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LettersWhy imposing a national security law on Hong Kong is not in China’s best interests
- Questions over the rule of law in Hong Kong could lead to a mass exodus of capital and jobs while making reunification with Taiwan even more difficult
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With the news that Beijing has dealt a death blow to the “one country, two systems” framework by imposing its own national security law on Hong Kong, we must wake up to a new reality: Hong Kong as we knew it is no more. The Hong Kong spell has been broken.
This may satisfy strident Chinese nationalists and local pro-communist radicals – the only voices the Communist Party will tolerate going forward. But it is very bad news for China and for the Chinese people.
The first consequence is this: as we speak, international fund managers domiciled in Hong Kong are likely to be scrambling to re-evaluate their risks under a legal system that has now been severely compromised. The rule of law has been superseded by the rule of nation.
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When the new security law passes, it will unquestionably become much safer to manage and safeguard large amounts of money in stable and secure legal jurisdictions, such as Singapore and Japan, rather than live in the constant shadow of vague “national security” crackdowns.
This would be the end of Hong Kong as a global financial market and the start of a gradual slide towards becoming a domestic market. In the next five years, a relentless shift of money and talent away from Hong Kong will take place. The stock market already reflected this.
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New law will ‘prevent, stop and punish’ activities endangering national security
New law will ‘prevent, stop and punish’ activities endangering national security
The second consequence is that Taiwan has slipped out of reach as the island wakes up to the fact that one country, two systems has turned out to be a farce. Sure, as the nationalists will point out, the Communist Party can simply invade Taiwan. It certainly has the resources and capability to do so.
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