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US slaps sanctions on Hong Kong leader in new offensive on China

In the most significant US action on Hong Kong since Beijing imposed a tough security law, the Treasury Department said it was freezing US assets of Chief Executive Carrie Lam and 10 other senior officials.

FILE: Hong Kong Chief Executive Carrie Lam reacts during a press conference in Hong Kong on 5 August 2019. Picture: AFP

WASHINGTON - The United States slapped sanctions Friday on Hong Kong's top leader, a new salvo in a major escalation against Beijing after ordering sweeping restrictions on Chinese-owned social media giants TikTok and WeChat.

In the most significant US action on Hong Kong since Beijing imposed a tough security law, the Treasury Department said it was freezing US assets of Chief Executive Carrie Lam and 10 other senior officials.

The move also criminalises any US financial transactions with the 11 officials, who include Hong Kong's police commissioner, its security secretary and China's top official in the international financial hub.

"Today's actions send a clear message that the Hong Kong authorities' actions are unacceptable," Secretary of State Mike Pompeo said in a statement.

Pompeo said the law - which bans subversion and other perceived offenses - violated promises made by China before Britain handed back the territory in 1997.

"The United States stands with the Hong Kong people," Pompeo said.

The Treasury Department said Lam "is directly responsible for implementing Beijing's policies of suppression of freedom and democratic processes."

The security law imposed in late June has sent a chill through Hong Kong, which saw massive and sometimes destructive pro-democracy protests last year.

Authorities have since delayed elections, citing the coronavirus pandemic and, according to Beijing, issued arrest warrants for six pro-democracy activists living in exile.

CLOCK TICKS FOR TIKTOK

The tough new measures come three months ahead of US elections, in which President Donald Trump is trailing in the polls.

Critics say that his hardening turn on China is meant to deflect blame from his own handling of COVID-19, from which the United States has suffered the deadliest toll of any country.

Late Thursday, Trump made good on threats against WeChat and TikTok - two apps with major audiences.

In an executive order, Trump gave Americans 45 days to stop doing business with the Chinese platforms, effectively setting a deadline for a potential, under-pressure sale of TikTok to Microsoft.

The president cited national security concerns for the moves, which also threw into doubt the American operations of WeChat's parent firm, Tencent, a powerful player in the video gaming industry and one of the world's richest companies.

China voiced outrage at the move, which comes as Trump also steps up pressure on the trade and security fronts.

"At the expense of the rights and interests of US users and companies, the US... is carrying out arbitrary political manipulation and suppression," Chinese foreign ministry spokesman Wang Wenbin said.

TENCENT DIVES

The new restrictions sent Tencent shares into a spin, with the issue tanking as much as 10% at one point in Hong Kong trade, wiping almost $50 billion off its market capitalisation.

Trump's order claims TikTok - whose kaleidoscopic feeds of short video clips feature everything from hair-dye tutorials to dance routines and jokes about daily life - could be used by China to track the locations of federal employees, build dossiers on people for blackmail and conduct corporate espionage.

TikTok, which has repeatedly denied sharing data with Beijing, said it was "shocked" by the order "issued without any due process."

The app owned by Chinese-based ByteDance vowed to "pursue all remedies available to us in order to ensure... our company and our users are treated fairly."

WeChat is a messaging, social media and electronic payment platform and is reported to have more than a billion users, with many preferring it to email.

REPERCUSSIONS FOR US?

Daniel Castro of the Information Technology and Innovation Foundation, said the US actions were likely to be counterproductive.

"There is no security justification for banning an app merely because it is owned by a Chinese company," Castro said.

"Allegations of security risks should be backed by hard evidence, not unsubstantiated innuendo. American tech companies stand to lose significant global market share if other countries follow a similar standard and block US tech companies from their markets because of concerns about US government surveillance."

Trump has effectively set a deadline of mid-September for TikTok to be acquired by a US firm or be banned in the United States, leading Microsoft to accelerate its talks to buy it.

The TikTok mobile app has been downloaded about 175 million times in the US and more than a billion times around the world.

The latest US actions follow a protracted battle over Huawei, the Chinese network and smartphone giant accused by the Trump administration of being a tool for espionage.

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