The Future of Doing Business in Hong Kong

August 2, 2021 Updated: August 4, 2021

Commentary

Okay, I’ll admit it: I’ve been a longtime fan of Hong Kong. From my first visit to this amazing used-to-be entrepreneurial city in 1971, when it was a jewel as the British Crown colony, providing a window and a door to mysterious mainland communist China, Hong Kong has been a center of freedom, free enterprise, free trade, free speech, and the rule of law.

Over the decades, I’ve visited it more than 130 times. I’ve become good friends with its business, governmental, academic, and media leaders. My wife and I visited our adopted Vietnamese family in their temporary refugee camp in the New Territories before they moved permanently to Virginia. Our son learned to water-ski in Repulse Bay. Our family explored the nooks and crannies of Kowloon, Victoria Island, and the New Territories.

And I’ve ridden with Hong Kong through its ups and downs. Ups such as the peaceful handover to China; the first Cathay Pacific nonstop flight from Hong Kong to Washington; and the city being consistently ranked as the freest economy in the world in the Heritage Foundation’s index of economic freedom. Downs such as financial crises; bird flu; harsh crackdowns on democracy protesters; and now, the Beijing-imposed national security law.

And this time, it’s fundamentally different: The 1997 Chinese Communist Party promise to the world of “one country, two systems” has disappeared.

We noted it at the Heritage Foundation when we stopped ranking Hong Kong as a separate political entity earlier this year.

But now, there’s a difference of opinion: The Hong Kong Commissioner to the United States sent a newsletter on July 30 assuring readers that “the American Chamber of Commerce in Hong Kong—AmCham—has been operating in our city for over 50 years” … and that it “recently reiterated the crucial role the city plays as an international business hub, particularly as a vibrant facilitator of trade and financial flow and its value to American companies.”

That certainly has been the traditional perspective of AmCham, but the Hong Kong government spokesman didn’t tell the readers of his newsletter what else the American Chamber said in its annual membership survey. Here’s the headline from May 12 of this year: “Amcham finds 42 percent of members surveyed are planning or considering leaving Hong Kong.” The survey went on to note that “around 62.3 percent cited discomfort with the national security law as a reason.”

Just last month, the U.S. government, in an unusual “Hong Kong Business Advisory” bulletin headed with the seals of the U.S. Departments of State, Treasury, Commerce, and Homeland Security, spent nine pages—single spaced—warning U.S. companies that “this new legal landscape … could adversely affect businesses and individuals operating in Hong Kong.”

This chilling advisory came out six months into the Biden administration, so it can’t be blamed on “Trump holdovers” or hard-line voices in the executive branch bureaucracy.

According to the joint memorandum, the risks for businesses flow from the imposition of the national security law: data privacy risks; risks regarding transparency about business information; and risks for businesses with exposure to sanctioned Hong Kong or Chinese entities or individuals.

When four cabinet secretaries in the U.S. government issue a lengthy, detailed joint document warning of “risks and considerations” of doing business in Hong Kong, it’s past time for happy talk and business as usual.

Hong Kong has lost its formerly unique status as the freedom-based crossroads between East and West, despite the Hong Kong Commissioner to the United States’ protests to the contrary.

Dr. Edwin Feulner is the founder and former president of The Heritage Foundation and the chairman of the Victims of Communism Memorial Foundation.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

Edwin J. Feulner
Edwin J. Feulner
Dr. Feulner is the founder and former president of The Heritage Foundation and the chairman of the Victims of Communism Memorial Foundation.