Washington's decision to strip Hong Kong of its special trading status violates World Trade Organisation rules, China said on Thursday.

US President Donald Trump announced last Friday that the US will revoke special trading privileges granted to Hong Kong after Beijing moved to tighten its grip on the semi-autonomous city with plans to impose a national security law.

Removing the special status would affect a bilateral extradition treaty, commercial relations and export controls between the US and the Asian financial hub.

The move adds to growing friction between the world’s two biggest economies amid the coronavirus crisis and in the wake of a two-year trade war that has not been fully resolved.

China’s commerce ministry spokesman Gao Feng said the special trading status given to the former British colony was recognised by all WTO members and did not depend solely on the US.

“If the US disregards the fundamental principles of international relations and adopts unilateral measures according to its domestic laws, it will violate WTO rules and will not be in the interest of the US,” Gao said at a regular press briefing.

A spokesman of China’s banking regulator said separately that Hong Kong’s status as a financial hub will not be shaken by the potential sanctions.

“Hong Kong’s financial market is running smoothly, and there is no abnormal capital outflow,” said the spokesman, adding that this reflected the international market’s confidence in the city.

Beijing has said the planned national security law is needed to tackle “terrorism” and “separatism” and criminalises acts of subversion, secession, terrorism and foreign interference in Hong Kong.

Gao said the national security law will not undermine Hong Kong’s autonomy.

Trump has provided few details on a timetable for scrapping Hong Kong’s special trading status.