Wait-and-see approach by foreign business bodies

Local groups say they do not expect law to affect normal transactions

Foreign business bodies in Hong Kong have said they are taking a wait-and-see approach to the newly passed domestic national security law, with the German chamber saying the best reassurance would be from not having any prosecutions in the sector.

Local business groups, meanwhile, said they believed the legislation would not affect normal transactions, with one hoping the government could offer preferential policies to attract business, as they feared possible sanctions from the United States might affect market sentiment.

Beijing and local authorities have consistently sought to reassure the sector that the law will not disrupt the normal operations of foreign enterprises, but aims to create a secure business environment.

Johannes Hack, president of the city’s German Chamber of Commerce, yesterday said many foreign enterprises already felt safe and legally protected in Hong Kong, and that assurance would come from how the legislation was used. “If there are no prosecutions, actual or pondered, involving businesses’ exchanges with their various stakeholders, that will provide reassurance,” Hack said, adding that “the proof of the pudding is in the eating”.

He said that if there were any prosecutions, businesses and chambers would review them to see how applicable they were to their own dealings.

Tony Ho, director of the Indonesia Chamber of Commerce, said: “At this moment we don’t see any effect on the Indonesian business community for the national security law or Article 23 law.”

Basil Hwang, vice-chairman of the Singapore Chamber of Commerce in Hong Kong, said it was in the interest of the city and the mainland not only to preserve and keep the existing international business community but to attract more overseas participation in Hong Kong.

“I believe that the new laws whilst helpful in their deterrent effect will be enforced lightly and judiciously, and should not adversely impact foreign enterprises in Hong Kong,” he said.

The British, European, and Australian Chambers of Commerce declined to comment.

Irons Sze Wing-wai, the honorary president of the Chinese Manufacturers’ Association, admitted that a single factor was insufficient for improving the local business environment, but having the legislation was better than having none.

“I don’t think business organisations will go through the coming law provision by provision. At the end of the day, it all comes to whether or not you have the intent to endanger national security. We all know that,” he said.

Welcoming the law’s passage, the Hong Kong Association of Banks said it would allow the city to focus on economic and developmental priorities, paving the way for stability and prosperity.

Sun Hung Kai Properties, Hong Kong’s largest property developer by market capitalisation, said the law laid a solid foundation for various sectors to unite, work together and strive for economic growth, development and improving people’s livelihoods.

Its comments came a day after brothers Peter Lee Ka-kit and Martin Lee Ka-shing, chairmen and managing directors of Henderson Land Group, said investors and enterprises would enjoy a safer and more stable business environment with the “solid legal barricade” built by the new law.

But a local business insider who preferred not to be named said foreign investors were “really concerned” about the legislation and its possible implications.

“So they have chosen to stay put for making any business decisions concerning Hong Kong and wait a bit until everything is clearer,” he said.

He also said the local business sector had been “mentally prepared” for another round of sanctions from foreign countries, and had started looking for new customers in Southeast Asia and the Middle East. “But it is always hard to open a new market. Plus, the new customers are not as rich as our previous ones in the old markets like the US,” he added.

The insider suggested that the central government should now think of crafting preferential policies for Hong Kong to attract foreign capital, as concerns would persist for a period of time.

The law spans 39 offences divided into five categories: treason; insurrection, incitement to mutiny and disaffection, and acts with seditious intention; sabotage; external interference; and theft of state secrets and espionage. Authorities have repeatedly stressed that “normal business operations” would be “fully protected” by the law after some chambers of commerce had voiced concerns about the terms “external forces” and “state secrets”.

Chief Executive John Lee Ka-chiu said the legislation’s passage allowed the city to “focus on developing the economy”, while the Hong Kong and Macau Affairs Office said the ordinance “further enhanced” the city’s rule of law and social stability.

If there are no prosecutions, actual or pondered … that will provide reassurance JOHANNES HACK, GERMAN CHAMBER