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Tuesday, June 02, 2020, 09:03
Financial chief: National security law to benefit HK in long run
By Pamela Lin
Tuesday, June 02, 2020, 09:03 By Pamela Lin

A national security law for Hong Kong is urgently needed to preserve the city’s social economic and political stability, Financial Secretary Paul Chan Mo-po said on Monday.

In his second comment in two days on the proposed legislation and the following US sanction threats, the financial chief said violent protests and separatist activities that have re-emerged in Hong Kong are worrying investors.

Violent protests and separatist activities that have re-emerged in Hong Kong are worrying investors

 Paul Chan Mo-po

Financial Secretary

National security legislation will strengthen Hong Kong’s status as a financial, trade and logistic hub in the long run, Chan said after a Legislative Council meeting.

Chan reassured that the city’s free flow of capital and convertibility of the Hong Kong dollar will also remain intact, as they are safeguarded by the Basic Law, Hong Kong’s constitutional document.

The city’s linked exchange rate system – which pegs the local currency to the US dollar – is supported by over US$440 billion in foreign exchange reserves, he added.

Chan made similar remarks in his official blog on Sunday, a day after US President Donald Trump announced the decision to revoke Hong Kong’s special trade status.

In response to the impending sanctions, Chan repeated his argument in the blog that the dollar peg will not be affected as it does not need approval from the US to operate.

The peg has been in place since 1983, while the US Hong Kong Policy Act, under which the sanctions will be imposed, was enacted only in 1992, the blog read.

According to Chan, there have been no significant outflows of capital, and only a few local residents have inquired about opening overseas bank accounts after Trump’s announcement.

He said US-listed mainland tech companies would actively consider second listings in Hong Kong, as the SAR remains an ideal place for them to raise funds, he said.  

In the past decade, the US has enjoyed substantial benefits in Hong Kong and the US trade surplus with Hong Kong amounted to almost US$300 billion, noted Chan.

He said any restrictive measures on Hong Kong will also hurt the business operations of US enterprises in the city.  

Hong Kong stocks ended 3.36 percent higher on Monday. The city’s benchmark Hang Seng Index gained 771.05 points, or 3.36 percent, to close at 23,732.52. Market turnover was HK$150.8 billion.

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