China warns U.S. it will retaliate on moves over Hong Kong

China said on Monday U.S. attempts to harm Chinese interests will be met with firm countermeasures, criticising a U.S. decision to begin ending special treatment for Hong Kong as well as actions against Chinese students and companies.

China’s parliament last week voted to move forward with imposing national security legislation on Hong Kong, which U.S. President Donald Trump said on Friday was a tragedy for the people of the city, and which violated China’s promise to protect its autonomy. 

Trump ordered his administration to begin the process of eliminating special U.S. treatment for Hong Kong to punish China, ranging from extradition treatment to export controls. 

But he stopped short of calling an immediate end to privileges that have helped the former British colony remain a global financial centre. 

Chinese foreign ministry spokesman Zhao Lijian said China firmly opposed the U.S. steps. 

“The announced measures severely interfere with China’s internal affairs, damage U.S.-China relations, and will harm both sides. China is firmly opposed to this,” Zhao told reporters during a regular briefing. 

“Any words or actions by the U.S. that harm China’s interests will meet with China’s firm counterattack,” he said. 

But Hong Kong shares .HSI surged more than 3% on Monday as investors took comfort that Trump did not immediately end the special U.S. privileges. 

At the close of trade, the Hang Seng index .HSI was up 3.36%, its biggest one-day percentage gain since March 25. 

“Chinese policymakers would likely want to see precisely what the US implements before responding with further policy adjustments or retaliation of their own,” Goldman Sachs wrote in a note on Sunday. 

In making his Friday announcement, Trump used some of his toughest rhetoric yet against China, saying it had broken its word over Hong Kong’s autonomy by moving to impose the new national security legislation and the territory no longer warranted U.S. economic privileges. 

Trump said China’s “malfeasance” was responsible for massive suffering and economic damage worldwide.

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