HONG KONG: Vague provisions in Hong Kong’s new national security law around state secrets and links to foreign entities have put on edge many global businesses in the financial hub, with some consultants and hedge funds updating contingency plans and seeking legal advice in a bid to counter this political risk.
Several corporations, worried about data security, are now treating Hong Kong, once a major Asian base for multinationals, in the same way as mainland China and shielding information about the rest of the company from teams there, said an executive with decades of experience as an advisor to international firms.
Another executive said his hedge fund was seeking legal advice on how to deal with regulators and other government officials because of the state secrets provisions.
“It boils down to a lack of trust in the Hong Kong government, that is beholden to China,” said a foreign executive who attended a recent meeting with senior Hong Kong officials.
The three executives, like the more than a dozen businesspeople Reuters spoke to, declined to be identified due to the sensitivity around security issues.
On Tuesday (Mar 19), Hong Kong’s legislature unanimously approved the law, which updates a broader national security law imposed by China four years ago and comes with stiffer punishments for crimes including sedition and external interference.
The law takes effect on Saturday, Mar 23. The Hong Kong General Chamber of Commerce, among other business associations, has said it would make Hong Kong “a safer destination for local and foreign businesses and professionals operating there.”
