US firms concerned as tensions simmer in Hong Kong over looming legislation

The legislation has sent ripples through the legal, diplomatic and business communities.
The legislation has sent ripples through the legal, diplomatic and business communities.PHOTO: REUTERS

HONG KONG (REUTERS) - A survey of US businesses on Wednesday (June 3) revealed deep fears for the future of their operations in Hong Kong if China imposes national security legislation that critics say could curb the financial centre’s freedoms and fuel ongoing protests.  

Contributing to simmering anti-government tensions, Hong Kong lawmakers are set to resume a debate over a controversial bill that would criminalise disrespect of China’s national anthem, following scuffles in the legislature in recent weeks.  

An annual vigil to mark the June 4, 1989, anniversary of Chinese troops opening fire on pro-democracy students in and around Tiananmen Square has been cancelled for the first time ever due to the coronavirus but activists still plan to rally.  

Following that, demonstrations are planned to mark the anniversary of the million-people march on June 9 last year against a since-withdrawn mainland China extradition bill, and the protests three days later that were met by police with tear gas and rubber bullets in scenes which radicalised moderates.  

The two key events turned last year’s protests into a broader movement for greater democracy, plunging the Chinese-ruled city into its biggest crisis since its handover from former colonial master Britain in 1997.  

The survey conducted by American Chamber of Commerce (Amcham) survey on June 1-2 and published on Wednesday showed 30 per cent of respondents were "moderately" concerned and 53.3 per cent were "very concerned" about the legislation, which aims to tackle secession, subversion, terrorism and foreign interference in Hong Kong.

The legislation, which could also see Chinese intelligence agencies set up bases in the city, has sent ripples through the legal, diplomatic and business communities amid concerns it could erode rights and freedoms in Hong Kong.

Beijing and local authorities have repeatedly said it would not affect the city's high degree of autonomy, agreed with its former colonial master Britain before it reverted to Chinese rule in 1997.

About 60 per cent of the respondents thought the legislation would harm their business operations, citing concerns about ambiguity in scope and enforcement, erosion of autonomy, talent drain, Hong Kong's international status, social unrest and the independence of the justice system among others.

Some 30 per cent of the respondents were considering moving capital, assets or business operations from Hong Kong.

Beijing and Hong Kong authorities have repeatedly said the national security laws would not affect the city’s high degree of autonomy – part of the handover terms from former colonial power Britain to China in 1997 – including its common law, independent legal system.  

 
 
 
 

Some companies, including HSBC Holdings, have come under pressure to support the national security law, with former Hong Kong leader Leung Chun-ying calling out the global bank for not making its “stance” clear on the legislation.  

On Wednesday, Jardines Group, one of Hong Kong’s original foreign trading houses, published a full-page statement in pro-Beijing newspaper Ta Kung Pao saying it was important to enact a legal framework to safeguard the city’s national security.  

“It can ensure that Hong Kong continues to absorb investment, increase job opportunities and guarantee people’s livelihood,” Jardines said in the statement.  The group’s flagship company, Jardine Matheson Holdings, is listed in Singapore.

On Wednesday, British Prime Minister Boris Johnson said Beijing’s decision would “dramatically” erode Hong Kong’s autonomy and the United Kingdom was prepared to change its immigration rules to accommodate Hong Kong residents.  
Even before China announced its plan for the security law, there was a surge in renewals of British National Overseas Passports by Hong Kong residents, while immigration consultants have reported a rush of inquiries from people looking to move overseas.  

Hong Kong leader Carrie Lam accused foreign governments on Tuesday of “double standards” in their reaction to Beijing’s plans. Lam was in Beijing on Wednesday to discuss the legislation, which is yet to be drafted, but is expected to be implemented by September.