The Day at a Glance | June 30 2020

China approves security law in Hong Kong

Ignoring warnings from the United States, China approved a security law yesterday for the autonomous city of Hong Kong, which will come into force this Tuesday. The law has been criticized by the US and citizens of Hong Kong for being a vehicle that allows arrests for criticizing the Pekin regime, affecting the liberties of its citizens and eroding the city`s autonomy. This measure could also force the United States to reply – considering that in recent weeks it has threatened sanctioning China if the law was approved. It`s feared that US retaliation could deteriorate bilateral relations and hinder Hong Kong`s development as a financial global center. Chinese Foreign Minister, Zhao Lijian, assured that if the US decides to intervene in China`s internal affairs there will be a proportional response. Since the beginning of the week it`s been reported that China is preparing to cancel visas held by US officials linked to the sanctions. The Chinese government considers that the implementation of the law is essential to maintain social order after serious civil protests last year.

An “extremely uncertain” outlook: Powell

Jerome Powell`s (Chairman of the Federal Reserve) speech, scheduled to be given today around noon in front of the US House of Representatives Financial Services Committee, was made public in advance yesterday. In his speech, Powell warns of an extraordinarily uncertain road ahead for the US economy. He admits that the economic recovery seen in recent weeks is very positive but that the future of the economic outlook will greatly depend on the capacity to keep the virus under control. “A full recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities”, assured Powell in his speech. Additionally, Powell calls not to withdraw any fiscal stimuli too soon and maintain them for however long is necessary. With this respect Secretary Treasury Steven Mnuchin will also speak in front of the House of Representatives and it`s very likely that the lawmakers will ask him and Powell how more effective measures can be designed in order to fund local governments and carry out policies that will back employment during the health emergency. On July 31st, government aid programs approved in the last fiscal package will come to an end and will have to be renewed to avoid a deeper economic impact.