American businesses in Hong Kong face operational risks similar to those in mainland China: US envoy

City’s strength as a business hub ‘will continue to erode’ if it stays on current trajectory, says US consul general in Hong Kong, citing national security law

Hanscom Smith’s wary sentiments delivered to Washington think tank echoed by city’s former AmCham leader, Barclays global head, and ex-Hong Kong lawmaker

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Hanscom Smith, the US consul general to Hong Kong, says the city’s autonomy must be protected for it to flourish. Photo: May Tse

Published: 6:50am, 7 Jul 2022

The US consul general in Hong Kong warned American businesses that the operational risks they face in Hong Kong are resembling those now in place in mainland China.

Washington’s top diplomat in the city, Hanscom Smith, said Hong Kong’s “strength as a business hub will continue to erode” if it stays on its current trajectory. His grim take came days after the city marked its 25th anniversary of being handed over from British to Chinese rule.

“Just 25 years into the 50 years of a high degree of autonomy promised by Beijing, business and rule of law risks that were formerly limited to the mainland are now increasingly a concern here in Hong Kong,” Smith said on Wednesday at an online seminar hosted by the Centre for Strategic and International Studies, a Washington-based think tank.

“The national security law and actions taken by the mainland and Hong Kong authorities may negatively affect their staff,” he added, listing areas of risk involving “finances, legal compliance, data security, operations, and reputation”.

Smith gave examples of what he saw as heightened risks associated with electronic surveillance without warrants, the surrendering of corporate and customer data to authorities, diminished press freedom, and uncertainties in how Beijing retaliates against companies that comply with sanctions imposed by the US or other countries.