New Hong Kong Watch report exposes widespread business fears about the Extradition Law

A new report, published by Hong Kong Watch today, uncovers the widespread fears of business leaders, lawyers and pro-democracy leaders about the proposed amendments to Hong Kong’s extradition legislation. 

In preparation for the report, A Broken Firewall: The Extradition Law and the Rule of Law in Hong Kong, Hong Kong Watch conducted a series of interviews behind closed doors with business leaders, lawyers, and pro-democracy leaders. While the concerns of pro-democracy leaders and lawyers have been well documented, the report reveals that business dissatisfaction with the proposed legislation is deeper than the business community have publicly stated.

CLICK HERE TO READ THE REPORT

Interviews with business leaders

Hong Kong Watch conducted a series of private, confidential interviews on the condition of anonymity with senior executives, hedge fund managers and financial analysts.

One senior executive at a leading international bank in Hong Kong said: “Both the Chinese and the British governments established a requirement that there is a firewall between the two legal systems. There was a rationale to having the firewall. Introducing a case-by-case extradition mechanisms is like opening a pandora’s box.”

Another senior executive at another international bank said: “The extradition bill could fundamentally derail the integrity of ‘one-country, two-systems.”

For one hedge-fund manager, the problem was “bookseller’s syndrome”: “You start impacting the average person’s freedoms here, and it would be the end of the place… spiriting people away over the border would undermine business confidence.”

For one Managing Director at another international bank, the key problem is the opacity of the Chinese legal system: “People in Hong Kong are quite pragmatic. Good governance has ensured that we have not had to care too much about politics. However, business people are very worried about the extradition law. In China, the legal system is a bit opaque, the heads of businesses have been imprisoned.”

A second hedge-fund manager said that the amendments would mean he no longer feels safe to honestly forecast Hong Kong’s finances, as he worries it could be construed to be contrary to Chinese national interests: “If the extradition law is in effect, I cannot be neutral or objective in my financial analysis, I will have to praise the motherland.”

Implications of business dissatisfaction

The report notes that these insights have multiple implications. One senior executive at an international bank said: “This law will have long-term repercussions in Hong Kong. It will cast doubt on business confidence, influencing long-term planning about regional domicile… Many organisations are formulating their own risk diversification strategies, they can see the structural political risks.”

Hong Kong Watch conclude by saying: “The proposed amendments could cause significant damage to Hong Kong’s international reputation. It has the potential to break down the firewall between the mainland and Hong Kong, undermining the city’s rule of law and autonomy, perpetuating booksellers’ syndrome among businessmen, and weakening business confidence in the city as an international financial hub.”

“‘One-country, two systems’ is a very successful brand for Hong Kong. It allows the city to be ‘Asia’s World City’, with all the privileges that entails. But the brand requires the endorsement of the international community.”

The report makes the following recommendations:

TO THE GOVERNMENT OF HONG KONG:

• Immediately abandon the amendments to the legislation;

TO INTERNATIONAL PARLIAMENTARIANS:

•  Issue statements explaining your concerns about the extradition law, and write to your governments urging them to make representations to the Hong Kong government;

TO INTERNATIONAL GOVERNMENTS:

• Publicly and privately register your concerns with the government of Hong Kong, calling for longer public consultation and the legislation to be dropped if it does not provide enough safeguards;

• Work with business leaders to raise public awareness about the full implications of the changes to legislation for Hong Kong’s status as an international financial hub;

TO BUSINESS LEADERS:

• Raise your concerns in public and private with the Hong Kong government, the media, and international governments;