U.K. Points to Political Risk in New Hong Kong Business Guidance
The Hong Kong Club Building, from left, Three Garden Road building, Cheung Kong Center, Bank of China Building, Court of Final Appeal building, HSBC Holding Plc headquarters building and the Standard Chartered Bank building in Hong Kong, China. (Photographer: Billy H.C. Kwok/Bloomberg)

U.K. Points to Political Risk in New Hong Kong Business Guidance

The U.K. highlighted increasing political risks in its latest guidance on conducting business in Hong Kong, pointedly dropping references to relations with its former colony as “positive” and “beneficial.”

The U.K. government updated its guidance Tuesday for the business risk level in Hong Kong to include a warning that a China-drafted national security law imposed last year was “already reducing the extent to which the people of Hong Kong are able to exercise their fundamental rights and freedoms.” The guidance also lays out recent political changes in Hong Kong, citing “increasing concerns” about freedom of speech and the risk of police action against perceived national security threats.

An earlier version of the online guidance page had said the U.K. “enjoys a positive, forward-looking relationship with the Hong Kong SAR government and mutually beneficial cooperation in a wide range of areas.” That statement was dropped from the latest text.

“There is anecdotal evidence of companies being put under pressure by the Chinese authorities for the political beliefs of their employees, including those who have taken part in pro-democracy protests,” the new guidance said. “Companies perceived to be pro-China have also been targeted, with a number of businesses suffering vandalism during the protests over extradition.”

The update didn’t elaborate as to how political changes could impact the city’s economic and business prospects moving forward. The change was reported earlier by the Citizen News website.

The British consulate in Hong Kong couldn’t immediately be reached for comment Wednesday.

U.K. Pathway

The new guidance comes as the U.K. opens up a pathway for holders of British National (Overseas) passports to gain long-term visas -- the first step toward citizenship. The U.K. announced the move after Beijing imposed the security law last year, a move London called a “clear and serious breach” of the 1984 Sino-British treaty that specified China would give Hong Kong a “high degree of autonomy” until 2047 under a principle of “one country, two systems.”

China has said the security law was necessary to prevent additional violent protests in Hong Kong after months of pro-democracy demonstrations rocked the Asian financial hub in 2019. Almost 100 people have been arrested under the law so far. The U.K. has also suspended its extradition treaty with Hong Kong and extended its China arms embargo to include the city.

Still, the U.K. said historic ties and affinities with Hong Kong “endure.”

“Hong Kong continues to be a major business partner for the U.K.,” it said. “It is important as a very significant market in its own right and also as the principal gateway into, and increasingly, out of mainland China.”

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