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Hong Kong Has No Plan to Impose Martial Law, Top Adviser Says

Hong Kong Has No Plan to Impose Martial Law, Top Adviser Says

(Bloomberg) -- A top adviser to Hong Kong’s Chief Executive Carrie Lam said the government has no plans to use a colonial-era statute that gives authorities broad powers similar to martial law.

Bernard Chan, the convener of the city’s Executive Council, said in an interview that speculation that Lam could invoke the Emergency Regulations Ordinance has spiraled out of control since she said last week that all options are on the table. Chinese officials said on Tuesday that the law, introduced by the British in 1922 for use in case of emergency or public danger and last used to quell riots in the 1960s, could be implemented if needed.

“The last time ERO’s been used was back in 1967, so by bringing up ERO, it has frightened people,” Chan, who also heads his family’s insurance business, said in an interview at his Hong Kong office. “We don’t have any plan to do this.”

The government will be “very careful,” Chan said, as the law’s use could be interpreted wrongly, given its wide scope.

The law’s provisions include allowing arrests, property seizures, deportation, control of the ports and the power to restrict means of communication. In an extreme scenario, the government could even cut off access to the Internet. It grants government the power to make “any regulations whatsoever which he may consider desirable in the public interest.”

“You have to be very careful because it can be interpreted wrongly. The ERO allows us to do some emergency legislation, but it doesn’t mean we’re going to go cutting down the internet,” he said.

Nor would it be used to shut down capital flows or make property seizures, Chan said, adding that such use would be “so draconian, it’s crazy.” The outcome of that wouldn’t necessarily be better than the “nuclear option” of an intervention involving Chinese authorities, which he also said was undesirable.

Market analysts in Hong Kong view the imposition of martial law as a low-probability event, but they haven’t ruled it out as some anti-government protesters turn increasingly violent.

Chinese officials overseeing Hong Kong sought in a Tuesday briefing to make a clear distinction between violent protesters who have thrown petrol bombs in ongoing battles with police and others who have marched peacefully. They also strongly backed Lam, saying an emergency law could be implemented if necessary and pledging support for the economy.

Lam announced her most significant concession this week since protests began, withdrawing the extradition bill that helped spark the movement in June. Still, demonstrators are now demanding much more, including universal suffrage -- a demand Beijing has explicitly ruled out. Chan said that demand is the toughest since constitutional electoral reform is not for Hong Kong to decide.

On Friday, Fitch Ratings Inc. downgraded Hong Kong as an issuer of long-term, foreign currency debt for the first time since 1995, saying that the territory’s recent political turmoil raises doubts about its governance.

The next few weeks will tell whether Lam -- and her backers in Beijing -- bet correctly that relenting on one key demand would deflate a protest movement that has only gotten more violent. The demonstrations are slated to continue this weekend, with a “stress test” on airport transportation and a gathering at the U.S. consulate.

Even as Lam refused demands for her resignation, local media speculators have suggested Chan could be among the possible candidates to replace her. Before the protests in March, he told RTHK that he would not run and that Lam could win a second term. He reiterated Friday that he never wants a “full-time” government job.

As the protests dragged on, Chan was among Lam’s backers who pleaded for the public to give her a second chance.

Chan, born in Hong Kong, has family roots in southern China and, going back further, in Thailand. The grandson of the late Thai-Chinese founder of Bangkok Bank studied at Pomona College.

His father, Robin Chan, is the Chairman of Asia Financial Holdings Ltd., a Hong Kong-listed provider of insurance products and services with a market capitalization of more than $500 million. Bernard serves as president of the company, in which the family has a controlling stake, company filings show.

After serving as Lam’s campaign manager in the small-circle chief executive election in 2017, Chan was appointed by Lam as the convener among the non-official members of the executive council. He has also been a National People’s Congress deputy since 2008. In December 2018, he was appointed an independent non-executive director of Hong Kong-listed Cathay Pacific Airways Ltd.

To contact the reporters on this story: Blake Schmidt in Hong Kong at bschmidt16@bloomberg.net;Fion Li in Hong Kong at fli59@bloomberg.net

To contact the editors responsible for this story: James Mayger at jmayger@bloomberg.net, Caroline Alexander

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