Implications of Hong Kong's security law

[gzbkel]

The Hong Kong security law has just been passed. What are the implications on the economy in Hong Kong?
 
The following are purely my own guesses:
 
- Potential for large scale demonstrations in future greatly reduced. Isolated incidents involving smaller groups of people gradually taper off and die down.
- The vast majority of people in Hong Kong, including pro-democracy supporters, will find it easier to keep quiet and carry on with life.
- A small minority tries to migrate elsewhere. These include:
  - "Hardcore" pro-democracy activists
  - People who fear that the security law will be interpreted broadly enough to affect the average person.
  - People already unhappy with life in Hong Kong
- Improved safety is good for businesses catering to the mass-market, such as retail, restaurants, suburban malls etc. This helps in post-covid recovery.
- In the mid to long term, mainlanders gradually regain confidence in Hong Kong as a destination for work, sightseeing, and investment. This is good for higher end destination malls and high-end properties for example.
- Hong Kong remains a financial center by virtues of having free movement of capital, at least for the next 10-20 years.
- Slightly less people from the west would want to work in Hong Kong, due to perceived risk of imprisonment if the law is interpreted too broadly. Small number of businesses/jobs relocate elsewhere to places like Taiwan, Singapore.
- Special trade relations with USA may end, and businesses manufacturing in Hong Kong and exporting to USA gets hit.
- Less investments from the West, offset by increased investments from mainland China.
 
Would like to hear the opinions of other VBs. Also, feel free to vote in the poll above.

[mobo]

I think it's a generally positive development for both overseas investors like us as well as the locals living there.

From an overseas capital POV, nobody really cares about political ideology or slogans like democracy and freedom. The key thing has always been political/social stability as well as a strong and transparent legal and financial regime. The new national security law will be significantly positive on the former and neutral on the later, so a net moderate positive.

For local Hong Kongers, the social issues have been well known for decades and the HK government seems unwilling or unable to make any inroads to solve them so far. Although the national security law does not really address such livelihood issues, the signal that the central government is willing to take a more pro-active approach to managing HK affairs is at least is a change. From a bread and butter perspective, the worst it can get is maybe slightly worse off, but the potential for HK to finally begin to take concrete steps and policies to face the issues head on far outweighs the risks.

[specuvestor]

Sounds stricter than expected... maybe riding on the Black Lives Matter wave... already started making arrest... in my view China will not go all out to help HK this time, unlike SARS when HK was the first city to be allowed Group Tour from Mainland.

All four crimes carry maximum sentences of life.
Applies to actions after the law’s implementation.
Covers Hong Kong residents or companies and non-residents anywhere.
Terrorism charges include “serious disruption” of transportation networks.
Collusion provision includes advocates of foreign sanctions.
Subversion includes overthrowing Hong Kong government organs and attacking its offices.
Violators are barred from seeking or holding public office for an unspecified period.
Gives Beijing power to prosecute “complex” cases relating to foreign influence or other “serious circumstances.”
Allows closed trials in cases involving state secrets or other subjects “not fit for open trial.”
Allows justice minister to opt out of jury trials in some cases.
Grants immunity to Chinese agents performing duties in Hong Kong.
Calls for stronger “management” of news agencies and foreign NGOs.

[karlmarx]

Among all Asian cities/countries, HK enjoys the highest level of Western civil liberties, such as freedom of press, speech, and assembly.

Some opinion writers think that HK will no longer be the same, will have a less dynamic economy, or lose its status as an international financial centre, if they lose these freedoms that they have always enjoyed. They are right that HK will no longer be the same. But if HK's economic future is threatened, it will not be because of the national security law.

The residents of HK are surely upset as they not only lose certain parts of their way of life, but also their identity as being superior to mainlanders. Like their predecessors who emigrated during the Joint Sino-British Declaration in 83/84, and then again during the hand over in 97 -- with the property and stock market crashing on both occasions -- it is likely that some HK residents will again emigrate as a result of China's encroachment into their way of life. But like in past instances, these emigrations are not likely a precursor to a shrinking HK economy.

So long as HK continue to remain economically relevant to the world, and Beijing does not interfere in other key institutions (as mentioned by mobo), the national security law should be seen positively for the city's economic development. Such laws are common. Singapore also has an Internal Security Act, which was frequently used decades ago to 'maintain political stability.' There have been, and still are, many criticisms of its oppressive effects. But the victims -- like Beijing is assuring HKers -- are in the minority. By limiting an individual's ability to disent -- and hence forcing them to improve their own quality of life through economic, as opposed to political, participation -- look at how much prosperity SG has delivered since.