Why has China Imposed Sanctions on 11 US Lawmakers and NGO Leaders?

  • Aug 11, 2020 AEST
  • Team Kalkine
Why has China Imposed Sanctions on 11 US Lawmakers and NGO Leaders?


  • Escalating tensions between the US and China amid the ongoing pandemic are a bad piece of news for stock markets and investors.
  • Taking the tensions to one level up, China has imposed sanctions on 11 US nationals, in response to US measures against Chinese and Hong Kong officials.
  • President Trump, who remains firm on finding origins of the virus, has maintained strong objection to China's new national security law for Hong Kong.

Changing global equations amid the ongoing unprecedented COVID 19 crisis are bound to give investors further sleepless nights. US and China, the most prominent economies in the world, are unable to remain amicable at these challenging times when ideally, they should be together to face this crisis and bring solutions to the world.

When the world is going through a tough battle without any significant weapon (treatment) for COVID 19, relations between the world’s two largest economies are deteriorating sharply. Both countries have numerous challenges to tackle at their home front; however, these problems do not seem enough to stop them from giving each other a tiff. 

That said, latest on this front is, China has imposed sanctions on 11 US nationals in response to US measures against Chinese and Hong Kong officials. These 11 US nationals include six Republican lawmakers- Senators Josh Hawley, Marco Rubio, Tom Cotton, Ted Cruz and Pat Toomey and Representative Chris Smith. Others are individuals at non-profit and rights groups. 

Chinese Foreign Ministry spokesperson Zhao Lijian has reportedly stated that the move is in response to US’ wrong behaviour on Hong Kong-related issues. Recently, US imposed sanctions on Hong Kong and Chinese officials, believed to be responsible for undermining Hong Kong’s autonomy. 

Meanwhile, White House spokesperson Kayleigh McEnany commented that Chinese sanctions were symbolic and ineffectual. There are widespread concerns about China's national security law imposed on Hong Kong in late-June, with nations around the globe demanding real action from China. US President is strongly against China over troubling situations unfolding in Hong Kong and will continue to remain so, Ms McEnany added.

Hong Kong Issue at the Centre of Tensions between the US and China

The two superpowers have already been dismantling their decades of social, economic and political ties. By the day, tensions between them are mounting.

US has been unsatisfied with the way China handled the COVID 19 pandemic at the beginning. The virus started spreading from China's Wuhan city and after devastating the city, within matter of weeks, it engulfed other parts of the world. The pandemic is the worst ever crisis faced by the superpower US.

The virus crisis has broken the backbone of world economy with governments all around the world overburdened financially due to multiple stimulus packages released across sectors. Moreover, it resulted in differences between the US and the WHO. Not only the US, several western countries, including Australia, called for a proper probe into origins of the virus.

Also read: Australia-China Escalating Tensions Upsurge- Grim Times Ahead?

Unaffected by the sentiments and demands of these countries, China also seemed to corner itself on the Hong Kong issue. On 30 June, China's top legislature collectively passed a new national security law for Hong Kong. The law is vaguely defined, and there is no clarity regarding its implementation. The law seems a threat to the freedom of people living in Hong Kong.  

President Donald Trump's Recent Comments on China

On 10 August, President Donald Trump asked Americans to stop politicising the coronavirus and be united on the view on how the virus reached the US and the world needs to be probed. America can't take the issue lightly, and being very angry, it will find out the reason behind its spread. The virus came from China, and China is accountable for this, he added.

Mr Trump also highlighted plans to end medicine dependency on China and other foreign countries, bringing US pharmaceutical and medical supply chains back home, over the upcoming four-year period. The plan is expected to generate millions of jobs and bring back thousands of factories to the country.

Is There Any Election Angle Involved in Deteriorating US-China Ties?

The US President is trailing badly in the Presidential polls. As the elections are approaching, there are reports that Trump's national security officials are intensifying their attack on China and targeting Chinese officials, diplomats and executives.

Recently, Secretary of State Mike Pompeo commented that if we want a free 21st century and not China overpowering countries, the old paradigm of blind engagement with China needs to end.

The US-China Entering Dangerous Territory

As per experts, relations between these two superpowers seem to enter the dangerous territory of cold war. The impact of intensifying competition between the world's two biggest economies would be felt by the whole world around. Post pandemic, countries will have multiple challenges to focus on due to the prolonged recession, and the crisis will also have psychological impacts on people. However, the US-China tensions will only add to the broader uncertainty.

Moreover, there is one vital question about which of these two countries will emerge stronger from the crisis. Outcome of the US presidential election will also mark a turning point in the world's progress post-pandemic.

On the technology front, the two countries are noticeably competing. The technology war is being fought on many fronts - voice recognition, facial recognition, fintech, 5G, and AI. But AI is the most important among these.

China's multinational technology company, Huawei is No.1 in making 5G network equipment and is a leading manufacturer of phones. But in the US, its products are virtually outlawed, and the company's CFO is under house arrest in Canada for 18 months due to various US charges of theft of trade secrets, wire fraud, and bank fraud, which the CFO and the company have always denied. On the other hand, China also banned some of America's top tech giants like Facebook and Google.

Also read: Huawei Banned from the UK’s 5G Mobile Phone Networks - UK China Lock Horns

Some battles are being fought out in the open; however, there are other competitions still in the carpet. The power war will clearly define the future of world equations.


There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report  Top Dividend Stocks to Consider in 2020



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