Hong Kong: Concern over China's planned natl. security law met with mixed business reaction, casting doubts over city's freedoms

During its annual Two Sessions in May 2020, China proposed and approved a resolution to impose a national security law on Hong Kong. While the details of the legislation are yet to be set out, it is understood that such acts as secession, subversion and terrorism as well as activities by foreign forces that interfere in Hong Kong could be made criminal. The enactment of the new security law will bypass the legislature of Hong Kong and be implemented by the Hong Kong government upon its promulgation. 

China’s move has shocked both Hong Kong and the international community, as many are worried that it will not only pose significant threats to the freedoms of Hong Kong that have set the city apart from its sovereign, but also violate the principle of One Country Two Systems, upon which the Chinese and British governments agreed as an imperative part of the handover arrangements in 1997 and which has been specified in the Basic Law, the mini-constitution of Hong Kong that would expire in 2047. There are also widespread worries that the rule of law and autonomy of Hong Kong as a Special Administrative Region would be undermined when the new legislation is enacted.

Among other members of the society, the business sector has also voiced out their concerns. A few foreign business chambers have called for clarification of the details of the legislation and urged the government to explain how the integrity of the One Country Two Systems principle would be sustained upon the enactment of the national security legislation. Other companies, including HSBC, Standard Chartered, Jardine Matheson, however, have voiced support for the new law.

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9 June 2020

UK: Aviva Investors "uneasy" at HSBC and Standard Chartered's decision to back Hong Kong security law

Author: Financial News (UK)

“Top shareholder Aviva slams HSBC and StanChart’s Hong Kong stance”, 9 June 2020

Aviva Investors has hit out at HSBC and Standard Chartered's decision to back China’s new security law for Hong Kong, in one of the first signs of disquiet from a big London shareholder on the issue.

In a 9 June statement, equities chief investment officer David Cumming said: “We are uneasy at the decisions of HSBC and Standard Chartered to publicly support the proposed new national security law in Hong Kong without knowing the details of the law or how it will operate in practice.”

Aviva Investors is the asset-management arm of one of the UK’s biggest insurance companies. Its 0.46% stake in HSBC and 1.35% holding in Standard Chartered places it among both banks’ top 20 investors, according to Factset data.

“If companies make political statements, they must accept the corporate responsibilities that follow. Consequently, we expect both companies to confirm that they will also speak out publicly if there are any future abuses of democratic freedoms connected to this law,” Cummings added.

Both banks have faced criticism from City figures and politicians over their decision to publicly back the new Chinese security law…

Both banks declined to comment beyond their statements released…

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8 June 2020

UK: HSBC and Standard Chartered criticised by Conservative MPs for supporting controversial security law in Hong Kong

Author: News Chain (UK)

“HSBC feels heat from MPs after support for controversial Hong Kong law”, 4 Jun 2020

MPs hit out at HSBC… after the bank indicated support for a controversial new law that critics say would limit freedoms for the city’s citizens.

Neil O’Brien, the Conservative MP for Harborough, Oadby and Wigston, said that the bank had stabbed protesters in the back, and called on people to consider switching their accounts.

“If you bank with HSBC you are with a bank that is backing Beijing’s repressive new security laws, designed to snuff out freedom in Hong Kong. Other banks are available,” he said in a post on Twitter.

It came after Peter Wong, HSBC’s chief executive in the Asia-Pacific region, signed a petition in favour of the new law which bans insults to the Chinese national anthem…

Tom Tugendhat, the Conservative member for Tonbridge and Malling, said: “I wonder why HSBC and [Standard Chartered] are choosing to back an authoritarian state’s repression of liberties and undermining of the rule of law? Where does this fit in their definition of corporate social responsibility?”

In a statement, HSBC said: “We respect and support laws and regulations that will enable [Hong Kong] to recover and rebuild the economy and, at the same time, maintain the principle of ‘one country two systems’.”

