National security law’s grey lines blur Hong Kong’s future as a global financial centre

The vagueness of the new legislation, statements by government officials and the actions of the police do not inspire confidence that the law will be narrowly applied
If Hong Kong is to be more than China’s offshore financial market, it must retain its free press, independent judiciary and honest civil service

Mark Clifford

Published: 1:00am, 15 Jul 2020

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“Everyone knows where the red lines are now,” a senior member of Chief Executive Carrie Lam Cheng Yuet-ngor’s administration said at a closed-door meeting which I attended. That was right after Financial Times journalist Victor Mallett had been kicked out of Hong Kong following a Foreign Correspondents’ Club event he moderated featuring Hong Kong National Party founder Andy Chan Ho-tin. This was late 2018 and the official had an air of smug satisfaction as he celebrated a job well done.

Today the red lines are gone.

Since July 1, we have fuzzy grey lines from a broadly drawn national security law. The new law has not brought peace but heightened anxiety.

If an increasingly uncertain legal system disqualifies Hong Kong from the ranks of world-class financial centres, what does that mean for our city?

05:50

What you should know about China's new national security law for Hong Kong

The answer is not promising. An American Chamber of Commerce survey released on Monday underscored this uncertainty. More than three-quarters of companies said they were concerned about the new legislation, with 41 per cent saying they were “extremely concerned”.

What are AmCham members worried about? At the top of the list is ambiguity in the scope and enforcement of the law. Close behind is worry over the independence of the judicial system.

The government and pro-Beijing voices initially assured the public that the law was designed to be narrowly applied, to a few troublemakers. But comments since then have suggested that it will be used as a sort of catch-all offence, just as it is in mainland China.

Secretary for Constitutional and Mainland Affairs Erick Tsang Kwok-wai gave the game away with his suggestion that the primary organised by pro-democrats this past weekend could violate the national security law. Tsang’s comments would be laughable if the offence were not so serious.

Stripped down, Tsang essentially said that successful opposition to government policy would be tantamount to violating the national security law. Somehow, the over 600,000 people who voted in the primary didn’t get the message.

People queue up to vote at a polling station outside Tai Po Plaza on the second day of the Legislative Council election primary organised by the pan-democratic camp on July 12. Photo: Felix Wong

Or what about arresting people for holding blank pieces of paper? Absurd and Kafkaesque as this sounds, last week during a protest at a mall in which people held up blank papers, police arrested eight people after displaying a sign warning that the gathering might violate the national security law.

Grabbing people with blank sheets of paper is more likely to make Hong Kong a global laughingstock than to uphold national security.

China’s Communist Party doesn’t, of course, want red lines. The party thrives on ambiguity. The law is whatever the party says it is at any given moment – a party that, fittingly, remains an underground organisation in the very territory it rules.

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It would be nice to imagine that Hong Kong’s courts would clarify matters, so that people know what is legal and what is not. Executive Council member Ronny Tong Ka-wah spoke forcefully on BBC’s HARDtalk earlier this month about the integrity of Hong Kong courts.

Let us hope that he is correct and that the courts apply the new law in a way that respects Hong Kong’s heritage of civil liberties. With the new Office for Safeguarding National Security and other Beijing intrusions in Hong Kong affairs, asking Hong Kong’s courts to stand up against China is a tall order.

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Beijing is not setting out deliberately to wreck Hong Kong. Beijing would like Hong Kong to succeed, but on Beijing’s terms. Looking at the record of its new appointees to run key institutions, like heavyweight hardliner Xia Baolong as head of the Hong Kong and Macau Affairs Office, suggests a tough, uncompromising approach.

Hong Kong risks an accretion of damage to its international standing from people in a party who don’t understand that institutions of free press, a strong and uncorrupt civil service, and an independent judiciary system are fragile objects. These are hard to build and easy to destroy.

It may be impossible for an international financial centre to thrive with grey lines rather than a clear application of law. Hong Kong is in danger of seeing its traditional role as a portal between China and the rest of the world destroyed. For better or worse, Hong Kong increasingly will be China’s offshore financial market rather than a truly international centre.

People stand in front of an electronic board showing Hang Seng Index outside a bank in Central on July 6. Renewed attention to the Greater Bay Area and hot money following into Hong Kong indicate Beijing wants Hong Kong to be a success – on China’s terms. Photo: Sam Tsang

The renewed attention given to the Greater Bay Area, and the ample liquidity flows into the territory pushing the Hong Kong dollar to the strong end of its band, testify to Beijing’s continued interest in making Hong Kong a success in its own terms. Don’t write Hong Kong off. But let’s not pretend that the rules are the same – or that we even know the rules. That is how Beijing likes it.

The issue is not China’s insistence on a national security law for Hong Kong. The issue is how the law is applied. Most places have some form of national security laws. They are used to protect against serious national threats.

For years we have been hearing about vague and ill-defined foreign interests that supposedly want to use Hong Kong for their own nefarious purposes.

The heart of the matter – long before former chief executive Leung Chun-ying’s handling of the Occupy protests laid the seeds of an independence movement – is that Hongkongers wanted the freedom to elect the chief executive and Legislative Council members in free, open and representative elections.

It is telling that Beijing appears to be willing to risk Hong Kong’s role as an international financial centre – and, indeed, perhaps its own national security – rather than keep the modest promise it made to allow free elections.

Mark L. Clifford is executive director of the Asia Business Council

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