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China (Hong Kong and Macau)

Overview: The counterterrorism efforts of the People’s Republic of China continued to target  almost exclusively ethnic Uyghur and other Turkic Muslim alleged extremists, whom Beijing  labels as the East Turkistan Islamic Movement (ETIM), a group Beijing considers the primary  source of terrorism in Xinjiang. However, the United States has not seen clear and convincing evidence of ETIM’s existence. In July and August, as the United States was withdrawing forces  from Afghanistan, Chinese Foreign Minister Wang Yi called on the Taliban to “re-impose the  ban on Xinjiang’s Uyghur militant group, ETIM,” and to “resolutely and effectively combat” the organization. Further, People’s Republic of China officials stated that Beijing would strengthen  ties with the Taliban to ensure “ETIM do[es] not function from Afghanistan’s soil targeting  Xinjiang.”

The Government of the People’s Republic of China’s measures, which it describes as  counterterrorism, have included holding more than one million people in detainment camps.  NGO data have identified more than 12,000 of these detainees who were sentenced to prison  terms, in most cases for five to 20 or more years. When questioned, the People’s Republic of  China claimed that the camps are vocational education and training centers. The People’s  Republic of China denies that its Xinjiang policies involve human rights abuses, claiming its  system of “reeducation” camps exist to “combat separatism and Islamist militancy in the region”  and are a crucial part of the “war on terror.” China continued to expand law enforcement tools  and enhance its military and counterterrorism capacities to justify and improve its ability to carry  out this repressive campaign, respond to threats because of China’s increasing global economic  footprint, and garner international support for its counterterrorism-related policies.

2021 Terrorist Incidents: People’s Republic of Chinese officials claimed that no violent  terrorist incidents occurred in the country; however, Chinese authorities continued to use  counterterrorism as a pretext to prosecute ethnic Uyghurs, who are predominantly Muslim, and  members of other ethnic and religious minorities, on terrorism charges. In April, Shirzat  Bawudun, former head of Xinjiang’s Department of Justice, and Sattar Sawut, former head of  Xinjiang’s Department of Education, were sentenced to death on terrorism and extremism  charges; five others were given lesser sentences.

International terrorist-related incidents associated with Chinese citizens continued in 2021,  including a targeted gun assault by a Sindhi separatist group in Karachi, Pakistan, that  wounded a People’s Republic of China national; a Tehrik-e Taliban Pakistan (TTP) attack on  China’s ambassador to Pakistan, during which four others died; a Balochistan Liberation Front  (BLA) attack on two People’s Republic of China nationals in Karachi; a BLA suicide bombing  attempt against Chinese interests in Gwadar, Pakistan; and the deaths of nine Chinese workers by  suicide bomb in Pakistan’s Khyber Pakhtunkhwa province, which China attributed to ETIM with  TTP’s assistance.

Legislation, Law Enforcement, and Border Security: The People’s Republic of China  continued to advance and defend its counterterrorism policies, including reeducation camps in  Xinjiang. On June 1, the People’s Bank of China issued a revised draft anti-money laundering  law for public comment, with the stated goal of preventing and curbing money laundering and  terrorist financing as well as safeguarding national security. As of this report’s publication, the  legislation has not been passed. Under the pretext of securing the border against ETIM  members, the People’s Republic of China placed politically motivated INTERPOL red notices  against Uyghurs.

Countering the Financing of Terrorism:  China is a member of the Financial Action Task  Force, the Asia/Pacific Group on Money Laundering, and the Eurasian Group on Combating  Money Laundering and Terrorist Financing.  China’s Financial Intelligence Unit is not a member of the Egmont Group and lacks capacity or political will to effectively share financial  intelligence.

Based on current law enforcement investigations, the People’s Republic of China does not  adequately control terrorist financing. Chinese law enforcement claimed to have limited ability  to freeze funds and investigate banking transactions, and no corporate transparency regulations  exist. China piloted a central bank-backed digital currency known as the eCNY, or eCNY  Digital Currency Electronic Payment, to deter use of other virtual currencies, among other  objectives. The People’s Republic of China also increased regulatory scrutiny of the financial  sector by making improvements to the anti-money laundering framework. However, serious  shortcomings persisted in effective implementation and ensuring transparency, particularly in the  context of international cooperation.

Countering Violent Extremism: The People’s Republic of China continued to implement  broad repressive campaigns in Xinjiang under the guise of countering what the Chinese  government calls “extremism.” China’s repressive measures include mass “reeducation” and  “vocational training” of predominantly Muslim Uyghurs and members of other ethnic and  religious minority groups. Despite the United States’ 2021 determination that People’s Republic  of China authorities in Xinjiang have committed genocide and crimes against humanity and  strong condemnations from many other countries, China continued to defend its policies in  Xinjiang and obstructed access to the region by international observers. In October, Xinjiang  Uyghur Autonomous Region Spokesperson Xu Guixiang stated: “The so-called Xinjiang-related  issues are not ethnic, religious, or human rights issues at all, but antiviolence, antiterrorism, anti infiltration, antiseparation, and anti-interference issues.” Under the pretext of counterterrorism  efforts, the People’s Republic of China used existing domestic laws to actively screen, monitor,  and censor its citizens on the internet.

