The United States is preparing to carry out sanctions Friday on a number of China officials over China's suppression of democracy in Hong Kong.
The looming sanctions will also serve as a warning to international businesses operating in Hong Kong about worsening conditions, sources with knowledge of the situation told Reuters.
"The situation in Hong Kong is deteriorating and the Chinese government is not keeping its commitment that it made, how it would deal with Hong Kong," Bloomberg quoted U.S. President Joe Biden as saying during a White House news conference Thursday alongside German Chancellor Angela Merkel.
The U.S. under both the Trump and Biden administrations has determined that Hong Kong no longer has autonomy from mainland China since the passage of a new national security law in 2020.
As such, the financial hub no longer enjoys trade and commercial privileges from the U.S., with certain Hong Kong officials hit with U.S. sanctions for their actions in clamping down on democracy.
According to critics, China imposed its new national security law to facilitate a crackdown on pro-democracy activists and free press.
The move, which is expected to infuriate China, marks the Biden administration's latest effort to hold the country liable for what the U.S. calls an "erosion of rule of law" in Hong Kong.
The warning will not demand specific action by the banks, businesses and investors that have transformed the former British colony into one of the world's top financial capitals.
Instead its objective is to highlight the threats - legal, financial and otherwise - the U.S. sees as China broadens its control, Bloomberg said.
"We know that a healthy business community relies on the rule of law, which China's national security law in Hong Kong continues to undermine," U.S. State Department representative Ned Price said in quotes by Fortune.