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Following the US sanctions in August against Hong Kong officials seen as undermining the city’s autonomy and freedom, China is reported on Wednesday by state media to sanction 28 US individuals including Pompeo, Navarro, John Bolton and Stephen Bannon. 

Earlier in the week, Beijing announced that it would target American personnel in response to Washington’s bans triggered by mass arrests in Hong Kong.

”US efforts to forge stronger links with Taiwan will also be met with retaliatory action”, the Chinese foreign ministry said.

Chinese foreign ministry spokeswoman Hua Chunying said the United States had “blatantly intervened” in Hong Kong by imposing sanctions on six mainland Chinese and Hong Kong officials over the mass arrest of more than 50 pro-democracy politicians and activists in the city.

Hua said Beijing would impose reciprocal sanctions on US officials who were “primarily responsible for the vile actions on Hong Kong” and their family members.

“The US must immediately stop interfering in Hong Kong’s affairs and immediately stop using various pretences to interfere in China’s internal affairs, endangering China’s national security,” she said, adding the US was going along a path of “error and danger”

Market implications

The relationship between the US and Taiwan has rustled the feathers of Beijing as the outgoing administration has strengthened its ties of late, including through arms sales and official’s visits. 

Antony Blinken, US President-elect Joe Biden’s nominee for secretary of state, on Tuesday promised major changes after four years of Donald Trump’s foreign policy but stressed one priority will remain the same … China.

Also, Treasury secretary nominee Janet Yellen said on Tuesday, that the US is prepared to “use the full array of tools” against “abusive” Chinese practices.

All in all, officials have been projecting a tough stance on the bilateral trade row under Biden. 

Markets will be on standby for escalation of the trade and curreny wars.