Hong Kong’s economic integration into the Greater Bay Area will accelerate now that the Special Administrative Region has adopted its controversial national security legislation, according to the latest report issued by Steve Vickers and Associates (SVA), a specialist political and corporate risk consultancy.
The latest report is the 17th update released by the company since the Hong Kong social unrest began last year. It highlighted that “stability is returning to Hong Kong” but “this stability comes at a price. Political shifts have accompanied the new law.”
SVA’s advice to businesses based in or operating out of Hong Kong is to “quickly adapt to this new situation.”
“On the one hand, a return of stability in Hong Kong will benefit commerce, but, on the other, businesses must be mindful that political differences remain intense, and that a studied neutrality will be increasingly hard to maintain, particularly for prominent global companies,” noted SVA in the report.
“The situation is challenging, for sure, but does not represent the death of Hong Kong. After all, the expertise and skills of Hong Kong’s people, developed over decades, have not vanished.”
“Rather, a shift is under way, from Hong Kong’s longstanding role as a window into China, into a platform from which Chinese businesses […] can tap the markets, or manage external interests.”
SVA expects that the adoption of the national security legislation will expedite the pace of economic integration within the Greater Bay Area.
With very little understood about the future of the regional economy, “this transition may challenge some businesses, particularly those advising western businesses on how to handle investments on the mainland,” noted SVA. However, others stand to benefit “if they respond nimbly.”
The national security legislation was approved by China’s State Council on June 30 and adopted in Hong Kong. It has effectively quashed the social unrest, which last year included mass demonstrations and often violence.