Protesters sing for five demands during street protests on Hennessy Road, Wan Chai, Hong Kong, China on July 1, 2020.
Tommy Walker | NurPhoto | fake pictures
About 370 protesters were arrested in Hong Kong on Wednesday, 10 of them were detained for violating the new security law just a day after it went into effect..
The new law took effect Tuesday night, hours after China’s top decision-making body in parliament passed the controversial legislation.
Police used water cannons to disperse thousands of protesters in Hong Kong who took to the streets. In some cases, the protests turned violent. Seven officers were injured while on duty, police said.
Opponents of the law say it undermines the autonomy of the city that was promised when Hong Kong was handed over from the United Kingdom to China.
British Foreign Minister Dominic Raab said the fact that Beijing may have jurisdiction over complex national security cases is a “blatant attack on freedom of expression and freedom of peaceful protest for the people of Hong Kong.”
Hong Kong, a former British colony, returned to Chinese rule in 1997.
Under the “one country, two systems” policy, the territory has more freedoms than other cities in China, and has a largely separate legal and economic system from the mainland that is attractive to international companies. That framework was supposed to be in force until 2047.
Critics say the new law gives the central government in Beijing radical powers to suppress dissent on Chinese soil, which saw more than a year of protests that sometimes turned violent.
United States Secretary of State Mike Pompeo called the law “draconian” and said it “ends with the freedom of Hong Kong.”
I do not see why Hong Kong as a financial center will be seriously affected by this law.
Lau Siu-kai
Chinese Association of Studies of Hong Kong and Macao
But analysts They say it may be premature to draw conclusions about its impact on Hong Kong.
Whether the new law affects Hong Kong’s attractiveness as a leading financial center will hinge on the implementation of the legislation, said Tim Summers, a senior member of the Chatham House think tank.
“There is a bit there that could be used quite assertively if the authorities so wish. At the same time, we have had several officials in Beijing in the past few months saying that the law will only be used to attack a very small minority of people. “he told CNBC’s” Squawk Box Asia “on Wednesday, before the arrests were announced.
Summers also said that hearings for national security cases would be “quite separate” from normal court proceedings.
“I think trade law, business cases should be able to continue as long as they have in the past. That could continue to strengthen Hong Kong’s position,” he said.
Lau Siu-kai, vice chairman of the Beijing-based think tank, China Association for Hong Kong and Macao Studies, agreed that the city could maintain its position as a financial center.
He said the law “only attacks four major crimes” and is not “comprehensive.”
“In fact, I would say that Hong Kong, as a financial center, needs political stability and it needs law and order,” Lau told CNBC “Street Signs Asia” on Wednesday night.
“I don’t see why Hong Kong as a financial center will be seriously affected by this law,” he said.
Not everyone agrees.
The legislation could have a “chilling effect” on the sentiment of international business, making it more difficult to attract capital and talent abroad, Nick Marro, global trade leader for The Economist’s Intelligence Unit, said in a note the Wednesday.
“This could have consequences for future local investment and job growth, although this could be offset to some extent by companies in mainland China that are increasing their presence in the territory,” he added.
Summers of Chatham House also said that Hong Kong could receive a “boost” from the Chinese charts as a result of the conflict between the United States and China.
“I think there are a number of factors in the mix here,” he said. “It will be difficult to assess how they will develop in the coming months.”
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