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  • Dec 20, 2014
  • Updated: 6:07am
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BUSINESS

Foreign firms may flee Hong Kong if reforms go wrong way: top US lawyer

Top US lawyer warns city's politics will be at the centre of international focus and foreign firms may move to rival cities Singapore or Shanghai

PUBLISHED : Tuesday, 05 November, 2013, 4:17am
UPDATED : Tuesday, 05 November, 2013, 4:18am
 

International businesses will be watching Hong Kong's political development closely over the next 18 months and may move their interests elsewhere if reforms take the "wrong direction", the head of the world's biggest lawyers' body says.

American Bar Association president and corporate lawyer James Silkenat said there would be plenty of time for companies to decide on a course of action as the process unfolded.

"There is enough time for two things to happen," Silkenat told the South China Morning Post.

"If the direction is the wrong one, there will be enough time for businesses around the world to educate themselves [on developments].

"If the diagnosis is positive, the city will be more attractive to international financial and legal institutions," Silkenat added.

He said rival cities Singapore and Shanghai could be the beneficiaries if there was a flight of business from Hong Kong.

Silkenat's remarks, made while he attended a legal forum held by the Law Society last week, follow stern rebukes from Beijing to senior British and United States officials who were accused of meddling in Hong Kong affairs after making similar comments.

The chief of the professional body with more than 400,000 members and 135 years of history singled out the preservation of "rule of law" and an "open and democratic society" as factors determining the "right" plan for the chief executive election in 2017.

"At the moment, there is a lag of information internationally … but people will focus [closely] over the next 18 months, as Hong Kong starts to move towards 2017," he said.

"It depends on what Hong Kong wants for its future. We will watch how the government develops its electoral package and how the public reacts."

If companies were to dilute their stakes in Hong Kong, the most likely benefactors would be Singapore or Shanghai, said Silkenat, who has been travelling to China on business since 1975.

While Hong Kong had better regulatory schemes and strong, independent courts, "Shanghai may offer better business opportunities", he added.

The veteran lawyer said Hong Kong's better regulation meant it was still attractive to American law firms as a base for Asia.

While business in the city was usually apathetic to politics, Silkenat said foreign firms "want to focus on business too, but politics do have an impact on business".

Of a long list of problems he saw for foreign law firms practising in China, Silkenat named tax - foreign firms are subject to higher rates - as the foremost hurdle.

But he was optimistic. "We are working with the US trade representative and are hopeful that some progress will be made in the next 18 months."

 

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15

This article is now closed to comments

skywalker
They should not tell such nonsense. Business and the political system system are two different things. Perhaps they mean the opposite of what this article is trying make believe. Core "political" values such as freedom of association, freedom of speech, free press, trade unions, freedom to demonstrate, freedom to express opinions and views, the freedom and power to shape political views and will might be rather dangerous to businesses. Look at the so called free and democratic world: Businesses are actually more difficult there then in totalitarian countries.
They should admit that they are rather worried about Hong Kong becoming too free and too democratic and too political.
dead2k1
can you stop posting comments you wrote in gibberish and translated using google translate from gibberish into more gibberish? Thank you very much.
You have the freedom to speak. But if you'd like to be heard speak in a way people can understand....
jd.salinger.3154
To the contrary, Hong Kong will be a better place without these leeches. I look forward to the day when the Hong Kong people rename their own streets and harbor.
MingBaakMei
If American companies are worried about the Rule of Law in HK over the next few years why would they flee to Shanghai?? Singapore maybe, but never Shanghai.
OldPeak Toad
Given the ongoing Singapurification of Hong Kong: Moving towards an institutionalized pseudo democracy, under a with subtle police state methods enforced single party leadership, self censored media, and intimidated population = shut-up, and work hard for the ruling "elite" - maybe there could be more companies moving from Singapore to Hong Kong !
caractacus
Which direction does Mr. Silkenat say is the right one for Hong Kong? The preservation of "rule of law" and an "open and democratic society".
Shanghai does not have any of that and Singapore is a sham of them.
The real threat to Hong Kong's prosperity is CORRUPTION.
andreaswagner
The real threat to Hong Kong is 'mainlandisation'. And I think HK is already caught in that downturning spiral. CY Leung, the 'Red Clown Mayor', the **** contest with the Philippines, the corruption, the racism, the unlimited greed. Hong Kong has become a joke.
ssslmcs01
What you say makes no sense. If I can trust the leagal system and finacial system I would like to do business there. If not I would be reluctant to. An opaque system, like China's leaves a lot of things hanging and making a large investment risky.
aplucky1
hahahahahahaha
these buffoons have been playing that card for years, good leave, nobody cares
321manu
Worse case scenario for HK politically after 2017 will likely still be much better than the highly restricted Shanghai FTZ. So if the political environment is a consideration for business investment, nothing will change with 2017. And if a presence is China is paramount, HK will be better than Singapore regardless of its political evolution. So I really don't know what Mr. Silkenat is talking about.

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