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 |  Subject: That'll teach you to trade with the enemy: Uppity China Blocks U.S. Government’s $332 Million Sale of Hong Kong Luxury Apartments  Thu Dec 31, 2020 7:40 am | |
| Transaction can’t be completed without written consent of Chinese government, buyer says it has been told by authorities
The U.S. government’s planned $332 million sale of an exclusive property in Hong Kong was thrown into doubt by the Chinese government, which has determined that the transaction needs its approval.
In September, the U.S. reached a deal to sell a residential compound for consulate staff to Hang Lung Properties Ltd. , a Hong Kong real-estate developer. The scenic property, in a high-end neighborhood called Shouson Hill, includes six low-rise buildings with 26 apartments and a rooftop swimming pool.
A representative of the U.S. Consulate in Hong Kong previously said the sale of the Shouson Hill compound was purely the result of a business decision, made as part of a global reinvestment program by the State Department.
The deal didn’t close on Dec. 30 as scheduled. On Wednesday, Hang Lung said it was informed last week by Hong Kong’s Land Registry that the sale can’t be completed without the written consent of the Chinese government.
China’s imposition of a national-security law on Hong Kong this year has helped stoke tensions between Washington and Beijing. The Trump administration in recent months has imposed sanctions on senior government officials in China and Hong Kong for actions that the U.S. said have eroded Hong Kong’s autonomy.
A Dec. 21 letter from the Land Registry stated that the U.S. Consulate General in Hong Kong “is not a commercial entity, and the Property is not an ordinary real estate property,” the developer said in a regulatory filing.
It added the sale of the compound “involves foreign affairs between The People’s Republic of China and the U.S. and should not be regarded as an ordinary commercial activity.”
The letter said China’s central government had advised Hong Kong’s government that the U.S. needs to make a written application at least 60 days before renting, buying or selling any property in the city. It also said the U.S. needs written consent from the central government before proceeding with any transaction.
The U.S. has contested the necessity to comply with these requirements but agreed this is a transaction involving foreign affairs and diplomatic matters, according to Hang Lung’s filing.
Chinese Foreign Ministry spokesman Wang Wenbin said on Wednesday during a regular press briefing that China’s requirement is “in accordance with the principle of reciprocity,” referring to U.S. regulations on the real-estate management of foreign embassies and consulates in America.
On Wednesday, a spokesman for the U.S. Consulate in Hong Kong said: “Additional time is needed for the buyer and seller to complete the administrative processes required for closing on the property.”
The State Department “is not at liberty to comment on the specific terms of ongoing contractual transactions,” he added.
The Shouson Hill property was acquired by the U.S. government in 1948, when Hong Kong was under British rule. Hang Lung has hoped to redevelop the 94,796-square-foot site into luxury detached houses.
.https://www.wsj.com/articles/china-blocks-u-s-governments-332-million-sale-of-hong-kong-luxury-apartments-11609323459
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