Tuesday 10th June marked the 1-year anniversary since protesting and civil disobedience erupted onto the streets of Hong Kong, in what resulted in some of the worst protesting and civil unrest in the financial hub’s history.
Days turned into weeks, weeks turned into months, and months turned into a year, following the announcement by Chief Executive Carrie Lam that new laws would be introduced allowing extradition to the Chinese mainland for convicted criminals.
Criticism of the plans set out that judicial independence was at stake and it would make it harder for dissidents to protest and demand change. Following fierce criticism as well as unwanted media attention from across the globe, Lam announced the withdrawal of the bill back in September, but this did little to quell the unrest and protests continued.
Hong Kong’s relationship with China as ‘one country, two systems’ was based on the agreement made between China and Great Britain, when the former colony was handed back to China under an agreement that came to pass back in 1997. However, the extradition legislation was seen as an attempt to undermine that agreement.
Following the outbreak of the Coronavirus pandemic, China has come under increasing fire internationally for its handling of the initial stages where the virus was thought to have originated in the Wuhan province, with some – most vocally President Trump – accusing the communist republic of a cover up.
Chinese turmoil
China’s relationship with The West was already under quite a bit of pressure after a trade war erupted between them and The US back in 2018 when the US President Donald trump introduced import tariffs on Chinese goods, essentially making US consumers pay more for some Chinese products to encourage them to buy American instead.
The Chinese responded in kind, implementing their own tariffs the following year on things like Levi jeans, soy products and Harley Davidson’s.
It pales into significance now, considering the precarious global economy following the outbreak of Coronavirus, but the pandemic has ensured that US-Chinese relations deteriorated even further.
Now the European Union has also taken aim at the communist state, accusing it of spreading disinformation about Covid-19 across western democracies.
All in all, it’s not been a very good exercise in positive PR for China, and this has now been exacerbated by China announcing recently that it would be imposing a new security law on Hong Kong which sought to make a raft of activities illegal.
The news has caused huge concern not just in Hong Kong but across the international community who are worried about possible further unrest and China attempting to take one of the economic jewels of the global economy under its iron grip.
A benefit for the UK?
What does this mean for the likely future of Hong Kong, which has been an enormously successful economy in recent times, and a place where wealthy investors enjoy not just spending their time but also putting their money?
Depending on the outcome of these new legal proposals from China, the outlook isn’t particularly good. With the Chinese state having a far greater and more imposing direct influence, many international investors could be worried about having their wealth confiscated, or even having themselves imprisoned if they fall foul of the Chinese government.
We already know that Hong Kong, London and the wider UK share an excellent relationship, as well reciprocal investment and trade benefits.
With that in mind, and with the UK government recently announcing they intended to offer up to 3 million Hong Kong nationals a visa, it’s not difficult to see a huge influx of wealth from the city.
Hong Kong nationals already put a great deal of wealth and investment into the UK property market; house prices here are much cheaper than in Hong Kong and can generate much higher yields, particularly in the regional markets. If the new proposals come to pass, it’s difficult to imagine that investment wouldn’t increase given that the UK market has already started recovering at one of the quickest rates in the world.
The UK market looks increasingly stable and ripe for growth, so with the Chinese government increasingly looking to take a greater role in Hong Kong, we could well see a large influx of investment in the coming months.
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