Hong Kong's National Security Law Still Limiting Freedoms, Trade, EU Says

The European Commission this month released its annual report on political and economic developments in Hong Kong, saying the region continues to see a decline in “fundamental freedoms,” partly caused by its National Security Law. The bloc reminded industry that several EU trade restrictions in response to the law remain in force, including “scrutiny and limitation of exports of sensitive equipment.” The EU also said Hong Kong’s trade and logistics sector “contracted” over the past year. Hong Kong's GDP from its import and export industry fell by 6.9% in the first half of 2022 compared with the same time period in 2021, and “external trade in goods” dropped 4% year over year in the first 10 months of 2022, the report said.

The EU also noted that the Closer Economic Partnership Arrangement with mainland China is Hong Kong’s “most substantial trade agreement,” and there were no major amendments to the agreement during 2022. The value of goods reexported through Hong Kong to mainland China accounted for about 90% of Hong Kong's total reexport trade value, based on 2021 data, the report said.