The People’s Armed Police is increasingly focused on internal security and joint operations with  the People’s Liberation Army and is developing capabilities for rapid response, mobility, and  counterterrorism operations, which included “counterterrorism in Xinjiang and Tibet.” In  December, the People’s Liberation Army conducted emergency drills and joint law enforcement  drills in a nationwide campaign. A 2021 Department of Defense report noted that the People’s  Republic of China continued to develop military and law enforcement capabilities and further  coordination between Chinese military and counterterrorism apparatuses, stating: “Xi Jinping  and the [Chinese Communist Party] leadership tasked the [People’s Armed Police] with  integrating themselves into the [People’s Liberation Army’s] joint operation system.”

International and Regional Cooperation: The People’s Republic of China engaged in  multilateral, regional, and bilateral fora, seeking to present itself as a global leader on  counterterrorism. China continued to promote the UN as the primary international forum for  counterterrorism, where it actively advances a repressive approach to counterterrorism.

On July 28, Wang Yi met with Mullah Abdul Ghani Baradar, then the political chief of  Afghanistan’s Taliban, urging the Taliban to “make a clean break with all terrorist organizations,  including ETIM.” In response, the Taliban leader said it “will never allow any force to use  Afghan territory to engage in acts detrimental to China.”

In August the People’s Republic of China conducted antiterrorism drills with Tajikistan, citing  concerns about terrorist elements from Afghanistan spilling over the border. In September,  troops from China and Pakistan conducted a joint exercise as part of the Shanghai Cooperation  Organization’s (SCO’s) Regional Antiterrorism Structure. In September, President Xi presented  a five-point proposal underscoring SCO’s important efforts over the past 20 years. On  December 22, the China Institute of International Studies, which is affiliated with the MFA,  organized the second International Seminar on Counterterrorism, focused on new threats and  joint response measures to counter terrorism, particularly in Afghanistan, in which 17 countries  participated.

The People’s Republic of China is a member of the following organizations:

  • The ASEAN Regional Forum
  • The Asia Pacific Economic Cooperation
  • The East Asia Summit
  • The Global Counter Terrorism Forum
  • The SCO Regional Anti-Terrorism Structure

Hong Kong

Overview: Historically, Hong Kong has been neither a hub nor a target for international terrorist  groups or extremists and has long maintained highly efficient security forces. Strict travel  restrictions put in place by the Government of Hong Kong, because of the COVID-19  pandemic, have further reduced the likelihood of foreign terrorist threats to the city.  Consequently, Hong Kong law enforcement has not been a close partner on counterterrorism  matters, including intelligence sharing.

However, Hong Kong remains an important financial center and is geographically close to  countries with known domestic and foreign terrorism issues — including Indonesia and the  Philippines — providing a potential nexus for terrorist financing flows and a possible location  for terrorist activities when international travel returns to normal.

Hong Kong continued security and law enforcement cooperation with the United States through  the Hong Kong Customs and Excise Department’s joint implementation of the Container Security Initiative. Hong Kong cooperated internationally on counterterrorism efforts through  INTERPOL and other security-focused organizations. Despite these efforts, the Government of  Hong Kong and its law enforcement apparatus could be a stronger partner on counterterrorism  and other security challenges, such as providing more information related to terrorism  financing and associated activities.

2021 Terrorist Incidents: The Hong Kong Police reported an incident on July 1, which it  described as a lone-wolf-style domestic terrorist attack, involving a man using a knife to wound a  male police officer and then killing himself.

Legislation, Law Enforcement, and Border Security: Counterterrorism remained an  operational priority for the Hong Kong Police Force (HKPF). The Police Counterterrorism  Response Unit provides a strong deterrent presence, assisting police districts with  counterterrorism strategy implementation and complementing the tactical and professional  support of existing police specialist units, such as the Explosive Ordnance Disposal Bureau, the  Special Duties Unit, the Airport Security Unit, and the VIP Protection Unit.

In 2018 the Government of Hong Kong set up the Interdepartmental Counter-Terrorism Unit  (ICTU) to strengthen overall counterterrorism efforts by monitoring global trends, reviewing and  improving counterterrorism strategies in Hong Kong, developing specialized counterterrorism  training, and optimizing emergency response plans. The ICTU held its most recent  counterterrorism exercise in November.

Countering the Financing of Terrorism: Hong Kong is a member of the Financial Action  Task Force and the Asia Pacific Group on Money Laundering (APG). Hong Kong’s Joint  Financial Intelligence Unit is a member of the Egmont Group.

In May the Government of Hong Kong concluded a three-month consultation on legislative  proposals to enhance Hong Kong’s Anti-Money Laundering and Counter-Financing of Terrorism  (AML/CTF) regime through the introduction of a licensing requirement for virtual asset services  providers and a registration system for dealers in precious metals and stones. As of December,  the government had not yet introduced a bill into the Legislative Council.

