Hong Kong Is Becoming Hub for Financial Crime, U.S. Lawmakers Say
The U.S. should rethink its close ties with Hong Kong’s banking sector, leaders of an influential House committee say
3 min
Leading China hawks in the U.S. House of Representatives are calling for a rethink on whether Hong Kong should continue to enjoy the cozy banking relationship it has with the U.S., saying the city is becoming a hub for money-laundering and sanctions evasion.
Hong Kong has turned into a major centre for the export of controlled Western technology to Russia; the creation of front companies to buy Iranian oil; the managing of “ghost ships” that serve North Korea, as well as other violations of U.S. trade controls, the bipartisan leaders of the House Select Committee on the Chinese Communist Party said in a letter to Treasury Secretary Janet Yellen .
The letter was signed by Rep. John Moolenaar , a Michigan Republican who chairs the committee, and Rep. Raja Krishnamoorthi , an Illinois Democrat who is the committee’s ranking member. The Wall Street Journal reviewed a draft of the letter, which was publicly released Monday.
“Hong Kong has shifted from a trusted global financial centre to a critical player in the deepening authoritarian axis of the People’s Republic of China, Iran, Russia and North Korea,” the lawmakers said. “We must now question whether longstanding U.S. policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate.”
The lawmakers cited research, for example, that shows that nearly 40% of goods shipped from Hong Kong to Russia in 2023 were high-priority items such as semiconductors that Russia could use to prosecute its war in Ukraine.
Both lawmakers have worked extensively in the past with President-elect Donald Trump ’s pick for secretary of state, Sen. Marco Rubio of Florida, on China-related issues, including efforts to force TikTok’s Chinese owners to sell the app.
The allegation that Hong Kong is a money-laundering hub is unfounded, a spokesman for the Hong Kong government said. The spokesman added that Hong Kong has a vigorous enforcement system to prevent the illegal diversion of strategic commodities. A representative for Yellen didn’t respond to a request for comment.
The two lawmakers, whose committee focuses on competition with China and frequently makes bipartisan calls for a tougher approach to the country, asked Treasury for information on how it intends to combat money-laundering and sanctions evasion that use Hong Kong’s financial system.
Hong Kong, which has a special status within China, has seen its role as a global financial hub increasingly come into question as Beijing has muscled the city closer into its orbit, driving an exodus of expatriates. U.S. officials in particular have condemned Hong Kong authorities’ crackdown on dissidents under a tough national security law, though many Western banks have continued to do some business there.
Last week, a court in Hong Kong sentenced dozens of pro-democracy advocates for what Communist Party leadership viewed as subversion under that law. The Biden administration has called for their immediate and unconditional release. The government of the Hong Kong special administrative region said attacks on the “fair and open” sentencing are smears.
The same day, a Hong Kong government-sponsored financial summit played host to a number of global financial leaders, including Goldman Sachs Chairman David Solomon , Citi Chief Executive Jane Fraser and State Street CEO Ronald O’Hanley , according to a program of the event. Leaders from HSBC , BNP Paribas and other institutions also attended.
Banking leaders didn’t publicly discuss the court proceedings on the summit’s panels. A spokesman for State Street confirmed O’Hanley’s attendance. A spokeswoman for Citi declined to comment. Representatives for the other banks didn’t respond to requests for comment.
Earlier this month, Moolenaar and Krishnamoorthi called on the Biden administration to sanction Hong Kong police, judges and prosecutors for their role in the arbitrary detentions of human-rights activists.
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Australian shares fell on Thursday as Wall Street weakness, rising oil and persistent rate concerns weighed on most of the market. The S&P/ASX 200 declined 0.72 per cent to 8,702. The All Ordinaries lost 0.66 per cent to finish at 8,897. Mining stocks were hit particularly hard, while real estate also dragged on the index. …
Continue reading “ASX falls 0.7 per cent as miners and property stocks retreat”
2 minAustralian shares fell on Thursday as Wall Street weakness, rising oil and persistent rate concerns weighed on most of the market.
The S&P/ASX 200 declined 0.72 per cent to 8,702. The All Ordinaries lost 0.66 per cent to finish at 8,897. Mining stocks were hit particularly hard, while real estate also dragged on the index.
Energy was the notable exception, gaining more than one per cent as Brent crude traded above US$103 a barrel. Oil had moved higher amid uncertainty surrounding potential US diesel-export restrictions and broader geopolitical supply risks. The move supported energy producers but renewed concern about inflation inputs across transport and the wider economy.
Gold shares were weak even as spot bullion remained historically elevated. The All Ordinaries Gold index fell about 2.25 per cent, showing that equity performance can diverge from the commodity because of valuation, currency, operating and company-specific factors.
Zip was a prominent loser, falling 11.38 per cent after the company reported short sales after the previous close. Nine Entertainment also weakened after UBS analysts warned of near-term revenue challenges associated with its advertising-supported subscription tier.
Premier Investments led larger winners despite caution about the retail environment. Breville, in which Premier owns a significant stake, also appeared among leading movers. In the broader ASX 300 screen, Myer gained 11.43 per cent and MAAS Group rose 7.93 per cent, while Lotus Resources fell 10.53 per cent. These percentage moves should be checked against company announcements and trading liquidity before attributing causes.
The Australian dollar was broadly flat at US70.38 cents. Spot gold was around US$4,280 an ounce, Brent crude approximately US$103.08 a barrel and iron ore near US$96.90 a tonne late in the session.
The rate outlook remains the central domestic catalyst. Labour-market weakness has not eliminated the possibility of an RBA increase next week, leaving banks, listed property and other rate-sensitive sectors exposed to changing expectations.
Market dashboard
S&P/ASX 200: 8,702, down 0.72 per cent.
All Ordinaries: 8,897, down 0.66 per cent.
Best sector: Energy, up more than one per cent.
Weakest areas: Real estate and materials were the major drags; confirm final sector percentages before publication.
Material winner: Premier Investments led the large-company gainers. Confirm its final closing move from the ASX before publication.
Material loser: Zip, down 11.38 per cent.
ASX 300 percentage leader: Myer, up 11.43 per cent.
ASX 300 percentage laggard: Zip, down 11.38 per cent.
AUD/USD: Approximately US$0.7038, broadly flat.
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