It is not written anywhere in the signs of the universe or in the alignment of the planets. It may have been seen in numerology although overseen by many. But Hong Kong is feeling the wrath of security laws imposed by China.
US President Donald Trump reacted to China’s questionable security law through the suspension of Hong Kong’s exceptional rights to trade with the United States. Apprehension is now prevalent in economic metropolises.
For years, Hong Kong has been among the freest trade zones in the world. Hong Kong celebrates a laissez-faire economy and benefits from openness. She can recover from just about every crisis. However, China’s questionable new security law may change this status quo and may shrink all areas of the Hong Kong economy.
U.S. President Donald J. Trump signed a sanctions law. From the perspective of the United States, this will end Hong Kong’s exceptional economic position. He said that to any extent further, Hong Kong shall be regarded as Mainland China and shall have the same treatment.
Fear of capital flight
The United States believes that Beijing’s national security laws have undermined the freedom enjoyed by Hong Kong since 1984 when China and the United Kingdom reached an agreement on the return of Hong Kong to China. When the British left Hong Kong in 1997 and made Hong Kong a part of China again, Hong Kong gained a high level of freedom.
Ho-Fung Hung, professor of political economy at Johns Hopkins University, told Deutsche Welle: “I think the national security law is like the extradition law last year, making Hong Kong’s rich people nervous. This applies not only to domestic economic giants but also to elites in the People’s Republic of China and other foreigners because similar laws are often used to prosecute businessmen in trade disputes in China.”
Hong believes that some people will eventually transfer their wealth overseas: “Of course, in the short term we will not see any major capital flight, but in the long run, the security law will improve Hong Kong’s legal and economic environment. or make it worse. ”
Business people are scared
There is a total of 9,000 overseas companies in Hong Kong. 1,300 of these companies are from the United States. Political turmoil caused Hong Kong to fall into recession in 2019. In the past year, foreign direct investment has fallen by nearly half (47%) to $55 billion.
Three-quarters of American companies in Hong Kong worry about security laws. The biggest concern is not sure whether Hong Kong’s judicial independence will be threatened, and whether Hong Kong’s status being an international economic and financial center will be threatened.