Hong Kong strives to become a key player in the world of digital currencies, specifically focusing on developing a stablecoin center. The financial powerhouse, Harvest Global, is currently in discussions regarding the city's upcoming stablecoin pilot projects.
In a recent announcement, Hong Kong has released details about its long-awaited domestic security legislation. The new law includes a broad interpretation of state secrets and introduces measures to protect against foreign interference.
In a press conference, Hong Kong's Chief Executive, John Lee, who has been instrumental in the city's tightening grip on opposition, emphasized the constitutional responsibility to pass this law. The public can submit their opinions on the 110-page document, which is available on the government's website, until the end of February.
Stressing the importance of these measures, Lee highlighted the volatile geopolitical climate and potential threats that necessitate a robust approach to maintaining national security. "We've been waiting 26 years," he said, "the time to act is now."
The obligation for Hong Kong to establish its national security laws stems from Article 23 of the Basic Law, the city's constitutional document, since its handover to Chinese sovereignty in 1997. Past government administrations have been unable to fulfill this duty due to significant public dissent, with the most memorable protest occurring in 2003.
However, the landscape changed drastically after Beijing implemented a national security law in 2020, leaving little room for public pushback.
1: Introducing the ‘Safeguarding National Security Ordinance
The Hong Kong government, led by Chief Executive John Lee, has unveiled a new proposal known as the 'Safeguarding National Security Ordinance.' This extensive document, split into nine chapters, outlines offenses that could compromise Hong Kong's national security. These offenses encompass a range of activities, from treason and sedition to theft of state secrets, acts that threaten security via digital means, and foreign interference.
2: The Government's Dual Narrative and Global Implications
Ryan Neelam from the Lowy Institute commented on the recent actions of the Hong Kong government. He observed a contradiction where the government aims to present Hong Kong as an international, open city while concurrently tightening control with new legal measures. These actions include offering substantial rewards for the capture of democracy activists abroad, drawing attention and likely criticism from the global community. This controversial stance follows the implementation of a China-drafted national security law, which led to significant international backlash, including sanctions from the United States against various Hong Kong officials.
3: Expanded Definition of State Secrets Affects Business Compliance
The new proposal under Article 23 intends to broaden the definition of what constitutes a state secret, imposing additional obligations on businesses within Hong Kong. Beyond the current scope of security and intelligence, the term is proposed to cover information on economic and social development, significant policy decisions, and scientific and technological advancements. This expansion of the term "state secret" indicates that the government finds the existing definition insufficient.
4: Tackling 'External Interference' and Citing Global Precedents
In an effort to reinforce national sovereignty, the proposal recommends establishing an offense targeting 'external interference.' This move is aligned with similar statutes found in countries like the UK and Canada, which the Hong Kong government refers to as benchmarks for its own regulations.
5: Chief Executive Warns of Potential Instability
Hong Kong's Chief Executive, in a recent statement, expressed concern about the presence of foreign agents and proponents of Hong Kong independence within the city. He pointed out the possibility of escalating unrest and characterized the 2019 pro-democracy protests as a "color revolution".
6: New Offenses Mirror Mainland China's Rules
Patrick Poon, a human rights researcher at the University of Tokyo, highlighted that the proposed adjustments to Hong Kong's legal framework, including new offenses related to state secrets and foreign interference, align closely with those found in mainland China. According to Poon, these changes mark a shift, transforming Hong Kong to mirror other mainland cities.
7: Tightened Grip and its Consequences
Over recent years, under President Xi Jinping's directives, control over Hong Kong has tightened, as evidenced by stringent pandemic restrictions and actions taken against media critical of the Communist Party. The impact has led to an outflow of both foreign and local residents and has tarnished the city's reputation as a thriving business hub.
8: Article 23's Public Consultation Period
The proposed Article 23 will have a one-month public consultation window, coinciding with the Lunar New Year, a period when many residents typically travel out of the city. This duration is notably shorter compared to the three-month period provided in 2002, raising questions about the adequacy of time for public discourse.
9: Government’s Strategy to Counter Legislation Criticism
The government announced plans to form a group dedicated to addressing critiques of the new legislation. Additionally, the Chief Executive has promised outreach efforts to foreign consulates and business chambers, emphasizing that the new measures will foster stability and benefit the business environment.
10: Persistent Economic Struggles
Despite the easing of pandemic-related restrictions, Hong Kong's economy is lagging in its rebound. The local stock market reflects this struggle, with the Hang Seng Index witnessing a sharp 2% decline on Tuesday, an indication that the city is continuing to wrestle with financial recovery.
11: Chief Executive’s Take on Market Turbulence
In response to concerns over the stock market downturn, Hong Kong's Chief Executive underscored the necessity of a secure and stable environment for economic prosperity. He believes that the proposed legislation under Article 23 will create a conducive business atmosphere, ensuring safety and stability for all economic activities in Hong Kong. According to Lee, the volatility of the stock market is influenced by a multitude of factors.
12: Article 23 and the Business Environment
The Chief Executive remains optimistic that the introduction of Article 23 will bolster Hong Kong's position as a safe and stable hub for business. Lee is confident that the legislation will alleviate concerns and invite more secure economic practices, ultimately playing a central role in the revival of the city’s economic ecosystem.