How Worried Should We Be About Hong Kong?

China’s imposition on Hong Kong of a new security law will trigger only economically insignificant responses from the US. In a presidential campaign year in which no candidate can seem to be “soft on China,” there will be loud rhetoric, but only trivial sanctions and changes to the terms of trade. Neither nation will be willing to fall into a vicious cycle of tit-for-tat that could abort a nascent post-pandemic recovery. That is why China has acted now, even though Hong Kong’s constitution has allowed it for over two decades. This won’t derail the “risk-back-on” move from the March bottom. But it leaves China still having to successfully manage its brand in the post-pandemic global economy.