Rocky Road Back to Mainland: Beijing imposes security law on Hong Kong
June 10, 2020
2 min read
What's going on here?
China’s National People’s Congress (NPC) announced that it would introduce a national security law on Hong Kong, banning any act that endangers China’s national security, including subversion, separatism, terrorism and foreign interference. The decision caused Hong Kong’s main stock index to tumble by 5.6%.
What does this mean?
China has formally approved the decision to impose a controversial national security law on Hong Kong, bringing the semi-autonomous territory further under Beijing’s control. The introduced charges under the new legislation are often used in mainland China to silence dissenters and political opponents. This decision was heavily influenced by last year’s pro-democracy protests in response to a proposed extradition law.
The decision has prompted widespread condemnation and anxiety in Hong Kong, worsening unrest in the city. Thousands of Hong Kongers took to the streets to protest, where at least 360 people were arrested. The news has already sparked uncertainty among foreign investors as increased Chinese intervention threatens Hong Kong’s autonomy and political freedoms. Reportedly, wealthy residents have started moving their funds, fearing Chinese authorities will be able to seize their wealth.
What's the big picture effect?
Hong Kong was returned to China by Britain in 1997, under the “one country, two systems” regime, which guaranteed Hong Kong a degree of autonomy, including an independent judiciary. The NPC, however, has the power to alter Hong Kong’s mini-constitution. The security law will enable Beijing to set up its own law enforcement agencies in Hong Kong. Chinese officials have promised that the law will only be aimed at tackling the “growing terrorism” in the territory (a callback to the protests of last year).
Residents are worried that this will affect their right to free speech and to protest. Many fear that due to the broad definition of “national security” almost any protest or criticism can be seen as violating the law. At stake are also Hong Kong’s independent judiciary and loose business regulations. Shortly after the enactment of the law, US Secretary of State, Mike Pompeo, announced that the US no longer considers Hong Kong autonomous from China. President Trump then announced that he would revoke Hong Kong’s preferential trade status. Following the announcement, Boris Johnson also stated that Hong Kongers eligible for a British Overseas Passport (a 2nd class British passport) would be allowed to live in Britain on a one-year extendable visa. China has promised repercussions.
As a result, the credibility of Hong Kong as Asia’s financial hub has been questioned. Chinese Foreign Minister Wang responded to doubts about investor confidence claiming that the law “will improve Hong Kong’s legal system, bring more stability, stronger rule of law and a better business environment”. Despite reassurance from officials, money has already begun to flow out of the city and into Singapore, a regional safe haven. As of March 2020, foreign currency deposits in Singaporean banks had nearly doubled compared to the previous year, totalling $15bn.
For investors, the risk factor for agreements made in Hong Kong has been raised. For protesters and citizens of Hong Kong, the risks are infinitely greater.
Report written by Selin Alagoun
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