National security law: majority of American Chamber of Commerce firms in Hong Kong to remain in city despite concerns over Beijing legislation, survey finds

Most companies under the umbrella of an influential American business group in Hong Kong will remain in the city despite their concerns over a new national security law to be passed by Beijing, according to a poll.

Seventy per cent of the 180 firms surveyed by the American Chamber of Commerce in Hong Kong (AmCham) said they had no plans to move capital, assets or operations outside the city.

But 30 per cent were planning to relocate in some capacity, and were eyeing the United States, London, Singapore and Taipei as potential destinations.

The firms responding to the poll, conducted on June 1-2, represent 15 per cent of Amcham’s members and were mostly American companies, while a third represented businesses from other countries and Hong Kong.

On a personal basis, 62 per cent of the people who responded were not planning to leave Hong Kong, compared with more than 37 per cent who said they were.

Contrasting views on the security law, amid rising tensions between China and the US, featured in quotes from respondents cited anonymously in the survey.

One said: “The tension – from and on both sides – is so high, it does not feel completely safe to be an American in Hong Kong.”

But another said: “Even with [the] national security law, there is nowhere better in Asia.”

Over 63 per cent of respondents were most concerned with ambiguity in the scope and enforcement of the law, and whether the city’s status as an international business centre would be jeopardised.

The poll followed the passing of a resolution by China’s top legislature, the National People’s Congress, to empower its Standing Committee to pass a national security law for Hong Kong.

The law, which could be in place by August, is required to “prevent, stop and punish” threats to national security by outlawing acts and activities of secession, subversion, terrorism and foreign interference in the city’s affairs.

It has prompted widespread concern that it might effectively criminalise all forms of dissent and opposition activity, although the government has offered reassurance that it will only target a small, criminal minority.

The pending law has also led to further Sino-US tensions. US Secretary of State Mike Pompeo responded by announcing that Washington no longer considered Hong Kong autonomous from mainland China.

President Donald Trump has since declared the US would start revoking the city’s special trading privileges, raising the possibility of trade tariffs, more restrictions on technology transfers and policy changes on currency and visas.

About 53 per cent of respondents to the survey were very concerned about the security law, while 30 per cent said they were moderately concerned. Only around 17 per cent they were not concerned at all.

Some 60 per cent thought the law would harm their business operations in Hong Kong, with the remaining 40 per cent holding an opposite view.

“It [the law] will damage the overall business environment of Hong Kong that is used to being free with fair legal, financial and judicial systems,” one member said.

Another said: “It may curtail basic civil liberties and undermine due process and rule of law, leading to greater public strife and mistrust in the current government.”

As the US considers the measures it may adopt on Hong Kong’s trading status, almost 74 per cent of respondents to the poll took a “wait and see” attitude while 18 per cent said they would reduce investments in Hong Kong.

Nearly half of the respondents, about 48 per cent, said they felt pessimistic about the city’s medium to long-term outlook, while about 37 per cent expressed pessimism over its short-term outlook, but said they were confident about its medium to long-term future.

Only 15 per cent remained optimistic about Hong Kong’s medium to long-term future.

“This seems like a signal of greater control to come,” one respondent said. “As Hong Kong quickly turns into just another Chinese city, investors will no longer see Hong Kong as a gateway to China.”

Around 66 per cent said they did not have any contingency business plans for various scenarios while about 34 per cent said they had such plans.

Their contingency plans included opening offshore bank accounts, increasing data security and encryption or removing Hong Kong from future strategic plans for the Asia-Pacific region.