HONG KONG (BLOOMBERG, REUTERS) - Hong Kong's top security official will take over the city's No. 2 spot in a Cabinet reshuffle, the latest sign that a crackdown on dissent is central to China's long-term plans for the Asian financial centre.

Security Secretary John Lee - a former long-time police official - has been promoted to Chief Secretary for Administration, Hong Kong's top official Carrie Lam told a news conference on Friday (June 25) alongside Mr Lee and other security officials receiving promotions.

China's Cabinet approved the appointments on Wednesday, the official Xinhua News Agency said. The next day, a campaign led by Mr Lee forced the Apple Daily, the city's biggest pro-democracy newspaper, to shut down.

Mr Lee, 63, will replace Chief Secretary Matthew Cheung, and Police Commissioner Chris Tang, 55, move into the security secretary's role. Mr Raymond Siu, 55, a deputy police commissioner who joined the force in 1988, will take over Mr Tang's position at the law enforcement agency.

Mr David Webb, a prominent Hong Kong investor who has put funds into Apple Daily's parent, Next Digital, said the government missed an opportunity to appoint a stronger team to repair the financial hub's battered economy.

"Instead, Hong Kong is starting to look more like a police state, with the No. 2 position now being filled by a hardliner whose recent achievement is to cripple a newspaper," Mr Webb said in a text message.

China has carried out an unprecedented campaign to curb dissent in Hong Kong, led by national security legislation handed down on June 30 last year in response to a wave of unrest.

The closure of Apple Daily, which was under pressure after Mr Lee used the security law to freeze the company's assets as part of the city's prosecution of company founder Jimmy Lai, represented one of the biggest blows yet to the local democracy movement.

The United Kingdom and the United States condemned the newspaper's closure, with President Joe Biden calling it a "sad day for media freedom in Hong Kong and around the world".

Mr Lee and Mr Tang, 55, were among 11 Hong Kong and Chinese officials sanctioned by the US government last August for undermining Hong Kong's autonomy and democratic processes after the enactment of the national security law.

The new team will be charged with overseeing a series of elections in the coming months under a Beijing-led revamp that, among other things, created a panel to vet candidates for patriotism.

Mrs Lam, the city's chief executive, has not yet said whether she will see a second term when her first expires next year. She has also been tasked by Beijing to pass local legislation expanding the city's powers to police national security.

"Because the government is going through the enforcement stage of the national security law, I won't be surprised if the government wants to put people well versed with law enforcement in senior positions," Mrs Regina Ip, who served as the city's security secretary two decades ago and is a current member of the Executive Council that advises Hong Kong's leader, told Bloomberg Television before the formal announcement.

The chief secretary's post has been a springboard to higher office: two of city's four chief executives - Mrs Lam and Mr Donald Tsang - since its return to Chinese rule in 1997 first served in the role.

The appointment of a law-enforcement officer to the top administrative post marked a shift for the former British colony, which has long been dominated by career civil servants like Mrs Lam.

"There is definitely no change in the role and responsibility of the chief secretary," Mrs Lam told reporters on Friday. "The mere fact that a particular candidate is coming from a particular background doesn't mean that the job will fit him by asking him only to perform in an area that he is most familiar with. That's not the situation."

She said the changes would lay down a good base for a government transition next year when her current term ends.

Separately in a statement, Mrs Lam said: "They have had distinguished performance in the government over the years and possess proven leadership skills.

"I am confident that they are competent for their new posts and would rise to the challenges in serving the community."

Senior appointments are made at the recommendation of the Hong Kong government, but need final approval from Beijing. Xinhua did not explain why the State Council, China's Cabinet, announced the appointment two days after it was approved.

Mr Lee has sought to broaden the scope of the security law by formally stating that police surveillance of communications comes under its scope, potentially giving the authorities broader powers to intercept information.

"The implementation of the security law turned Hong Kong from chaos to governance," he said in the Friday morning news conference.

"The 'patriots-ruling-Hong Kong' principle and improvement of electoral system put an end to chaos and and times of destruction, opening up a new chapter of development and effective governance."

In a press conference following the arrest of five top Apple Daily executives last week, Mr Lee said residents must distance themselves from the suspects or "you will pay a hefty price". He earlier warned that prominent Hong Kong activists who had fled overseas to evade the security law - such as former politicians Nathan Law and Ted Hui - would be pursued for life.

Mr Lee's appointment "may be a proactive strategy to illicit loyalty from the police force", said Assistant Professor of Chinese Politics Liu Dongshu from the City University of Hong Kong.

"The police force has become much more important for maintaining social order and implementing the national security law," Prof Liu said. "You appoint someone who has been a policeman their entire career - that's a symbol of the increasing power of the police."

Mr Lee holds a degree from Charles Sturt University in Australia, and joined the Hong Kong Police in 1977, rising to become deputy commissioner, according to a government statement.

He played a key role in trying to implement a contentious proposed extradition law in 2019 that divided Hong Kong society and triggered the mass protests. That legislation was eventually scrapped amid widespread public calls for Mr Lee to quit.

Known for his hawkish stance, Mr Lee had spearheaded the city's disciplinary forces, including the police, in the national security crackdown.

That clampdown has seen mass arrests of democratic activists and politicians, and a freeze on the assets of the pro-democracy Apple Daily newspaper on national security grounds that led to its abrupt closure this week.

Chinese and Hong Kong officials say the national security law has restored stability and order to Hong Kong, maintaining that rights and freedoms are not absolute.

One source who has worked with Mr Lee said he is resolute, earnest and efficient but, as a career police officer, "doesn't have a natural feel for the politics of a highly-polarised Hong Kong".

Mrs Lam and Mr Lee are expected to travel to Beijing for the Chinese Communist Party's centenary celebrations next week, local media reported.