U.S. Companies in Hong Kong Concerned With New Security Law, AmCham Says
An overwhelming number of American companies operating out of Hong Kong showed their growing concern over the new national security law that China plans to impose on the city. This is according to a survey published on Wednesday by the American Chamber of Commerce, AmCham.
The report, supposedly a temperature of test members sentiment, shows that 15% out of the 180 AmCham members who responded to the survey, 53.3% were very apprehensive about the new security law, while 30% were moderately apprehensive.
“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.”
The new legislation seeks to overshadow Hong Kong’s status as a special administrative region. This status gave its residents basic civil rights. This includes freedom of speech, press, assembly, and religious belief.
“Hong Kong today stands as a model of free trade, strong governance, free flow of information, and efficiency.” Stated AmCham Chairman, Robert Grieves. “No one wins if the foundation for Hong Kong’s role as a prime international business and financial center is eroded.”
Respondents are concerned about Hong Kong’s status as a Financial Hub in Asia.
Last week China’s parliament approved the proposal to impose the legislative law on Hong Kong. This might essentially see Chinese National Intelligence set up bases in the city.
The law threatens to bypass Hong Kong’s “One Country Two Systems” legislative principle. This principle gives it more freedom from Mainland China. Furthermore, it allows it to thrive as a financial Hub in Asia and globally.
The news sparked a new wave of protests amidst the Coronavirus pandemic and global economic recession. It was especially stirred by Hong Kong officials’ evident support for Beijing’s increased hold on the city.
According to Hong Kong’s leader Carries Lam, the law seeks to sanction, curb, and prevent violent criminals in the city. They would be those who are a threat to national security as well as safeguarding the city’s prosperity.
“It will not affect the legitimate rights and freedoms enjoyed by Hong Kong residents. One Country, Two Systems, has been Hong Kong’s top advantage, and a stable and safe society will provide a favorable business and investment environment.”
While authorities in Hong Kong assure residents that the law will not affect the city’s special administrative region’s autonomy, 60% of the surveyed American firms think the law will definitely harm their operations.
According to some respondents, the implementation of the new law will reduce foreign investments in the city. It will make it harder to acquire top-notch talent as many people will be leaving or avoiding Hong Kong.
Despite this possibility, 70.6% of the companies admitted that they don’t have plans or the capital to relocate their businesses. 62.2% admitted they haven’t considered leaving at all.
U.S. And China Hit Hong Kong with a Double-Whammy
On top of the new security law, President Trump threatened to revoke its special trade agreement with Hong Kong if China goes ahead to implement the law in Hong Kong.
This follows U.S. secretary of state, Mike Pompeo’s, statement. He said the Trump administration no longer considers Hong Kong autonomous from mainland China.
“Hong Kong does not continue to warrant the treatment under United States Law in the same manner as the U.S. laws were applied to Hong Kong before July 1997.”
Since it’s handover to China by the British, Hong Kong has always had its own government with a capitalist economy, independent Judiciary, and freedom of speech, at least until 2047.
The U.S. has criticized Beijing’s attempts to undermine freedom In Hong Kong many times. This has led to many pro-democracy protests by Hong Kong residents.
The city might have to contend with new tariffs on exports to the U.S. That is, if the U.S. withdraws the special trade bill with Hong Kong. They may also face changes in the current free dollar exchange status, have restricted access to technology, and sanctions.
The news drove a further divide in the strained trade relations between the U.S. and China. This is at a time when the global economy is experiencing its worst recession since the Great Depression.
Following the potential impact on the immediate and future economic news that will be coming from Hong Kong, AmCham released a statement, calling for clarification from Beijing. AmCham wanted China to be specific to the risks of the new law to future business prospects in the city.
“Definition and details are really necessary to alleviate a fear factor developing in the business community. A Beijing inspired national security law leaves open interpretation of how such an act will be enforced.” said Robert Grieves.
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