China Passes Hong Kong National Security Law to Crush Threats
Hong Kong is a global banking center home to several multinational companies. It seen by the business community as a gateway to China was so much at stake. We're taking a closer look at the impact of China's new security on the region Wall Street. Journal markets. Columnist Mike. Byrd is based in Hong Kong. He joins US NOW MIKE WELCOME! Thanks very much for having me. Mike you're on the ground in Hong. Kong you are very much in touch with the business community. Put this in perspective for us. Just how big of a deal is this? The first thing to say is that we don't have a lot of detail on what is going in this low. We know that it will have rules on secessionist Atta. Choose to subversion of the Chinese state and to some vague implications. Abou- coming under foreign influence, but we don't know the straight detail of it. The actual text of the law has yet to be published, so it's difficult for businesses to make a firm idea of of what this is going to mean for them for the moment. Moment is a lot of confusion, and it's also extremely sensitive topic, because not knowing what's in that bill means that you don't know what will be illegal to save from tomorrow. What you may encounter legal difficulties from saying a lot of international businesses staying relatively quiet about that even now organizations like the American Chamber of Commerce relatively quiet organizations that have to be fat up until now been fairly critical of the idea of the national security, though a now being very cautious about what they say. Mike as you know as we've reported a top executive from banking, giant HSBC signed a petition supporting the legislation, saying it supports any law to stabilize social order in Hong, Kong and economic prosperity and development to have that backing from HSBC. How significant is that? I think hate be. Situation has turned out to be as a bit of a microcosm for war. The problem is for businesses more broadly in Hong Kong, which is a SPEC- signed up to the idea. The national security though they had an executive sign up to that was referred to in Chinese media in state media as sort of too little too late that that support was slow that it wasn't absolute that it wasn't clear from the beginning now. Hong Kong HSBC was obviously criticize full completely the opposite for signing the bill astle is very difficult to find this sort of middle ground position that businesses like hate pc, especially those with sort of one foot in the West and one foot in China. They've done really well in the past couple of decades in Montaigne and jewel role. It's now increasingly difficult to. To do the HAGIA species come under fire from both sides for doing it. It's likely to continue doing so, and that's going to be the case for other large Hong Kong. Business as you go companies like Johnny Matheson, which are really West and run by of had a big influence in Asia for longtime. They're gonNA find it increasingly difficult to straddle both sides. I WANNA. Point out at the time HSBC said it supported laws that will enable Hongkong to rebuild its economy and maintain the principle of one country, two systems, any indication from any companies, especially those that are based in the West that they will curb their presence or scale back their presence or future business deals in Hong Kong. You've seen some smaller organizations to that. In the couple of research firms here, but people mostly stray away from saying for a couple of reasons, one thing is if you have to do business in mainland China saying that you leaving Hong. Kong because of a load of the government of mainland China wants to pass is a bad look. It's not GonNa win you any friends in the mainland. The second reason is purely cost related. It's expensive to move people and if If it becomes the case that it won't disrupt Your Business Operations you've moved people. You probably lost employees in the process. You probably lost deals in the process for no reason. as a reporter is sold. Is Covering London during twenty sixteen businesses talked a lot about leaving because of brexit talks about the risks. Relatively few of them did precisely because it's so expensive to do so disruptive if there are any circumstances in which you can stay, you probably will. And Mike as a journalist who lives in Hong Kong who is very familiar with the business community. What are the lingering questions you have? What are the unknowns that need to be answered to get scope about the significance and impact of this decision. I think the honest answer is that we won't know enough about the little to know how Lafayette businesses until it begins being enforced you have lose like this in mainland China and it's the selectiveness of their enforcement. That really matters whether it's used as the Hong Kong. Government is broadly suggesting the Hong Kong. Government. He's very keen to stress that this won't affect most people that it shouldn't affect national businesses. Many businesses may not in a cynical way mind this of law, if it really just applies to political dissidents, if it's just used to crackdown police political dissidents, and that will be the same as many businesses finding mainland China, many businesses find. Find even in places like Singapore they can live without sort of thing, but the strict text of the bill may prove to provide situations for the Hong Kong government to pursue international businesses if they wanted to. So I think we'll have to see where we are in a few months time once the lawyers and who's being caught up in it. Who's being warned about legally? WHO's actually going to call? He's being prosecuted for until that happens is going to be really difficult to say the soda scope of the Law until it actually begins to fullest. Mike Byrd joining us from Hong Kong great to have you on the podcast. Thanks very much.