Asia’s global financial hub, top of the rankings for IPOs for much of the past decade, woke up on July 1 with a new national security law that gives China broad powers to clampdown on political opponents and critics.
It is a truism that thriving financial markets need good information. Free flow of information allows both bad news and good to be weighed by the marketplace. Censorship breeds rumor and misinformation. Can Hong Kong prove this truism wrong?
The world will find out. Asia’s global financial hub, top of the rankings for IPOs for much of the past decade, woke up on July 1 with a new national security law that gives China broad powers to clampdown on political opponents and critics. China’s soothing promises about a “high degree of autonomy” and “Hong Kong people ruling Hong Kong” that were made to put people at ease ahead of the 1997 Chinese takeover ring hollow now that we can finally see the full text of the new law. This was a national security bill that was rushed through in such secrecy that even Hong Kong’s leader hadn’t seen the law until after China’s legislature had approved it, gazetted at 11 p.m. on June 30, an hour before the 23rd anniversary of the handover.
Maybe Hong Kong can prove doubters wrong. In an article written shortly before Beijing said that it would impose the sweeping security law on Hong Kong, Washington University Professor David Meyer, an expert on international financial centers, argued that Hong Kong’s status as Asia’s leading financial center is safe because the territory has scale and sophistication, enjoys Beijing’s support, and that there is no obvious alternative.
