On August 7, 2020, the U.S. Department of the Treasury sanctioned 11 individuals e.g. Chief Executive Carrie Lam, Secretary for Security John Lee Ka-chiu, Secretary for Justice Teresa Cheng and Secretary for Constitutional and Mainland Affairs Erick Tsang. Many other officials have real estate in UK, and family with British citizenship.
The UK can do the same, right? I don't think the UK needs a new Act of Parliament. Do they? I don't know what legislation is required, though. Does the Crown have to exercise the Royal Prerogative? Does the Privy Council have to issue Order In Council? Does UK Government simply enact secondary legislation like Statutory Instrument?
If the UK can sanction, why haven't they? UK sanctions "arguably be more impactful than the US, given that most of these people have closer ties with the UK (presumably)"
Carrie Lam "gave up her British nationality in 2007 when she was appointed Secretary for Development, but her husband and two sons kept their nationalities, obtained through the British Nationality Selection Scheme before the handover. She said her husband will not give up his nationality even if she wins". Lam is also an Honorary Fellow at University of Cambridge's Wolfson College.
I don't think the UK is afraid of China. The U.K. can't anger China any more than it has, when UK is issuing "new special visa for Hong Kong's BNO holders" as on July 23 2020 and politicians like Foreign Secretary Dominic Raab keeps "condemn[ing]" China.