Foreign chambers in Hong Kong take wait-and-see approach to new security law while local groups expect business as usual
- Many foreign enterprises already felt safe and legally protected in Hong Kong, says German Chamber of Commerce president
- Hong Kong Association of Banks says law will allow the city to focus on economic and developmental priorities
Local business groups, meanwhile, said they believed the legislation would not affect normal transactions, with one hoping the government could offer preferential policies to attract trade, as they feared possible sanctions from the United States might affect market sentiment.
The varied responses emerged a day after lawmakers unanimously passed the Safeguarding National Security Ordinance on Tuesday. The legislation, a requirement under Article 23 of the city’s mini-constitution, is set to take effect on Saturday. It will complement the national security law imposed by Beijing in 2020.
Both Beijing and local authorities have consistently sought to reassure the sector that the new legislation will not disrupt the normal operations of foreign enterprises, but rather it aims to create a secure business environment.
Johannes Hack, president of the city’s German Chamber of Commerce, said on Wednesday that many foreign enterprises already felt safe and legally protected in Hong Kong, and that reassurance would come from how the legislation was used.
“If there are no prosecutions, actual or pondered, involving businesses’ exchanges with their various stakeholders, that will provide reassurance,” Hack said, adding that “the proof of the pudding is in the eating”.
He said that if there were any prosecutions, businesses and chambers would review them to see how applicable they were to their own dealings.
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Tony Ho, director of the Indonesia Chamber of Commerce, said: “At this moment we don’t see any effect on the Indonesian business community for the national security law or Article 23 law.”
Basil Hwang, vice-chairman of the Singapore Chamber of Commerce in Hong Kong, said it was in the interests of the city and mainland China not only to preserve and keep the existing international business community but to attract more overseas participation.
“I believe that the new laws whilst helpful in their deterrent effect will be enforced lightly and judiciously, and should not adversely impact foreign enterprises in Hong Kong,” he said.
The British, European and Australian Chambers of Commerce declined to comment.
Irons Sze Wing-wai, honorary president of the Chinese Manufacturers’ Association, admitted a single factor was insufficient for improving the local business environment, but having the legislation was better than having none.
“And I don’t think business organisations will go through the coming law provision by provision. At the end of the day, it all comes to whether or not you have the intent to endanger national security. We all know that,” he said.
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Welcoming the law’s passage, the Hong Kong Association of Banks said it would allow the city to focus on economic and developmental priorities, paving the way for sustained stability and prosperity.
Sun Hung Kai Properties, Hong Kong’s largest property developer by market capitalisation, said the law had laid a solid foundation for the various sectors to unite, work together, and strive for economic growth, development and improving people’s livelihoods.
Its comments came a day after brothers Peter Lee Ka-kit and Martin Lee Ka-shing, chairmen and managing directors of Henderson Land Group, said investors and enterprises would enjoy a safer and more stable business environment with the “solid legal barricade” built by the new law.
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But a local business insider who preferred not to be named said foreign investors were “really concerned” about the legislation and its implications, which were not clear at present.
“So they have chosen to stay put for making any business decisions concerning Hong Kong and wait a bit until everything is clearer,” he said.
He also noted that the local business sector has been “mentally prepared” for another round of sanctions from foreign countries, and had started looking for new customers in Southeast Asia and the Middle East.
“But it is always hard to open a new market. Plus, the new customers are not as rich as our previous ones in the old markets like the US,” he added.
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The insider suggested that the central government should now think of crafting preferential policies for Hong Kong to attract foreign capital, as concerns would persist for a period of time.
The legislation spans 39 offences divided into five categories: treason; insurrection, incitement to mutiny and disaffection, and acts with seditious intention; sabotage; external interference; and theft of state secrets and espionage.
Authorities have repeatedly stressed that “normal business operations” would be “fully protected” by the law after some chambers of commerce had voiced concerns about the definitions of the terms “external forces” and “state secrets” during the bill’s consultation period.
Chief Executive John Lee Ka-chiu said the legislation’s passage allowed the city to “focus on developing the economy,” while the Hong Kong and Macau Affairs Office said the ordinance “further enhanced” the rule of law and social stability.
American politicians have proposed a string of measures, including a revaluation of business and travel advisories for the city, the imposition of sanctions on more individuals and the removal of diplomatic privileges from Hong Kong economic and trade offices in the United States.
