More clarity needed on Hong Kong’s Article 23 domestic security law to reassure investors of financial hub status, government adviser says

“This is beneficial for the flow of information, as Hong Kong is an international financial hub and we are dependent on the flow of information and transparency to strengthen our position.”

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The UK’s Foreign, Commonwealth and Development Office said it was monitoring the issue closely as freedoms in Hong Kong had been “significantly eroded under the guise of national security”.

“It is important that new legislation aligns with international standards and upholds the rights promised to the people of Hong Kong,” the office said.

A spokesman from the European Union said it was following the legislative process closely and had repeatedly made clear its grave concerns about what it called the deterioration of Hong Kong’s high degree of autonomy and the use of the national security law imposed by Beijing in 2020.

“The national security law is used to crack down on pro-democracy forces, stifle dissent and pluralism, and erode fundamental freedoms,” he said.

“The EU is concerned that some definitions and provisions in the proposed [Article] 23 legislation will equal the scope and the draconian measures of the national security law, or even go beyond those, and further weaken Hong Kong’s remaining freedoms.”

Johannes Hack, president of the German Chamber of Commerce, said it would have to review the paper carefully to gauge its potential effects, but said there was concern that business stakeholders in Germany and Europe would perceive the legislation as moving Hong Kong closer to mainland China.

He said the document’s wording, how frequently and where the law would be used would be important to deal with those perceptions.

“For instance, up to now, we know of no instances where reporting on the business prospects or financial results of a company based in Hong Kong or with business in [mainland] China has been subject to legal review or challenge by any authorities here,” he said.

But if that were to change, he said, it would “clearly have an impact” on the perception of Hong Kong as an international financial and business centre.

He added that his organisation had consistently told the government that a focus on the “one country, two systems” governing principle, which guarantees Hong Kong a high degree of autonomy, would be beneficial to the chamber.

Hong Kong leader unveils details of domestic national security legislation

“This is to counter any perception that Hong Kong today is ‘just another Chinese city’ which we believe is not justified at present.”

A survey of more than 100 businesses by the American Chamber of Commerce in Hong Kong, published on Tuesday, showed that 11 per cent of companies polled felt less welcomed in 2024 compared with the previous year, citing what they saw as the government’s failure to address concerns over the national security law, Article 23 and judicial independence, among other issues.

The survey also showed 67 per cent of respondents felt that toning down the rhetoric on national security on both sides could improve ties between the city and the US.

Veteran politicians on Wednesday said that while the new list of “state secrets” covered a broad range of information, the work of journalists would not be affected even when reporting major market-moving news.

Exco member Tong said the legislation would not disrupt the work of the media as obtaining such “secrets” had to be an “act of theft” with the “intention to commit crime”.

Explain Hong Kong’s Article 23 to show government has ‘nothing to hide’: scholars

“It will be difficult to prove the intention if the media obtains the information but is unaware of the impact on national security. But the damage to national security should be the main consideration instead of the benefits to public interest,” he said.

Tong said journalists should approach the relevant authorities to clarify whether the information they obtained was classified as “state secret” before reporting it, and believed this would not affect their reporting.

Tam Yiu-chung, the city’s former sole delegate to the apex body of the national legislature, told the same radio show that he believed most reporting would not breach the law as it only covered local policy developments.

“The media should have much experience with obtaining information and deciding whether to publish it. They have to carefully consider whether they should broadcast the information they obtained and if it constitutes state secrets,” he said.

But many factors would need to be considered by prosecutors such as intent, whether the crime was plotted and organised, and the impact on national security, he said.

City leader John Lee Ka-chiu on Tuesday kicked off a 30-day consultation exercise to gather public feedback on the sweeping domestic national security legislation that targets ­treason, insurrection, sabotage, foreign interference, theft of state secrets and espionage.

Overseas lawyers ‘will need approval to handle cases under new Hong Kong security law’

The Official Secrets Ordinance will be updated to cover seven types of “secrets”, including information about major policy decisions on national and local affairs, the economic, social, technological or scientific development of the country or city, and external affairs of Hong Kong and its relationship with Beijing.

The paper recommends introducing a new espionage offence to ban anyone from participating in, backing or receiving advantages from external intelligence organisations.

It also proposes a new external interference offence to target several acts, such as influencing the central and local governments in formulating or executing any policy and interfering with the city’s elections and the legislature’s work in collaboration with outside forces.

The consultation paper recommends empowering the government to prohibit the operation of certain organisations on the grounds of safeguarding national security as well.

Hong Kong is constitutionally obliged to enact its own legislation banning seven types of national security offences, which would supplement the Beijing-imposed national security law prohibiting acts of secession, subversion, terrorism and collusion with foreign forces.