00:00Scott, I'd like to yield five minutes to the senator from Oregon.
00:03Thank you very much, Mr. Chair, and thank you for putting this hearing together.
00:07And I'm struck about the similarity between what you're all presenting here,
00:12what is presented before the China Commission,
00:15which both then-Senator Rubio and I had turns in chairing,
00:20and what came in the last September in the Committee for Freedom in Hong Kong.
00:26Perhaps we'll see all of you at the third annual gathering of that here in September.
00:32And some of the things you mentioned, just continuous strike a chord,
00:36Ms. Su, that lighting a candle is a crime.
00:41That suggests how dramatically Hong Kong has changed.
00:46And Ms. Richardson, your support for investigating crimes against humanity
00:52that China's involved in, including against the Uyghurs,
00:55and I co-wrote the Uyghur Forced Labor Prevention Act.
01:01I would like to see other countries adopt a similar presumed assumption
01:05that things that are made in certain areas of China have been made with slave labor.
01:10We have a safe harbor for companies to prove that it's not.
01:14But it's really, I think, the only effective answer, and only America has taken it.
01:19So we see goods rejected here are shipped to Canada, which is unacceptable.
01:25Ms. Sinos, your 21 recommendations.
01:30And Ms. Gallagher, your fierce conversation about the inhumanity of the way that Mr. Lai has been treated.
01:42His son, Sebastian, has come up here repeatedly, and along with others, to keep making that case.
01:50There are two bills that this committee, and I think, Mr. Chairman, you mentioned in your opening remarks,
01:54so I wasn't here.
01:56The Hong Kong Judicial Sanctions Act, with Senator Sullivan and Curtis and myself are leading it,
02:02mandate sanctions on Hong Kong judicial officials complicit in human rights abuses.
02:08Do any of you support that, getting that done?
02:13I see nodding heads across the board.
02:17The second is the Stop CCP Money Laundering Act.
02:21Senator Curtis and I are co-leading that.
02:24And one of you mentioned money laundering as a significant factor.
02:28Does anyone see any reason not to proceed with getting that passed?
02:33Mr. Chairman, I really appreciate your suggestion that our failure to pass legislation out of foreign relations on Hong Kong
02:42would be an implicit statement about our lack of concern.
02:47I don't want that to happen.
02:48So I hope we'll build on the foundation of those bills and many of the ideas that are presented here today to proceed.
02:55One thing that has really troubled me is the persistent business activity that Hong Kong has so valiantly tried to sustain
03:06and to give themselves cover.
03:09And, of course, it's kind of a key vulnerability if companies were to translocate.
03:16Is there any sort of strategy in the works to try to move the financial operations, the firms that participate,
03:25and say it's really unacceptable to be locating and contributing to what China has done in Hong Kong?
03:32It's not business as usual in Hong Kong, and we all know this here, but I think many businesses would prefer to look the other way.
03:43We have to make it so that they can't look the other way.
03:46And this is a huge part of the reason why I have long advocated for a primary money laundering concern designation,
03:54especially for subsets of transactions or specific institutions, because that has the potential to shift risk.
04:01And we know this because a primary money laundering concern designation was used against North Korea,
04:06and the banks said, oh, my goodness, we're not going to touch Bank of Delta Asia
04:10once it had that primary money laundering concern designation issued.
04:14We need to start doing that for Hong Kong, because businesses are continuing to buy the propaganda from John Lee
04:21and others that Hong Kong is just fine.
04:24But we know that they are actively supporting Russia's war of aggression against Ukraine.
04:29They're actively supporting other rogue actors like Iran and North Korea.
04:33And we know this because of a fabulous report that Sam Pickett did called Beneath the Harbor,
04:38which I would encourage, if it's possible, to submit that entire report to the record if it's possible.
04:44Mr. Chairman, we ask that the report be submitted for the record.
04:47Without objection.
04:49Anybody else like to weigh in on this?
04:51Yes.
04:52Just in relation to business, Senator Merkley, it's very important to say I briefly referred to what happened to Apple Daily.
04:57And what's happened with Apple Daily is state-sponsored theft of a hugely successful business.
05:03So as well as being, of course, a real blow to press freedom, it's also a real cautionary tale for the over 1,300 U.S. businesses
05:11which currently operate in Hong Kong, the 84,000 U.S. citizens currently based in Hong Kong.
05:16Because so vaguely defined are the offences under the national security law that anyone who's operating in that environment is at real risk.
05:26And what I would also say is that what we see with Hong Kong is it essentially becoming a bay of broken promises,
05:33a safe harbour for human rights violators, and it's essentially an authoritarian regime masquerading as a free market, free trade hub,
05:43the finest laundromat for cleaning money in the East.
05:46And I'm always struck by those very powerful words which former Congressman Mike Gallagher used where he described
05:52golden blindfolds being worn by individuals staring at the windows of their glass offices onto Victoria Harbour.
