Chan puts stock in law amid fears

Local | Mandy Zheng 15 Jul 2020

Financial Secretary Paul Chan Mo-po says there has been a recent influx of foreign capital in the local market since the national security law came into effect - rather than driving away investors.

Speaking at an online forum on one country, two systems organized by the Bauhinia Magazine, Chan said the Hong Kong dollar has remained strong since April.

He said the Monetary Authority has had to defend the currency peg a number of times by selling the local currency and buying the greenback - bringing in more than HK$100 billion as a result.

Chan cited recent stock market gains as further evidence that the law had brought stability to Hong Kong's investment environment.

"Some claimed that the law would affect investors' confidence and cause capital outflows. I can only say, this is a subjective speculation regardless of reality," Chan said.

He added that the local stock market is stronger, with turnover hitting a single-day record exceeding HK$200 billion.

"Over the past two months, [those working in] the finance sector have told me that they and their clients universally acknowledge the necessity and urgency of the national security law," Chan said.

But veteran market commentator Law Ka-chung said Chan's arguments are not well established, as the capital inflows the city has seen in recent months mainly resulted from the rising global stock market since the end of March.

"To analyze the impact of national security law, we need to look at long-term capital, such as household savings and foreign reserves," Law said.

Meanwhile, the Basic Law Committee's deputy director Maria Tam Wai-chu said at the forum that local courts cannot challenge whether any national laws implemented in the SAR, including the national security legislation, breach the Basic Law.

"The high degree of autonomy that Hong Kong enjoys does not include legislation of national security," Tam said. "The national security law is not a subsidiary of the Basic Law."

Tam also denied concerns that the law would damage the one country, two systems policy, saying that the city has been allowed to handle most national security-related cases by itself because Beijing values the policy.

During the forum, Tam Yiu-chung, the city's sole delegate to the National People's Congress standing committee, said that the law represents "Hong Kong's return [to China] for the second time."

His comments referred to a clause in the law stipulating that civil servants swear allegiance to the SAR and take an oath to uphold the Basic Law.

He said that this regulation can help officers "resume rectitude and better serve their duties [as part of] the government."

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