In a bid to reduce tension in the market, Hong Kong’s pro-Beijing politicians on Saturday rubbished claims that China’s proposed national security legislation would harm the Asian financial hub’s economy, saying it would instead boost investor sentiment.
The security legislation aims to tackle secession, subversion, terrorism, and foreign interference and could see mainland intelligence agencies set up bases in Hong Kong, raising fears of direct law enforcement.
U.S. government officials have said the legislation would end the Chinese-ruled city’s autonomy and would be bad for both Hong Kong’s and China’s economies. They said it could jeopardize the territory’s special status in U.S. law, which has helped it maintain its position as a global financial centre.
Bankers and headhunters said it could lead to money and talent leaving the city. Hong Kong stocks slumped 5.6% on Friday.
Britain has said it is deeply concerned by the proposed security laws which it said would undermine the “one country, two systems” principle agreed when Hong Kong returned to Chinese rule in 1997.
Upon her return from Beijing late on Friday, Hong Kong leader Carrie Lam said the stock market “goes up and comes down” and it was in fact the large scale pro-democracy protests in 2019 which destabilized the business environment.
“Especially having gone through almost one year of disruptions, violence and uncertainties, anything particularly in safeguarding national security that will help stabilize the environment is indeed very good for local investment sentiment,” she said.
Henry Tang, a member of the Standing Committee of the Chinese People’s Political Consultative Conference, said the legislation was “beneficial” for the business environment as it brings stability and strengthens the rule of law.
Former Hong Kong chief executive Leung Chun-Ying pointed to large U.S. investments in mainland China despite national security laws there.
“Can businessmen tell Hong Kong people, why are there more U.S. companies, U.S. businessmen and U.S. investments in mainland China than Hong Kong?” he wrote in a Facebook post.