05:59And I think it's really critical because we know how important it is to Hong Kong and to China
06:05to have Hong Kong seen as a place where it's safe to do business.
06:08And we must keep calling out the fact that in its current guise, it is not a safe place to do business.
06:15And could I also ask that we read into the record, there's a very powerful piece which was recently written
06:21by the Committee to Protect Journalists on why what's happening under the national security law
06:26in eroding press freedom is also bad for business.
06:30It's from the 30th of June, and they pointed out that actually Hong Kong's economic boom happened
06:36because journalists could work without interference,
06:38and that what you now have is fading financial appeal in part because of Hong Kong trying to continue being seen as an international financial centre
06:49in circumstances where it has such gross restrictions on information and such a crackdown on press freedom.
06:55So it's bad for press freedom, it's also bad for business.
06:58Mr. Chairman, can we put that report on the record?
07:01And could I follow up one point here?
07:03I know I'm over time.
07:05So as we think about the manufacturing that goes on with the Uyghurs in China,
07:10we're able to say to companies, consider moving to Vietnam,
07:14not that their human rights record is perfect,
07:17but we're continuing to work closely with Vietnam
07:20and hopefully to see a much better situation there than with the Uyghurs
07:27or other places in Asia that have the potential for the same sort of manufacturing.
07:35But is there an alternative for the financial centre in Hong Kong
07:39where we can say to a business,
07:41you could be in Kuala Lumpur
07:45or could be where, you know,
07:47is it partly that there's no like magnet alternative
07:51that keeps these big companies doing their financial business in Hong Kong?
07:55Is there no, is there not a feasible alternative?
08:03I'll try to answer both those questions.
08:05Olivia will do a better job on the alternative location question.
08:09But Senator Merkley, just very quickly, first of all,
08:11thank you for all of your hard work with the CECC.
08:13But the story of the last 40 years involves a lot of U.S. business activity
08:19and money flowing into China
08:21as the Chinese government got progressively more repressive.
08:24And as extraordinary an accomplishment as the UFLPA is,
08:29it should not have taken credible allegations of crimes against humanity
08:33and genocide to get us to that point.
08:37You know, we've had 40 years of occasionally a story floats up
08:42that, you know, X American company has been found using forced labour
08:45or, you know, Y company is dealing with labour unrest inside China.
08:51What are we waiting for?
08:52These variables, I think, are extremely clear.
08:55And that unless and until U.S. companies and any companies
08:59are required to show that they are not part of the problem,
09:03we're going to keep having this conversation
09:05and we'll only be able to pass laws
09:08when the situation has gotten exponentially worse than it should have.
09:12You know, this is not the direction
09:13everybody wanted to convince themselves we were going in post Tiananmen.
09:17The argument was, let businesses invest,
09:20people will make money, repression will lessen,
09:23it'll all get better.
09:24That's not how it's turned out.
09:29I'm so glad Sophie raised UFLP.
09:31I have lots of thoughts on that, but I won't address that.
09:33I'll go ahead and address,
09:34I think Singapore has been offered as a credible alternative.
09:37It has its drawbacks because it's very close with China and the CCP.
09:41But that has been the one that has come up most frequently.
09:44I think, though, we should be encouraging folks
09:46to just be more focused on, like, the U.K. and the U.S.,
09:49which are the stronger financial centres
09:51to be focused on at this particular juncture.
09:54And I think that that should be an area of focus.
09:57I believe in the resilience of the market.
09:59I believe that businesses can be agile and can change directions.
10:03They're just choosing willfully to look the other way
10:06in the face of, as Sophie pointed out,
10:08just incredible evidence of ongoing genocide
10:10and crimes against humanity for Uyghurs,
10:12the near dissolution of freedom overnight in Hong Kong.
10:15I mean, it's fairly breathtaking over the last several years.
10:18So I think we're beyond the point of kind of saying,
10:21it's okay, businesses, you just didn't know.
10:23They absolutely know and are continuing to look the other way.
10:25I would love to see a press story
10:27in which 25 major financial companies altogether say,
10:30we are moving to Singapore,
10:33and we're doing it six months from now.
10:35If X, Y, and Z don't change,
10:37we need some kind of shockwave to change the dynamic.
10:42Well, and it's going to require folks like Jamie Dimon,
10:45you know, JPMorgan and Chase,
10:47who's continuing to underwrite, you know,
10:49public offerings for Hong Kong companies to say,
10:51I'm not doing that anymore.
10:53We can't verify this because the rule of law is so undermined.
10:57And they have to stop coming
10:59when John Lee invites them for big,
11:01flashy business conferences
11:02where there's just tons of executives lining up.
11:07Thanks so much.
11:07I'm waiting for a line of question.
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