The political climate in Hong Kong has been more climactic over the past couple of years especially regarding recent protests and Chinese government crackdown of Hong Kong’s autonomy.

At the beginning of January 2021, more than 50 of Hong Kong’s most prominent pro-democracy activists and politicians were arrested in the biggest crackdown since China imposed their security law last year. About 1,000 police took part in raids on 72 premises across the city including those who helped run an unofficial “primary” to pick opposition candidates ahead of postponed 2020 elections. They are accused of trying to “overthrow” the government. China’s government imposed the legislation on the semi-autonomous territory in June 2020, saying it was necessary to curb months of sometimes violent pro-democracy protests. Beijing defended these arrests, with Foreign Ministry spokeswoman Hua Chunying saying they were needed to stop “external forces and individuals [colluding] to undermine China’s stability and security”. But the crackdown appeared to confirm the fears of many who warned about the reach of the law, with Amnesty International saying the arrests are “the starkest demonstration yet of how the national security law has been weaponized to punish anyone who dares to challenge the establishment”. Former United States Secretary of State, Mike Pompeo, noted that Washington may sanction China. Pompeo said he was also “appalled” by the arrest of an American citizen in the crackdown and added: “The United States will not tolerate the arbitrary detention or harassment of U.S. citizens.” An example of this on an individual level can be seen with Jimmy Lai, Lai, detained while awaiting a bail hearing, was charged with colluding with foreign forces under a sweeping national security law that Beijing imposed on Hong Kong last year. The fugitives could face potential charges in Hong Kong over mass anti-government protests in 2019, with Andy Li, whom the papers identified as the person Lai was suspected of helping, being investigated for suspected national security crimes.

Hong Kong’s High Court has denied another bail application by Lai, the most high-profile person to be charged under the city’s national security law. The decision came in February, after the Court of Final Appeal ruled that a lower court’s decision last year to grant him bail applied “an erroneous line of reasoning”, but allowed Lai’s team to make a new application to the High Court.

Even more recently, to even further restrict Hong Kong’s ability to freely elect leaders, China’s parliament in mid-March overwhelmingly endorsed a proposal on “improving the electoral system” of Hong Kong. The passage of the “draft decision” was considered all but inevitable after the Chinese government announced plans to revamp Hong Kong’s electoral system this February. The stated goal of the draft changes is to ensure that only “patriots” govern Hong Kong, a definition which Chinese officials have made clear requires not only loyalty to the country, but loyalty to the Communist Party. The decision includes a plan to alter the size and composition of the city’s legislature, increasing the number of seats from 70 to 90, therefore reducing the overall percentage of democratically elected officials.


International Reaction to Hong Kong Crackdowns

This recent crackdown has rendered a major international background outside of the US. The UK has offered a new visa to allow for Hong Kongers to immigrate. Nearly 5,000 Hong Kong citizens have applied to live, work and study in the United Kingdom under a new visa scheme which opens up a path to British citizenship for people fleeing China’s crackdown in the former British colony, The Times newspaper reported. London made these changes to its visa rules to give millions of Hong Kong residents a chance to settle in Britain in response to China’s new security law, that democracy activists say will end the freedoms promised to the territory in 1997. Under the rules, Hong Kong residents who hold a British National Overseas (BNO) passport will be allowed to live in the United Kingdom for five years and then apply for “settled status” and citizenship.


A Positive in the Dark Tunnel

Outside of the political turmoil, Hong Kong has been handling the COVID-19 crisis well. Throughout the course of the past year, 8000+ cases have been confirmed; Hong Kong has strict quarantine protocols in place for inbound travelers and citizens. They will follow similar vaccination methods of other countries, focusing on high risk groups first then tiering out to the remaining population.

With everything going on in Hong Kong, it has been noted that there could be an overall shift out of Hong Kong to Singapore, a major Asian financial hub, over the next 5-10 years. With that being said, brokers and consultants will need to take a look at how global companies are reacting to these chains of events and plan their insurance needs. If clients are relocating employees or operations out of Hong Kong, please contact the Global Risk Team at IMAGlobal@imacorp.comto evaluate the next steps.



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