Hong Kong security law: wealthy Chinese fret about city’s status as safe haven for investment

Wealthy mainlanders have long invested in Hong Kong, taking advantage of the city’s unique privileges within China to buy real estate, shares and insurance

But Beijing’s plan to impose a national security law on Hong Kong has left some fretting about the future of the financial hub and their investments there

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China’s plan to impose a national security law on Hong Kong has left some investors from the mainland concerned. Photo: Sun Yeung

Published: 6:15am, 10 Jun 2020Updated: 11:20pm, 10 Jun 2020

Wealthy investors from mainland China are watching developments in Hong Kong with growing concern, as tensions between Beijing and Washington over a new national security law raise questions about the future of the city.

While anti-government protests have hurt Hong Kong’s reputation in recent years, well-off mainlanders are still attracted to the city’s unique privileges within China, including unrestricted capital flows, an uncensored internet and rule of law upheld by an independent judiciary. The freedoms have allowed them to park money in the city and access the outside world.

But China’s decision to move ahead with a national security law, which has raised the threat of sanctions from Washington, has some mainland investors unsure about the city’s fate as a commercial hub – and how this may affect their assets.

“I am very worried about developments in Hong Kong because I work for a Hong Kong-funded enterprise in Shenzhen and the company pays my income in Hong Kong dollars,” said Sam Tao, a senior sales manager in Shenzhen, which sits just across the border from Hong Kong.

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“I think the current conflict between China and the US is a head-on collision that cannot be resolved in the short-term. Hong Kong is sitting at the centre of the vortex and so are capital and investments in the city.”

China enforces strict capital controls on mainland residents, banning direct investment in overseas stocks, financial products or property.