As the Hong Kong government attempts to justify the police force’s disproportionate use of tear gas , rubber bullets and pepper spray, it is helpful to remember the exceedingly moderate character of the corporate staff, small-business owners and students who were out on the streets protesting this week. Historically, it has been rare in Hong Kong’s politics for the international business lobby to find itself on the same side as the city’s democrats. In 2014, when the city was readying for the Occupy Central pro-democracy protests, the “big four” accounting firms warned that investors could leave Hong Kong over the protests. Leading international chambers of commerce took out ads attacking the protests , saying that the demonstrations may “cripple commerce in the city’s central business district”. But proposals to change the city’s extradition law united these diverse interest groups in an unprecedented way. On Wednesday, Ernst and Young and Deloitte, two of the “big four” firms, previously so publicly opposed to the Occupy protests, granted their employees “flexible working hours”, which allowed some to attend the protests. Around 100 businesses announced a general strike only days after 1 million people turned up to protest. The International Chamber of Commerce , the American Chamber of Commerce and some European chambers queued up to protest against the bill on the basis that the erosion of the rule of law and fundamental freedoms implied by proposals to allow Hong Kong to extradite people to mainland China would reduce the attractiveness of the city as an international financial hub. It is unusual for business leaders to make human rights arguments of this kind, but they felt that their own personal safety was at stake. I recently conducted a series of interviews with senior executives at international banks and financial experts which exposed the reasons for this. For many of them, one of the core reasons that Hong Kong is attractive is that it provides a sense of security as a result of its robust legal system. Those that I spoke to were concerned that the extradition bill provides the possibility of the seizure of assets and bribery convictions. One experienced executive pointed to a second reason for business unease: the sense of a downward trajectory in the city’s politics. A series of episodes which suggest an erosion in political rights and freedoms, including the abduction of booksellers and the seemingly bizarre decision to deny a visa to the Financial Times ’ Asia editor, resulted in the extradition law debate being seen as a proxy for wider concerns about the erosion of what makes Hong Kong special. The strength of feeling among business leaders is undoubtedly one of the reasons that the Hong Kong government has chosen to suspend the bill. The sustainability of the “one country, two systems” model requires local and international businesses to buy into the Hong Kong brand. One experienced financial analyst said to me: “The international investment banks and investors are the ones who decide where the Asian financial centre is. That’s why China cannot just move their international financial hub to Shanghai.” Extradition bill: business groups’ relief at decision to delay legislation There are a number of possible reasons the Hong Kong government initially ignored the pressure from the business community. The presidency of Xi Jinping has resulted in a new Chinese government approach towards Hong Kong. Historically, the central government in Beijing has had two priorities for Hong Kong: control and commercial prosperity. The recent crackdown on political rights and freedoms suggests that they are putting a greater onus on control – even when it might be detrimental to their own interests. A second possible factor is the increasing influence of red capital in Hong Kong. In 1997, Chinese firms made up only 16 per cent of the market value of the Hong Kong stock exchange; now they make up 68 per cent. Chinese companies regularly win land deals and property insurance contracts in housing estates. In an interview in 2016, James Tien Pei-chun, former legislator and a former chairman of the pro-business Liberal Party, said: “When a country can fully control our main economic arteries, when the boss has full say, the kind of good life and democracy that we all yearn for will be much more difficult to attain.” Perhaps Beijing has decided that the time has come for the business lobby to toe the line. Despite extradition protests, Hong Kong assets remain sound However, many in Hong Kong’s establishment still recognise that alienating the international business lobby for either of these reasons would have serious consequences. Hong Kong’s importance to China should not be underestimated. Academic Brian Fong recently wrote an article highlighting that Hong Kong is the single most important capital provider to China and its largest source of inward direct investment. Hong Kong has an important role in China’s Belt and Road Initiative and its Greater Bay Area plans. One property tycoon told me: “The American chamber and British chamber [of commerce] are here to make money – they do not want to upset China. If you scare them, who will help you develop the Greater Bay Area?” The Hong Kong government knows it must retain business confidence if it wants to continue enjoy these privileges and serve its function to China. The way that business mobilised against the extradition law shows that the cumulative effect of the erosion of freedoms and the rule of law in Hong Kong is putting this under threat. Business leaders are clearly seriously concerned by these proposals, as well as the wider political situation. As Hong Kong government officials carry out a postmortem examination of the events of recent months, they should take this as a warning: they must safeguard civil and political liberties or seriously risk jeopardising their comparative advantage. Johnny Patterson is the director of Hong Kong Watch, a London-based non-governmental organisation