HONG KONG — China signaled on Friday that the United States could restore Hong Kong 's preferential privileges, saying Washington confirmed it will not renew an executive order that revoked the city's special trading status.

The Commerce Ministry said that the U.S. made commitments on Hong Kong issues and other matters during the U.S.-China trade talks in Madrid last year. The U.S. recently confirmed to China that the President's Executive Order on Hong Kong Normalization would end, the ministry said in a statement responding to media questions.

"The U.S. side's actions represent an important step in fulfilling the consensus reached during the bilateral economic and trade talks. China appreciates it," it said.

It is not immediately clear what all the implications of the decision are. The White House referred questions about the executive order lapsing to the Treasury Department.

The U.S. Office of Foreign Assets Control said in a statement Friday that the national emergency declared in the executive order had expired and that it delisted people who were sanctioned under the order. But it said people who remain sanctioned under another act related to Hong Kong have been added to a different sanction list.

The statement showed Hong Kong leader John Lee and his predecessor, Carrie Lam, were removed from the first list but added to the second one.

The U.S. decision came two months after President Donald Trump met with his counterpart Xi Jinping in Beijing. It could warm ties between them ahead of Xi's expected visit to the U.S. later this year. Earlier this month, a pastor of a prominent underground church who was detained in China in October was released after Trump brought up his case with Xi.

Trump signed the now-expired executive order in July 2020, during his first term in response to Beijing imposing a national security law that year. Trump's order was last renewed for a year in July 2025.

Under the order, Trump said Hong Kong was no longer sufficiently autonomous to justify differential treatment in relation to mainland China under certain laws. It eliminated the preferential treatment for Hong Kong to the extent permitted by law and in the national security, foreign policy, and economic interest of the United States.

China considers the national security law for Hong Kong necessary to restore stability in the city after massive anti-government protests in 2019. The pro-democracy movement back then posed one of the biggest challenges to the Communist Party in Beijing and the Hong Kong government since the former British colony returned to Chinese rule in 1997.

Six years after the law's introduction, many leading activists, including pro-democracy former media tycoon Jimmy Lai, were imprisoned under it. Critics say the Western-style civil liberties that Beijing promised to maintain for 50 years after the handover have declined.

Hong Kong government said in a statement that it noted the "positive shift in the U.S. policy" toward the city.

"Safeguarding Hong Kong's prosperity and stability serves the common interests of China and the US, and also aligns with the general expectation of the international community," it said.

It said it hopes the U.S. will respect China's sovereignty and the rule of law in Hong Kong and resume normal economic and trade exchanges with the city.

Copyright 2026 NPR