The top US diplomat in Hong Kong said the imposition of a new national security law had created an "atmosphere of coercion" that threatens both the city's freedoms and its standing as an international business hub.

In unusually strident remarks to Reuters this week, US Consul-General Hanscom Smith called it "appalling" that Beijing's influence had "vilified" routine diplomatic activities such as meeting local activists, part of a government crackdown on foreign forces that was "casting a pall over the city".

Smith's remarks highlight deepening concerns over Hong Kong's sharply deteriorating freedoms among many officials in the administration...