Standard Chartered said: “We believe the national security law can help maintain the long-term economic and social stability of Hong Kong. The ‘one country, two systems’ principle is core to the future success of Hong Kong and has always been the bedrock of the business community’s confidence…

In response to HSBC and Standard Chartered’s statements, Downing Street insisted that China risked breaching an international treaty unless it changed course…

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8 June 2020

USA: Bipartisan support to pass bill imposing sanctions on banks and officials responsible for Hong Kong national security law

Author: Reuters

“U.S. Senator sees strong bipartisan support for Hong Kong sanctions bill”, 4 Jun 2020

A co-sponsor of a U.S. Senate bill to impose sanctions on Chinese officials and local banks for violations of Hong Kong’s independence said… there was interest from both Republicans and Democrats in passing the legislation quickly.

“There’s bipartisan interest in getting legislation like this done as soon as possible,” Republican Senator Pat Toomey told a Banking Committee hearing on U.S. options for Hong Kong.

Toomey and Democratic Senator Chris Van Hollen, another banking committee member, offered their bill… in response to China’s plans to impose new national security legislation on Hong Kong…

The bill would freeze U.S. property assets of individuals responsible for implementing a proposed Hong Kong national-security law. Unlike past legislation, Chinese banks doing significant business with those officials would also be targeted, cutting them off from American counterparts and limiting access to U.S. dollar transactions.

The bill is several steps from becoming law, but it would add to pressure on banks over China…

[Also referred to HSBC and Standard Chartered]

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7 June 2020

UK: HSBC and Standard Chartered criticised by Labour MPs for supporting controversial security law in Hong Kong

Author: The Guardian (UK)

“Labour takes British-based banks to task over China's Hong Kong policies”, 6 Jun 2020

Labour frontbenchers have criticised the chief executives of HSBC and Standard Chartered banks for supporting China’s political leaders, urging them to revoke their support for Beijing’s controversial security law, which they say threatens democratic rights in Hong Kong. They warned the banks that they could face a boycott.

In letters sent to the HSBC boss Noel Quinn and Standard Chartered’s chief executive, Bill Winters… the shadow foreign secretary, Lisa Nandy, and the shadow chancellor, Anneliese Dodds, said they had “profound concerns” that both banks had backed Beijing’s new rules, which violate Joint Declaration treaty commitments and could limit freedoms for HK citizens…

The Labour MPs also wrote to their counterparts in Downing Street – the foreign secretary, Dominic Raab, and the chancellor, Rishi Sunak – asking for their support in challenging the two banks over their positions.

The letter said the ministers’ response would be a “test of the UK government’s resolve” on human rights, civil liberties and international law…

The letter stressed that, despite their global operations, both banks were still headquartered in London. “It therefore has a responsibility to uphold the democratic values and practices that we hold dear in this country…

 “We therefore urge you to issue a statement rescinding HSBC’s support for China’s new national security law, at the earliest opportunity.” A similar letter was sent to Standard Chartered…

HSBC and Standard Chartered were both contacted for comments on Labour’s letter.

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5 June 2020

Hong Kong: HSBC and Standard Chartered publicly back controversial security laws

Author: BBC

“HSBC and StanChart back China security laws for HK”, 4 June 2020

HSBC and Standard Chartered have given their backing to China's new security laws for Hong Kong.

Both banks made statements saying the proposed law can help maintain long-term stability in the troubled city.

… HSBC's Asia Pacific chief executive Peter Wong signed a petition backing the law which has been widely criticised.

But this backing comes as Japanese bank Nomura said it was "seriously" examining its presence in Hong Kong.

It is unusual for a bank to enter into political debate, particularly one as controversial as China's new security laws which many feel could mark the end of Hong Kong's unique freedoms.

HSBC's statement noted that the Hong Kong Association of Banks had already issued a statement saying the law would contribute to a stable business environment.

… HSBC "respects and supports all laws that stabilise Hong Kong's social order," it said in a post on social media in China…

Standard Chartered also has a strong presence in Asia. "We believe the national security law can help maintain the long-term economic and social stability of Hong Kong," it said in a statement…

Meanwhile, Japanese investment bank Nomura said it was reviewing the scale of its operations in Hong Kong.

The bank's chief executive, Kentaro Okuda, said that while Hong Kong remained its most critical Asian hub outside Japan, the situation now was "not the same as it used to be" in an interview with the FT…

HSBC didn't respond to a request from the BBC for further comments about the social media post.