The Hong Kong Monetary Authority (HKMA) supervises financial institutions’ risk  management systems and takes disciplinary actions for those failing to comply with AML/CFT  measures. In 2021, disciplinary actions were taken against three Chinese banks and a Hong  Kong-based online payment provider. To improve the efficiency and effectiveness of AML/CFT  measures, HKMA in November launched AML Regtech Lab, or AMLab, to allow  experimentation with technologies and data analytics for preventing and detecting financial  crimes.

In September the Securities and Futures Commission published its revised AML/CFT  guidelines, which include additional guidance to facilitate the adoption of a risk-based approach  to AML/CFT measures by securities industry participants. The revised guidelines require  financial institutions to apply additional due diligence and risk mitigation measures for cross border correspondent relationships in the securities sector, such as determining through publicly  available information whether the respondent institution has been subject to targeted financial  sanctions or regulatory actions and obtaining senior management’s approval before establishing  cross-border correspondent relationships. The guidelines also prohibit financial institutions from  establishing or continuing a cross-border correspondent relationship with a shell financial  institution.

Countering Violent Extremism:  There were no changes to Hong Kong’s CVE programming in  2021.

International and Regional Cooperation: In 2020, the President’s executive order on Hong  Kong normalization directed agencies to take action to end the provision of training to members  of the Hong Kong Police Force or other Hong Kong security services at the Department of  State’s International Law Enforcement Academies.

A Greater Bay Area (GBA) Anti-Money Laundering Summit was organized in October to  enhance exchange and cooperation on AML among mainland China, Hong Kong, and  Macau. The GBA refers to mainland China’s development plan to promote economic and social  integration between and among Hong Kong, Macau, and nine cities in Guangdong  province. Hong Kong is also an APEC economy.

During July 27-31, the Cyber Security and Technology Crime Bureau conducted the first  Guangdong-Hong Kong-Macau tripartite counter-cyber-and-physical-terrorism exercise with the Cyber Criminal Investigation Department of the Guangdong Provincial Public Security  Department and the Macau Judiciary Police. The exercise simulated a terrorist group planning to  launch a terrorist attack in Hong Kong.


Overview: Historically, Macau has not been a proactive partner on counterterrorism matters,  including intelligence sharing. Macau is neither a hub nor a target for international terrorist  groups or extremists and maintains highly efficient security services. The stringent travel  restrictions put in place by the Macau government because of the COVID-19 pandemic further  reduced the likelihood of foreign terrorist threats to the city. Macau is one of the most successful  and popular destinations for gambling globally and is geographically close to countries with  known domestic and foreign terrorism issues, such as Indonesia and the Philippines. When  international travel returns to normal levels, the city will potentially be a nexus for facilitating  terrorism financing or location for terrorist activities. The Police Intervention Tactical Unit  (UTIP) branch of the Macau Public Security Police Force is responsible for CT issues. UTIP’s  responsibilities include protecting important installations and dignitaries and IED deactivation.  Macau cooperated internationally on counterterrorism efforts through INTERPOL and other  security-focused organizations. Despite these efforts, Macau and its law enforcement apparatus  could be a stronger partner on counterterrorism and other security challenges, including  providing more information related to terrorism financing and associated activities.

2021 Terrorist Incidents:  No terrorist incidents were reported in Macau in 2021. Legislation, Law Enforcement, and Border Security: There are no updates for 2021.

Countering the Financing of Terrorism: Macau is a member of the APG. Macau’s Financial  Intelligence Unit, the Financial Intelligence Office (GIF), is a member of the Egmont  Group. The GIF’s functions include freezing assets, introducing the AML/CFT assessment  standards of international organizations, and sharing international organizations’  recommendations for law enforcement authorities to step up AML/CFT efforts.

The GIF’s director was appointed by FATF in 2020 as co-chair of the Asia/Pacific Joint Group  (APJG), a financial action task force subgroup responsible for establishing sanction and  monitoring lists. The GIF director chaired or participated in more than 20 virtual APJG meetings  in 2021. The GIF provided AML/CFT training sessions to more than 900 practitioners from the  financial and gaming sectors in 2021.

Macau’s interdepartmental AML/CFT working group, which was established in 2002 and  currently consists of 15 government agencies, held one AML/CFT plenary meeting in May to  prioritize project items listed in the Five-Year Strategic Plan for Anti-Money Laundering (2021- 2025). The working group is responsible for tracking the development of AML/CFT  international standards and best practices, and formulating overall policies against money  laundering, terrorism financing, and the financing of proliferation of weapons of mass  destruction.

Countering Violent Extremism: There were no changes in 2021.

International and Regional Cooperation: In April the GIF signed an MOU with the New  Zealand Financial Intelligence Unit on the exchange of AML/CFT intelligence.

In July, Macau’s Judiciary Police conducted the first Guangdong-Hong Kong-Macau tripartite  counter-cyber-and-physical-terrorism drill with the Guangdong Provincial Public Security  Department and the HKPF to prepare for a large-scale bomb attack and a hostage-taking crisis.

The 2020-21 tripartite online meeting among Macau authorities and those on the mainland and in  Hong Kong to foster cooperation on AML/CFT took place in October, in a virtual format, with a  focus on facilitating a cross-border intelligence-sharing mechanism.

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