Is Business About to Get Harder in Hong Kong?

Proponents dismiss the suggestion that the new national security law China has imposed on Hong Kong might jeopardize its status as an international financial hub. And, indeed, several big banks have already signaled their support for the measure. But the fact is, by undercutting Hong Kong’s role as an international legal center, that’s almost certainly what the law will do.

Before now, Hong Kong had occupied an enviable position in the legal world. Comfortable with the city’s common-law legal system, global companies and financial institutions were willing to adopt Hong Kong’s governing law for contracts, and to submit any disputes to its courts and arbitration bodies. At the same time, its position as “home turf” in the eyes of mainland Chinese companies made Hong Kong an acceptable compromise jurisdiction for deals between international and Chinese parties.