Hong Kong law will help restore confidence, finance chief says

China’s proposed national security legislation will help quell concerns about political unrest in Hong Kong, the main threat to confidence in the city’s financial sector, according to Financial Secretary Paul Chan.

It’s “not national security legislation that may affect investment confidence, but people’s lack of understanding of relevant legislative work” because the Chinese government has said the legislation is only targeted at a small number of people who pose a threat to national security, Chan wrote in a Chinese-language post on his official website.

“The freedom and rights enjoyed by the general public according to law are not interfered with, daily life will not be affected, and property security will continue to be effectively guaranteed,” Chan said. “Social security and political stability are indispensable conditions for international financial centers. The enactment of the national security law can provide guarantees in this regard without affecting the normal flow of people, logistics, information and capital.”

In a separate post, Chief Secretary for Administration Matthew Cheung said on his website that the new legislation does not affect the principle of one country, two systems, in place since the 1997 handover.Hong Kong’s economy, in recession since the second half of last year because of ongoing protests, is bracing for a return to unrest as the city and other parts of the world begin to emerge from the coronavirus pandemic that’s curtailed global commerce this year.

“We must make a clear choice: we must set things right as soon as possible, return to the right track, ensure that people live and work in peace, the business investment environment is stable,” Cheung wrote in the Chinese-language blog. “Social turmoil is the enemy of peace and happiness and investors.”

Imposing Legislation

Local business groups including the American Chamber of Commerce have raised concerns that China’s move to impose the legislation in Hong Kong may jeopardize the city’s position as a key global financial hub, including the threat of the U.S. revoking its special trading status.

In a statement Friday, the chamber called for clarification on the “vaguely defined” law proposed by the Chinese government.

“As for the concerns expressed by some foreign chambers of commerce on the relevant legislation, it was mentioned that the various advantages that Hong Kong has relied on in the past, including freedom of information, freedom of speech, transparency of the government, and integrity, can be maintained,” Chan said. “The central government also emphasized that it will continue to protect the legitimate interests of various countries in Hong Kong according to law, and protect the legitimate interests of foreign investors in Hong Kong.”

Normal foreign investment and trade activities in Hong Kong can continue because they do not endanger national security, Chan said.