Beijing wants to impose anti-sanctions law on Hong Kong even though foreign firms might leave

The Standing Committee of China’s National People’s Congress will discuss the measure next week. Hong Kong authorities would prefer not to have it imposed like the national security law. Local banks could be caught between Western sanctions and Chinese countersanctions. Singapore and Tokyo might benefit. For pro-Beijing groups, the law is a deterrent.

Hong Kong (AsiaNews) – China is ready to impose its "anti-sanctions" law on Hong Kong, raising concerns among local and foreign companies.

Approved on 10 June by the Standing Committee of the National People’s Congress (NPC), the law is a response to the punitive measures imposed on China by the United States and its allies.

It allows Chinese companies and entities to go before Chinese courts for protection from foreign sanctions.

With this law, the Chinese government could also take action against companies and foreign investors present in China that align themselves with the bans introduced by Western governments.

Beijing's reprisals can include visa denial, expulsion from the country, and seizure of assets.

The passage of the law accelerated after the United States, Europe, Canada and Great Britain imposed economic and financial restrictions on Chinese officials, entities and state bodies involved in the repression of Uyghurs and other Muslim minorities in Xinjiang.

Beijing is also taking aim at Western sanctions over its Hong Kong policies.

According to Chinese state media, the PNC Standing Committee will meet next week to determine how to extend the anti-sanctions law to Hong Kong (and Macau).

Hong Kong Chief Executive Carrie Lam confirmed the adoption of the new legislation. However, she indicated that she would rather see the anti-sanction law incorporated into Hong Kong’s Basic Law through local legislation.

China’s central authorities could in fact decide to impose it directly like they did in June 2020 with the national security law designed to crush the city’s pro-democracy movement.

As reported by RTHK, Hong Kong’s public broadcaster, many companies in the former British colony would like to see the law adopted through the local legislature, so that they can express their opinion on the matter before its approval.

The biggest problem is for local banks, which could become victims of Western sanctions and Chinese countersanctions, undermining their role as financial intermediaries between the West and China.

Pro-Beijing officials in Hong Kong argue that the new law will not make foreign investors flee the city (to Singapore or Tokyo for example). Instead, it will serve as a deterrent, forcing foreign governments to think twice before sanctioning Chinese officials and entities.