Most American businesses operating in Hong Kong have grown increasingly concerned about the new national security law, according to a survey conducted by the American Chamber of Commerce (AmCham).
The poll, which AmCham labeled a “temperature test” of members’ sentiments rather than a scientific study, included 183 companies. A majority of the responses came from companies in the financial services or technology industries, both of which could be directly affected by provisions in the law.
Seventy-six percent of companies polled stated that they were “somewhat” or “extremely” concerned about the sweeping powers of the new legislation, which would prohibit acts of secession, subversion, terrorism and collusion with foreign forces.
Over 51% of respondents said they felt less safe living and working in Hong Kong as a result of the enactment of the new law and 48% worried that the unknown risks of the new law could negatively impact their business and freedoms.
“The potential for arbitrary application of the national security law is frightening to many and Hong Kong’s judiciary is powerless to protect the people and rule of law. Some of our employees have already voted with their feet to leave for safer countries. Many others are very concerned and considering their options,” said one anonymous respondent.
“Vague language makes the law a perfect tool … and it is already leading to the kind of self-censorship that is so effective at stifling public discourse in China,” said another.
Others expressed concerns over data security issues and the general infringement on Hong Kong’s guaranteed autonomy, saying that “the clauses on control of the media, education and extraterritoriality are shocking.”
The president of AmCham Hong Kong, Tara Joseph, said that “A Beijing inspired national security law leaves open an interpretation of how such an act will be enforced. How will it affect the rule of law? Will it mean limiting online, press and personal freedoms?”
However, a senior lawyer at a global law firm in the city who has come to support the legislation, stated that while the law would track people and take action against those who show signs of stepping out of line, it “is intended to prevent unrest from flaring up again, nipping the unrest in the bud before it happens.”
Furthermore, the study found that while most companies expressed interest in scaling back operations in Hong Kong, they were mostly unwilling to leave completely and sacrifice their access to the Chinese market.
Only around 35% of companies reported that they were considering relocating capital, assets or business operations out of the city.
Richard Harris, the founder of Port Shelter Investment Management, spoke about the AmCham poll findings, saying, “I’m not too surprised [by the survey results] because many businesses are going to think about shrinking down,” citing a “natural erosion” of talent wishing to remain in Hong Kong.
On the other hand, 51% of participating firms said either that the new legislation would not negatively affect their operations or that it might even bring them benefits, with roughly 26% of firms saying that they felt safer as a result of the new law.
Nearly 65% of the companies polled further stated that they had no plans to leave Hong Kong due to possible economic powers that may come with the formation of the Greater Bay area, which would link Hong Kong, Macau and nine other cities in China’s Guangdong province.
“Getting violence off the streets makes all of Hong Kong feel safer. This law will help with that,” said one respondent.
Despite reporting polarizing views on the law’s potential effects on business in Hong Kong, the study also found that up to 68% of firms said they still want to “wait-and-see” how the law unfolds before they react more drastically.
“Do people here like the national security law?” said one senior lawyer at a global law firm in Hong Kong who spoke to The Financial Times ahead of the law’s implementation. “It’s like asking, ‘Do people like bitter medicine with terrible side effects? The medicine will hurt for sure but we have no choice but to take it now.”
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