Today the markets awoke to troubling news from East Asia. The Chinese equivalent to a Parliament is pushing ahead with legislation that will severely limit the independence of Hong Kong. The law will criminalize sedition, secession, and any forms of criticism of the Chinese government. It will also give China the right to oversee security in Hong Kong, which could mean increased Chinese police presence.
The law goes against the current “one country, two systems” structure, which allows Hong Kong to maintain a degree of independence while still technically being a Chinese dominion. There has been harsh criticism against the new law from pro-democracy leaders in Hong Kong. The protests that marked much of 2019 might start anew, despite the coronavirus security measures.
The United States, which was already engaged in a spat with China over the coronavirus, is now proposing legislation to protect Hong Kong and sanction China over the new bill, if implemented.
For the first time in a few decades, China officially revised its growth projection downward. Earlier in the year President Xi Jinping spoke about China still meeting its annual goals despite the pandemic, so this new revision shows the government is spooked by lagging growth.
Based on all of this news and the growing tensions in Asia, today the stock markets are in trouble, with indices going down left and right. Hong Kong and China’s markets are affected the most, but the rest of the world will likely follow.
Even oil prices, despite having stabilized this week, turned towards a decline today. The WTO dropped to $31.99, while the Brent reached $34.34 as of the time of this article’s publication.
