Paul Chan Plays Down Concerns Of US Dollar Sanctions

The Financial Secretary Paul Chan says the administration has made preparations in case Washington moves to limit the SAR's access to the US dollar in its row with Beijing over the imposition of a national security law on Hong Kong.

Such a sanction has been dubbed a nuclear option, after the White House declared that Hong Kong was no longer autonomous from China. But speaking to reporters after appearing on a radio programme, Chan said there was no need to worry too much about potential action.

"We have taken reference to the sanctions previously invoked by the US towards different jurisdictions," he said. "Some of those sanctions are trying to cause inconvenience to the targeted individual or jurisdiction - say, for example, sanctions in respect of named individuals, named institutions."

Chan said there was a response plan but he could not disclose details.

Media reports have said that if the US were to limit access to US dollar clearing, this would seriously undermine the SAR as an international financial centre and the Hong Kong dollar's peg to the US dollar.

Separately, Chan also gave reassurances that the government wouldn't maintain its stake in Cathay Pacific in the long term. He also revealed that the airline's main shareholder, Swire Pacific would be required to maintain its controlling stake until it had repaid all the rescue money provided to it by government.

This week, the government agreed to buy nearly HK$20 billion worth of special shares in Cathay Pacific as part of a HK$27 billion lifeline. Hong Kong's flag carrier has been hamstrung by the Covid-19 pandemic.