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On Hong Kong, finance, and Sino-British relations

Updated: Sep 4, 2021

Jordi Brown

Chief Politics Correspondent | BSc Philosophy, Politics and Economics, UCL

For the past 12 months, the world has watched Hong Kong in a state of near-constant protest (HKET, 2019). Punctuated only by the coronavirus pandemic, the reasons for these protests are wide-ranging. Grievances on the side of protestors include police misconduct (Jones, 2019), the failure of the 2014 “Umbrella Protests” which sought universal suffrage (DW, 2014), and the use of emergency powers to introduce an anti-mask law (SCMP Reporters, 2019). However, the issue that could be considered to have kick-started these protests in June 2019 was a proposed bill that would allow the extradition of Hongkongers to mainland China and Taiwan (The Government of the Hong Kong Special Administrative Region, 2019). This has always been a contentious issue – the “one China, two systems” framework should in theory provide Hong Kong with broad freedoms and legal autonomy. Many protestors worry that the extradition bill is an erosion of this freedom (Mayberry, 2019).

Eventually, this bill was withdrawn. However, in May 2020 the decision to draft a new national security law on behalf of Hong Kong was proposed by Beijing. This would effectively bypass the Legislative Council of Hong Kong. This law aims to:

safeguard national security, in order to effectively prevent, stop and punish acts and activities to split the

country, subvert state power, organize and carry out terrorist activities and other behaviors that seriously

endanger national security, as well as activities of foreign and external forces to interfere in the affairs of the

HKSAR (Xinhua, 2020)

What many in Hong Kong will see as infuriating is Beijing’s unashamed use of a legal loophole to pass legislation that, in their eyes, should be strictly within the purview of the once-British territory. Perhaps one of the most concerning implications of this legislation is that it will allow China to establish intelligence agencies in Hong Kong (Kuo, China threatens 'countermeasures' against UK over Hong Kong crisis, 2020). The worry here is that agents acting under the jurisdiction of these intelligence agencies will be able to harass journalists and other public figures critical of the government (Kuo & Yu, Hong Kong: what are the implications of China's anti-sedition laws?, 2020). It is this fear of surveillance in the name of anti-sedition that has spurred on the latest round of protests.

What implications will China’s actions, as well as the ongoing protests, have on both China and Hong Kong’s global standing? In response to the manner in which China brought in the national security law, the United States announced that they no longer saw Hong Kong as autonomous from China. The concern here is that Hong Kong’s special trade status with the US could be revoked, potentially plunging the region into the same trade war that has plagued Washington and Beijing for so long now (Manson & Sevastopulo, 2020).

Across the Atlantic, the British government has said that any Hongkongers eligible for a British National (Overseas) passport will have visa rights to enter the UK extended from six months to twelve months and “provide a pathway to future citizenship” (Hughes & Yang, 2020). China is the UK’s fourth largest source of imports, and the UK imported £44.7 billion in goods and produced a trade deficit of £22.1 billion in 2018 (Ward, 2019). In spite of this reliance, the British government has opted to firmly condemn China at a time when cordial international relations will be needed to secure trade deals against the backdrop of Brexit. That Boris Johnson would use the South China Morning Post to remind Beijing of “one country, two systems” and threaten a change in immigration rules speaks volumes as to the UK’s position (Johnson, 2020). On the flipside, Johnson’s actions could be construed as a meaningless gesture. Not only is the British National (Overseas) passport only available to people who applied before 1 July 1997 (HM Government, n.d.), but is it realistic to expect Hongkongers to up sticks and move halfway across the world? China’s response to Mr Johnson is that the UK should “recognise and respect the fact that Hong Kong has returned” to China (Yang, 2020).

Of course, questions will linger as to whether Hong Kong can retain its competitive edge in the finance industry. Currently, banks including HSBC and Standard Chartered have supported the national security law. These firms will want to toe the Chinese line so as to not stoke political instability that is bad for business. Furthermore, they will not want to lose revenue in the Chinese mainland to other banks (Riordan, 2020). But a prolonged discontent among Hongkongers, combined with a possible exodus of immigrants to the United Kingdom, will only harm Hong Kong’s reputation as a financial hub. Indeed, the investment bank Nomura have said that they are “seriously” looking at the scale of their operations in the region (Lewis, 2020).

Hong Kong finds itself at a crossroads. Will the protestors – desperate for universal suffrage and a chance to decide their own history – prevail? But with Chinese president Xi Jinping warning that any attempt at separatism will lead to "bodies smashed and bones ground to powder" (BBC News, 2019), it is hard to see what will stop the world’s second largest economy (International Monetary Fund, 2019).


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