Hong Kong officials made it clear that the city will not enforce Western sanctions, which they proved when Russian oligarch Alexei Mordashov docked his superyacht in Hong Kong back in 2022. Anyone who might have spoken up against support for Russia has been imprisoned under the draconian national security law or Article 23.
Europe is already severely underprepared for conflict with Russia. As Ukrainian president Volodymyr Zelenskyy has stated, Ukraine has the largest military force in Europe and the second largest is approximately four times smaller3. If Europe is serious about supporting Ukraine and about defending Europe’s democracy, the member states must seriously consider how its continued relationship with China and Hong Kong will undermine the bloc’s security and whether they are willing to bear that cost.
This is not an issue that is exclusive to Hong Kong. It applies to Hungary, Turkey, and several other trade partners. But as complicated as the relationship with China may be, it is the simplest to adjust.
It is time for the EU to introduce new trade restrictions on Hong Kong and they already have a fitting model to use: the trade restrictions imposed on Belarus, which face new sanctions for its role in Russia’s invasion of Ukraine. These restrictions would include the requirement that exporters include a “No Hong Kong” clause in contracts, as well as a ban on exports of goods and technology in the aviation, maritime navigation, space and defence industry, and luxury goods.
This is a crucial moment for the European Union. The current unreliability of the United States as an ally and the threat of growing conflict will put the bloc’s strength and unity to the test. Despite U.S President Trump’s claims that the EU was formed to “screw” the U.S, the truth is that the European Union was formed to ensure economic support and lasting security. For those very same reasons, it is important that the European Union surrenders the idealistic view of it appears to have of China so it can prevent the authoritarian regime from undermining the security and democratic integrity of the member states.
Endnotes:
1 https://thecfhk.org/beneath-the-harbor/
2 https://www.europarl.europa.eu/doceo/document/TA-10-2024-0051_EN.html
3 https://kyivindependent.com/ukraines-military-is-980-000-soldiers-strong-zelensky-says/
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