“We want to create an atmosphere that is as free and open as possible, that allows … everyone in Hong Kong to be able to operate in a way that’s free of coercion and intimidation and is consistent with what [they] were promised in the [Sino-British] Joint Declaration,” he said.

Hong Kong national security law: what is it about? Read the full text

“Hong Kong has been a successful economy precisely because of its openness and transparency. When you start undermining that with opaque measures [of] extraterritoriality, vaguely defined criteria, then you start to undermine what makes Hong Kong work.”

After the programme, he said it would be a tragedy if Hong Kong’s popular anti-government protest slogans fell foul of the law.

In a statement issued on Monday evening, a government spokesman said the implementation of the “one country, two systems” principle in Hong Kong was entirely an internal matter of Beijing and no other state or legislature had the right to intervene.

“Social unrest, the failure of the rule of law and a lack of protection for corporate assets and personal safety are genuine factors that would undermine investors’ confidence.

“As a matter of fact, these were the factors that led to the fall of Hong Kong’s international rankings in the past year. The US has its own national security legislation, but we have never heard that such legislation affected the economic development and business environment of the US,” the spokesman said.

Reacting to Smith’s comments, Ip Kwok-him, a Hong Kong deputy to China’s top legislature, the National People’s Congress, said the fact that Smith was able to criticise Beijing on a public broadcaster showed that Hong Kong still enjoys a high degree of freedom.

“It was quite rare for the US consul general to speak on any local radio programme, I think Beijing’s foreign ministry is going to have a word about it,” he said.

“The US is a major target of the national security law, and Washington must be upset about the legislation. Under this context, Smith must represent his government in speaking up, or he could be fired.”

The controversial legislation Beijing tailor-made for Hong Kong outlaws acts of secession, subversion, terrorism and collusion with foreign forces in the city’s affairs, and carries a maximum penalty of life imprisonment.

The law was enacted just before Hong Kong marked the 23rd anniversary of its return to Chinese rule on July 1, sparking concerns over the fate of the one country, two systems principle that has guided the city’s governance since 1997.

Asked if Smith could be breaking the new law, Basic Law Committee member Priscilla Leung Mei-fun said it was not unlawful to criticise anyone.

“Criticising the law alone does not constitute any of the four offences of the new law, as everyone can have his or her own views. You can’t say they are provoking hatred towards authorities unless there are substantial acts,” she said.

In an interview with the Post on Thursday, Smith said the US consulate in Hong Kong would continue to interact with the city’s opposition politicians, even with foreign interference outlawed under the new legislation.

Hong Kong national security law: how will it affect businesses?

The US Congress this month passed the Hong Kong Autonomy Act, which penalises Chinese officials who erode Hong Kong’s autonomy as well as banks and firms that do business with them, sending it to the White House for President Donald Trump’s signature.

“It’s very important for us to highlight the fact that to the extent that mainland China starts treating Hong Kong more like the mainland, then the way we treat Hong Kong has to reflect that as well,” Smith told the state broadcaster on Monday.

Hong Kong national security law official English version:

He warned that the erosion of Hong Kong’s autonomy by Beijing would undermine the city’s success as an international business hub.

“I think we’re troubled by the provisions of the national security legislation that refer to foreign collusion. There’s been an ongoing propaganda campaign by Beijing to point to foreign scapegoats … We reject those accusations. Of course what’s happening in Hong Kong reflects [their people’s] own interests and concerns.

“Hong Kong, to be successful, has to maintain what sets it apart from mainland China and that includes [its] openness, transparency, protection of intellectual property, free expression and all of these attributes that have been the cornerstones of the success of this city,” Smith said.

“You cannot divorce these fundamental freedoms from Hong Kong’s success as an economic hub. In other words, you can’t have one country and two economic and financial systems. Fundamental political and social freedoms are very closely linked to economic success.”

Additional reporting by Natalie Wong and Tony Cheung