Hong Kong stocks fell 3.2%, leading falls in Asia and the Hong Kong dollar dropped slightly against the US greenback
Hong Kong activists called for a protest march on Friday against Beijing’s plans to impose national security legislation in the semiautonomous city, raising concerns over its freedoms and its status as a global financial hub.
The move also hit financial markets, with Hong Kong stocks selling off as China’s parliament sat on Friday to discuss the new laws.
While it was unclear whether the unauthorized march, proposed to start at noon near the central financial district and end at China’s Liaison Office, will materialize, it was a sign that Hong Kong could soon plunge into renewed unrest.
The legislation could be a historical turning point for Hong Kong and heighten geopolitical tensions between Beijing and Washington, whose relationship is already weakened by trade disputes and reciprocal accusations over the coronavirus pandemic.
“It is starting to look like a US-China summer of discontent in the making,” said Stephen Innes, chief global market strategist at AxiCorp.
Hong Kong stocks fell 3.2%, leading falls in Asia and the Hong Kong dollar dropped slightly against the US greenback.
Speaking on Friday in his annual report to the Chinese parliament, Premier Li Keqiang said China will establish a “sound” legal system and enforcement mechanisms to ensure national security in Hong Kong and Macau, its other semi-autonomous city.
A previous attempt to adopt similar legislation in 2003 was met with a protest that drew around half a million people onto the streets and was eventually shelved.
China’s action comes after the large scale and often violent pro-democracy demonstrations in 2019, the biggest crisis the former British colony has faced since it returned to Chinese rule in 1997.
Pro-democracy activists and politicians have for years opposed the idea of national security laws, arguing they could erode the city’s high degree of autonomy, guaranteed under the “one country, two systems” handover agreement, which China says it is undermined by protesters.
Local pro-democracy lawmakers denounced the plans on Thursday night as “the end of Hong Kong”.
“Beijing is attempting to silence Hong Kongers’ critical voices with force and fear,” pro-democracy activist Joshua Wong tweeted. “Deep down protesters know, we insist not because we are strong, but because we have no other choice.”
The introduction of Hong Kong security laws on the agenda of the Chinese parliament, which begins its annual session on Friday after a months-long delay due to the coronavirus, drew a warning from US President Donald Trump that Washington would react “very strongly”.
The US State Department also warned China, saying a high-degree of autonomy and respect for human rights were key to preserving the territory’s special status in US law, which has helped it maintain its position as a world financial centre.
Taiwan’s Mainland Affairs Council urged Beijing on Friday not to lead Hong Kong into “bigger turmoil” due to wrong policy decisions.
An editorial in the state-backed China Daily newspaper late on Thursday said the proposed legislation will “better safeguard Hong Kong’s development”.
“The overreaction of those rioters and their foreign backers, who see such legislation as a thorn in their side, only testifies to the pertinence of the decision and the urgent need for such legislation,” it said.