US Companies in Hong Kong Concerned About Impact of Beijing’s Security Law: Survey

June 3, 2020 Updated: June 3, 2020

Many U.S. companies in Hong Kong expressed concern about Beijing’s decision to implement a national security law in the former British colony, according to a business survey released on June 3.

Beijing adopted the law after a ceremonial vote by its rubber-stamp legislature on May 28. The law has drawn international criticism for threatening Hong Kong’s autonomy and freedoms, which were guaranteed when the territory transferred sovereignty from Britain to China in 1997.

The law would outlaw activities that the Chinese regime considers related to secession, subversion, terrorism, and foreign interference.

The American Chamber of Commerce (AmCham) in Hong Kong polled 180, or 15 percent of its members from June 1 and June 2. The majority of those polled were U.S. companies, with a third being Hong Kong companies and firms from other countries.

“Well over half of our respondents said they were very concerned or moderately concerned by the national security law while nearly half of the respondents saying they feel pessimistic about the city’s medium to long term outlook,” stated AmCham President Tara Joseph, according to the survey.

53.33 percent said they were “very concerned” and 30 percent said they were “moderately concerned” about the national security law.

The organization also recorded its members’ specific concerns. One unnamed member stated: “It may curtail basic civil liberties and undermine due process and rule of law, leading to greater public strife and mistrust in the current government.”

Another said: “It will damage the overall business environment of HK that is used to being free with fair legal, financial and juridical systems.”

Asked whether their business operations in the city would be harmed by the security law, 60 percent said they believed they would be. One member wrote: “This move will likely cause capital outflows and reduction in foreign investment into HK, which will also cause more job losses for the people of HK.”

When asked about their top concerns about the law, 64.44 percent said they were worried about the “ambiguity in the scope and enforcement of the law,” while 56.67 percent said they were worried about the impact on the city’s independent judicial system.

The Chinese regime is expected to draft specifics of the law in the coming months.

70.56 percent said they had no plans to move their assets or business operations out of the city. The remaining percentage said relocation was being considered, with Tokyo, Taipei, Sydney, Bangkok, London, and the United States among their choices.

48.33 percent said they were pessimistic about the medium to long term future, while 36.67 stated they were pessimistic over the short term but confident over the medium and long run.

The survey also asked about President Donald Trump’s decision to revoke Hong Kong’s special trading status under U.S. law. 73.89 percent said they will “wait and see” about the decision, while 18.33 percent said they would reduce investments in the city.

One member said that after Trump’s announcement, the company was considering taking steps “to set up a new legal entity in a sovereign country in the region.” Another member wrote that it was planning to open a “sister company in Singapore.”

Meanwhile, the U.K. Prime Minister Boris Johnson wrote in an opinion article published in the South China Morning Post, that he would change U.K. immigration rules if the security law was implemented in Hong Kong.

Johnson wrote that about 350,000 people in Hong Kong hold British National Overseas passports and another 2.5 million Hongkongers would be eligible to apply for them.

Hongkongers born before the territory reverted to Chinese rule in 1997 have such passports.

“If China imposes its national security law, the British government will change our immigration rules and allow any holder of these passports from Hong Kong to come to the UK…and be given further immigration rights, including the right to work, which could place them on a route to citizenship,” Johnson wrote.

Johnson warned that the national security law would “curtail its [Hong Kong’s] freedoms and dramatically erode its autonomy.”

U.K. foreign secretary Dominic Raab made similar comments about the immigration plans before the House of Commons on June 2.

Follow Frank on Twitter: @HwaiDer