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A review of the Phase 1 deal had initially been has since responded with sanctions of its own on
scheduled for August 15, but was postponed 11 US citizens, including a number of legislators.
owing to timetabling issues. No new date for Following Washington’s round of sanctions
the review has been set as yet, but the delay gives China was keen to note that it remained commit-
China more time to scale up its purchases of US ted to fulfilling its obligations under the Phase 1
energy. deal. People’s Bank of China governor Yi Gang
However, even if this happens, and the US said on August 9 that deteriorating bilateral
is understanding about the setbacks China suf- relations would not stand in the way of Beijing’s
fered as a result of COVID-19, other causes of promises.
tension between the two countries could end up “No matter how the international situation
derailing the deal. changes, the most important thing is to get our
own things done and to firmly deepen financial
Political tensions reform and opening-up,” the official Xinhua
The two countries’ disagreement over trade has newswire quoted Yi as saying on August 9. “First
deteriorated over the last two years into a more of all, we will continue to implement the Phase 1
generalised geopolitical tug of war. China and trade deal with the US.”
the US now find themselves increasingly at log- Tensions, however, only show signs of ramp-
gerheads over sovereignty issues such as Hong ing up further, now that the US has announced
Kong, Taiwan and the South China Sea. that a major new arms deal with Taiwan has been
The mainland government’s introduction of given the green light.
Hong Kong’s national security law on June 30 The United States Defense Department
sparked outrage in the US, with Washington announced on August 14 that the US Air Force
condemning the move as severely undermining would award a contract for 90 F-16 fighter jets to
the city’s autonomy as set out in the handover Lockheed Martin as part of US foreign military
agreement China signed with the UK in 1984. sales. Of that figure, 66 will head to Taiwan under
That agreement enshrined the concept of “One a deal first unveiled last year.
Country, Two Systems”, which guaranteed Hong The announcement of the deal’s closing came
Kong certain rights and freedoms for 50 years. hot on the heels of US Health and Human Ser-
Beijing’s newly implemented national secu- vice Secretary Alex Azar’s visit to the island.
rity law introduces severe punishments for Azar’s trip made waves with Beijing, as he was
crimes of secession, subversion, terrorism and the highest-ranking US official to have visited
collusion with foreign forces. Critics note that Taiwan in the last four decades. China promptly
the legislation effectively eliminates free speech, began military exercises around the median
while also granting powers to the police without point in the Taiwan Strait, with fighter jets of its
the need for judicial oversight. own even crossing the line.
Accordingly, US President Donald Trump If Sino-US tensions continue to rise, espe-
signed on July 14 the Hong Kong Autonomy cially in the run-up to the US presidential
Act that targets individuals Washington believes elections this year, China may lose interest in
have undermined the city’s autonomy. This has honouring all aspects of the trade deal. The
led the US to impose sanctions on Hong Kong commercial and political realities of significantly
Chief Executive Carrie Lam and 10 other senior ramping up purchases of US crude may prove
officials from both the city and mainland. China too much for Beijing to swallow.™

Week 33 20•August•2020 www. NEWSBASE .com P11