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5 June 2020

Hong Kong: Leading conglomerates voice support for controversial security law

Author: Bloomberg

“Jardine Voices Support for China’s Security Law in Hong Kong”, 3 June 2020

Jardine Matheson Holdings Ltd., one of Hong Kong’s oldest British trading houses, joined major businesses voicing support for a controversial national security law drafted by China’s central government for the city.

“Establishing a legal framework for safeguarding national security is very important and can ensure continued investment in Hong Kong,” the group said in a full-page advertisement in the pro-Beijing newspaper Ta Kung Pao…

The 187-year-old “hong,” or British trading firm in Hong Kong, is lining up behind legislation that has provoked street protests by pro-democracy supporters, who say the law gives Beijing too much power. Top business leaders including the city’s richest tycoon, Li Ka-shing, have defended Beijing’s move…

Li, founder of retail, telecommunications and ports conglomerate CK Hutchison Holdings Ltd… sent statements to pro-Beijing papers in which he defended China’s right to address its national security concerns. His son Victor Li, who took over his business empire in 2018, also issued a statement expressing hope that the new law can help the city stabilize and recover.

Swire Pacific Ltd., the parent company of Hong Kong-based airline Cathay Pacific Airways Ltd., and Sun Hung Kai Properties Ltd., the city’s largest developer, are also among top companies that have voiced support for the law…

[Also referred to HSBC, Mandarin Oriental and Dairy Farm]

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5 June 2020

Hong Kong: More than half of US firms in the city are "very concerned" about national security law, survey shows

Author: CNBC

“More than half the U.S. firms in Hong Kong are ‘very concerned’ about the new security law, survey shows”, 3 June 2020

More than 80% of the U.S. companies in Hong Kong surveyed by the American Chamber of Commerce said they’re concerned about China’s plan to impose a new national security law in the city.

Out of the 180 AmCham members that responded to the survey earlier this week, 53.5% were “very concerned,” while 30.0% were “moderately concerned” about the security legislation. The survey results were published on Wednesday and are not intended to be scientific, said the chamber.

Respondents cited concerns such as threats to Hong Kong’s overall business environment, as well as the legislation’s potential impact on freedom of speech and other “basic civil liberties.”…

The process of enacting China’s new law will bypass Hong Kong’s legislature, which raised concerns over the city’s eroding autonomy promised under the “one country, two systems” framework…

The new law is aimed at prohibiting secession, subversion of state power, terrorism activities and foreign interference — some reports said it could also lead to Chinese intelligence agencies setting up bases in Hong Kong. Critics say the law could grant the central government broad powers to crack down on dissent and protesters…

…  60% of U.S. firms surveyed by AmCham thought the law would harm their business operations.

Some companies said implementation of the law could result in a reduction in foreign investments into the city, as well as greater difficulty in hiring as people leave or avoid Hong Kong…

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4 June 2020

Hong Kong General Chamber of Commerce says most members see positive or no impact by national security law in long run, but concerned about short term uncertainties

Author: South China Morning Post (Hong Kong)

“Hong Kong businesses see positive impact of national security law, worry most about foreign sanctions, chamber survey shows”,  1 June 2020

Hong Kong’s business community, backed by some of its famous billionaires is upbeat on the benefits of a national security law for the city, according to an industry survey, while expressing concerns about foreign sanctions on their operations.

About 61 per cent of the respondents said the law will either have a positive or no impact at all on their businesses over the long term, according to the Hong Kong General Chamber of Commerce. Some 54 per cent of them viewed the legislation as “controversial” and hence will have a negative impact on their businesses in the short term, citing foreign sanctions as their biggest concern.

The chamber surveyed its 4,000-odd members… as Beijing endorsed the legislation tailor-made for the city, of which 418 responded with answers…

“The chamber calls for detailed provisions of the law and specific implementation measures to be announced as soon as possible to address the concerns stemming from the uncertainties,” said George Leung Siu-kay, chief executive of the chamber…

“We oppose any sanctions on Hong Kong as they will not only hurt local companies but also all international companies operating in the city,” he said in a phone interview. Leung, who took up the role on May 1 after leaving HSBC, also warned that trade sanctions on Hong Kong may spread the pain overseas…

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31 May 2020

Hong Kong: Employees and unions allege companies of intimidating workers who speak out in protests and pressuring them to echo govt's official line

