Hong Kong chief Carrie Lam is stockpiling money due to US sanctions

The restrictions additionally stop Lam from holding any US-based belongings.

“I am utilizing money on a regular basis for all of the issues,” Lam instructed Hong Kong Worldwide Enterprise Channel on Friday. “I’ve piles of money at house. The federal government is paying me money for my wage as a result of I haven’t got a checking account.”

Lam’s revelation reveals simply how hamstrung she’s turn out to be by the restrictions. In August, she instructed Chinese language state broadcaster CGTN that she hadn’t been to the USA in years and that the sanctions have been “actually meaningless.”

In one other interview with the South China Morning Submit printed Sunday, Lam stated that she solely withdraws a part of her wage and retains it in a drawer in her home, with the remainder of the cash saved within the Hong Kong Treasury. Lam earns 5.2 million Hong Kong {dollars} ($672,200) a yr, in line with the federal government.

The US-China rivalry in tech and trade won't end because Joe Biden is president

Requested by CNN Enterprise concerning the sanctions on Lam, China’s international ministry stated Tuesday that the nation “firmly opposes” US motion.

“No international nation has the appropriate to make irresponsible remarks or intervene in Hong Kong’s affairs,” China’s Ministry of Overseas Affairs stated in an announcement. “China will take all resolute countermeasures to safeguard nationwide sovereignty and safety pursuits and the official rights and pursuits of Chinese language residents.”

Lam’s feedback have additionally sparked a debate in China about how far-reaching the US authorities’s punishment is. The subject has attracted greater than 2.5 million views and 500 discussions on Weibo, the Chinese language social media platform.

“Cannot Chinese language banks simply assist Lam?” wrote one Weibo person going by the deal with “Mr Luo commenting on Regulation.”

In a workers report printed Sunday, the World Instances, a state-run tabloid, wrote that Lam’s case is “a reminder that China’s nationwide sovereignty and safety is at stake with US dominance in world monetary transactions.”

Lam’s drawback might have lots to do with how a lot sway the US greenback — the world’s reserve foreign money — has on the worldwide monetary system.

Chinese language banks could also be afraid of dealing with US sanctions themselves ought to they work with Lam, in line with Terence Chong, affiliate professor of economics on the Chinese language College of Hong Kong. That would price them entry to the greenback.

“They’ve lots at stake,” Chong instructed CNN Enterprise. “They simply need to adjust to the US guidelines.”

The sanctions didn’t explicitly spell out whether or not Washington would punish international monetary establishments for working with Lam and others who have been singled out by the US authorities.

However consultants from the regulation agency Mayer Brown identified in an August report that the actions “can have implications for each US and non-US individuals, together with international monetary establishments, who’ve dealings with these people.”

The World Instances additionally famous the significance of the US greenback to SWIFT, the messaging service that strikes cash across the world banking system. Banks depend on SWIFT for clearing US greenback transactions.

Citing a monetary knowledgeable, the World Instances famous that the greenback’s dominance in such arenas “leaves China weak to US sanctions.”

The query of how a lot the USA might use the dollar to strain China isn’t a brand new one, both. Earlier this yr, for instance, Bloomberg reported that the Trump administration briefly entertained methods to undermine the Hong Kong greenback’s peg to the US greenback as tensions between Washington and Beijing escalated.

Analysts have famous that the USA might theoretically reduce off Chinese language banks from accessing the US monetary system fully. However any sort of monetary struggle might trigger chaos, and finally harm the USA. China is likely one of the largest holders of US Treasuries.

Analysts do not count on drastic adjustments to US-China financial relations when President-elect Joe Biden takes workplace in January. However they’ve identified that Biden’s tone will probably be lots much less fiery than President Donald Trump’s.

— CNN’s Beijing bureau contributed to this report.