6 to 13 July: Relations wane between Beijing and the West

In response to China’s security crackdown in Hong Kong, France and Germany have proposed new retaliation measures to the EU. These new measures include granting political refuge for activists, offering additional scholarships for Hong Kong students and also banning the export of police equipment such as tear gas.

Since Hong Kong’s security law was enacted, Canada and Australia have suspended their extradition treaties with Hong Kong. Whilst Australia has also offered to extend visas to Hong Kong residents by five years – providing a pathway to permanent residency for up to 10,000 people. In a similar vein, the UK has promised to offer nearly 3 million Hong Kong residents with British national overseas status. It’s clear that international relations with Beijing have worsened in recent weeks, with western democracies demonstrating a more unified response to China. We continue to remain cognisant of the increasing political risks in the region.

Meanwhile, mainland indices in China rallied last week after a state-run publication praised the country’s economic recovery and endorsed the rally in equities. This sent the benchmark Shanghai Composite Index to a two-year high.

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