Author: New York Times

“In Hong Kong, China Threatens Businesses and Workers”, 31 May 2020

China and its allies are using threats and pressure to get business to back Beijing’s increasingly hard-line stance toward Hong Kong, leading companies to muzzle or intimidate workers who speak out in protest…

Lawyers, bankers, professors and other professionals interviewed by The New York Times described a growing culture of fear in offices across the city. Employees face pressure to support pro-Beijing candidates in local elections and echo the Chinese government’s official line. Those who speak out can be punished or even forced out…

"We’ve seen a rapid deterioration in free expression in Hong Kong since the anti-government protests began,” said Jason Ng, a former lawyer for BNP Paribas…Mr. Ng was punished by his former employer for writing his political views on his Facebook page…The comments, which were later taken down, were heavily criticized in China’s state media and on the Chinese internet. BNP apologized and pledged to take immediate action. Mr. Ng then left the bank…

Something similar happened to Ka-chung Law, a high-profile economist at Bank of Communications, a state-backed Chinese bank…in early October, Mr. Law said, he emailed an article to his team that was critical of China and discussed ways in which the United States could punish Beijing economically. One of his bosses called him in…Mr. Law said he was told to resign. He did… The bank declined to comment…

… before Hong Kong held district council elections in November, Mr. Choong’s [who works for a Chinese state-backed company] manager approached him with a request. Vote No. 2, he was told. That was the number for the pro-Beijing candidate in his district… as Beijing pushed on with plans to implement its national security law in Hong Kong, pro-Beijing groups fanned out across the city in search of support. According to some local workers, their bosses helped in the effort.

Managers at Chiyu Banking Corporation, a local bank owned by Xiamen International Bank, sent a WhatsApp message to employees asking them to sign a petition, according to a complaint filed by the Hong Kong Financial Industry Employees General Union. Once they had done so, the complaint said, they were told to screenshot their signature and share it. Similar instructions were sent to employees at Wing Lung Bank, according to the union. Workers at other banks said they had received similar messages, said Ka-wing Kwok, the union’s chairman, but the union was unable to verify them. Chiyu Banking and Wing Lung Bank did not respond to requests for comment. Hong Kong regulators declined to comment…

[Also referred to HSBC, Cathay Pacific, NBA, Coach, Givenchy and Versace]

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25 May 2020

Hong Kong: Foreign business chambers call for clarification on proposed national security law

Author: South China Morning Post (Hong Kong)

“Two Sessions 2020: national security law adds fresh risks to Hong Kong’s status as business hub, commerce chambers warn”, 22 May 2020

The proposed national security law for Hong Kong could undermine the city’s status as a business hub… an influential trade group has warned…

“Definition and details are really necessary to alleviate a fear factor developing in the business community,” AmCham [American Chamber of Commerce] president Tara Joseph said…

“How will it affect the rule of law? Will it mean limiting online, press and personal freedoms? People may also ask whether Beijing’s concern over foreign interference adds an element of risk to foreigners living here.”…

“The Hong Kong government could help by stepping in to ensure the safety of overseas executives, and reassuring international businesses facing new uncertainties here,” she [Tara Joseph] said…

Any moves that questioned the integrity of the one country, two systems policy, which ensured the city’s high degree of autonomy and transparency, were “a cause for great concern”, the German Industry and Commerce warned.

And MexCham president Mauricio Lozano urged Beijing to clarify how the law would be enforced and called on the city’s administration to demonstrate how the one country, two systems principle would be supported after the legislation is enacted…

He [Mauricio Lozano] said he was worried about the prospects of freedom of speech and the free flow of information…

The Hong Kong General Chamber of Commerce called for clear details of the legislation to ease the uncertainty over the potential impact on confidence in the city’s business environment…

But some of the biggest pro-Beijing local chambers supported the legislation.

The Chinese General Chamber of Commerce said it was necessary for the central government to safeguard national security in Hong Kong…

Chamber chairman Jonathan Choi Koon-shum dismissed concerns the law would hurt foreign investors’ operations in Hong Kong…

The Federation of Hong Kong Industries viewed the law as helping to ensure a safe social environment, which was key for the city’s long-term development…

[Also referred to ING]

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