The Chinese Communist Party has approved the “national security law” in Hong Kong, putting an end to the so-called “one country, two systems” stipulated in the Sino–British Joint Declaration.
The former British colony was allowed to maintain its own rule of law, but its democracy has been eradicated by the CCP.
Hong Kong pro-democracy activists in danger
As soon as the national security law was passed, a “most-wanted” list of pro-democracy activists in Hong Kong has gone viral on the Chinese social media. Jimmy Lai, the owner of Apple Daily, has been labeled as a “terrorist” among other litigations under his name.
China’s parliament has backed security legislation for Hong Kong which would make it a crime to undermine Beijing’s authority in the territory
The decision adopted by China’s national legislature Thursday on the national security legislation for the Hong Kong Special Administrative Region (HKSAR) fully embodies the aspirations of deputies to the National People’s Congress (NPC), a spokesperson of the Legislative Affairs Commission of the NPC Standing Committee said Thursday.
The decision also reflects the common will and fundamental interests of the Chinese people of all ethnic groups, including Hong Kong compatriots, spokesperson Zang Tiewei said.
“The decision is of significant importance for upholding and improving the ‘one country, two systems’ institutional system, safeguarding national sovereignty, security and development interests, maintaining Hong Kong’s long-term prosperity and stability as well as protecting the legitimate rights and interests of Hong Kong compatriots,” Zang said.
Hong Kong opens the “gates to hell” for the CCP
Hong Kong people have been providing much needed international business and trade opportunities to mainland China as well as humanitarian aid and support. As the Chinese Communist regime has shown no intention to loosen its grip on the Chinse people, the Hongkongers put themselves forward to defy tyranny.
The months-long protests in Hong Kong let the world see the CCP’s crime against humanity. When the CCP unleashed the virus at the end of last year, the righteous people in the world finally realized that everyone in the world has become victims of the CCP just like the Hongkongers and the Chinese mainlanders.
The only way to maintain world peace is to get rid of the CCP, the maker of the CCP-virus.
The revocation of Hong Kong’s special trade status with the US, combined with sanctions and asset freeze, will put pressure on the Hong Kong dollar and its stock market, which are artificially maintained by the CCP. The US-CCP decoupling is part of an ongoing economic war against the CCP, which relies heavily on Western capitals and trades.
The CCP kills the goose that lays the golden eggs
The US Congress passed a bill in 1992 to grant Hong Kong special trade zone treatment. These measures mainly include the exemption of visas, the fixed exchange rate of the US dollar and Hong Kong dollar under the framework of the linked exchange rate, various corporate protection laws, preferential tax systems, and judicial protection.
Many other countries have also given similar preferential measures to Hong Kong. These measures have allowed Hong Kong to continually maintain its status as an international financial hub after 1997 and become the fourth largest international financial center after London and New York. And Hong Kong’s advantage in international trade has also played a vital role as a bridge for China’s economic take-off.
Robert Spalding, an expert on Sino-US relations at the Houston Institute of America, told Bloomberg that if the Trump administration really takes tough measures to cancel Hong Kong’s special trade status, then China ’s financial relations with free economies will be affected, and stocks, bonds, and financial transactions will suffer.
The cancellation of the special trade status for Hong Kong will negatively impact the Chinese economy. Many Chinese enterprises are using Hong Kong for foreign capital injections and tradings with international financial institutions.
Chinese dissident Miles Guo said that the CCP has been “stealing” an unlimited amount of US dollars via the HK dollar to USD pegging. The CCP has been overprinting HK dollars and secretly taking USD from the Hong Kong Monetary Authority (HKMA)’s dollar reserve as well.
Hong Kong’s dollar has been pegged to the US dollar since 1983, and the HKMA is currently required to keep the currency trading within 7.75 and 7.85 to the US dollar. If it hits either end of the scale, the authority is obliged to step in to buy or sell the currency to ensure it stays within its target band, and the HKMA is required to maintain enough amount of US dollar reserve.
Captial fleeing Hong Kong
According to a Reuter’s report, the ultra-rich have been transferring their assets out of Hong Kong to avoid confiscation or nationalization by the CCP.
Bankers and other sources in the wealth management industry said that out of concerns about Beijing’s proposed implementation of the National Security Law in Hong Kong, the number of Chinese wealthy people who choose to deposit assets in Hong Kong is expected to decrease because they are worried that Hong Kong may allow mainland Chinese authorities to track and confiscate their wealth.
Some bankers said that more than half of Hong Kong’s estimated $1 trillion worth of wealth was deposited in Hong Kong by individuals from mainland China. Hong Kong is close to mainland China, the judicial system is different from mainland China, and the Hong Kong dollar is pegged to the US dollar. All these are the reasons why wealthy people in mainland China choose Hong Kong. But now people are worried that due to capital and talent drain, Hong Kong is losing its advantage as a global financial center.
The Reuters’ interviews with half a dozen bankers and corporate headhunters showed that some wealthy Chinese customers are seeking other places to deposit their wealth. Among them, Singapore, Switzerland, and London are their priority. A Chinese rich man had planned to invest in Hong Kong, but recently changed his mind and went to Singapore. The consultant for this rich man works for a wealth management banking institution in Europe. The consultant said that his bank had already begun to receive inquiries from Chinese wealthy individuals to open accounts outside Hong Kong.
Multiple sources told the Reuters that the development of this situation prompted some financial companies to seek recruitment agencies to help hire Chinese-speaking client consultants in places like Singapore and Switzerland.
According to a report published by Credit Suisse, from a global perspective, as of mid-2019, Hong Kong’s adult per capita wealth is second only to Switzerland, and the number of individuals with assets of more than US $50 million ranks tenth in the world.