Hong Kong’s controversial extradition bill has made some finance professionals question whether they want to remain in the city over the long term, while others are rallying round the aims of the protest movement.
“While I’m not personally worried about being extradited to China myself, I am concerned about the negative impact on Hong Kong’s standing as a financial centre when the bill presumably becomes law. Because of this I now want to move to Singapore,” says a banker from a major global bank, who asked not to be named.
Hong Kong’s independent legal system has traditionally given it a “clear advantage” over Shanghai as a financial centre, adds the banker, who is a local Hongkonger. “But the extradition bill undermines the rule of law by exposing us to the mainland courts – it takes away what is unique about Hong Kong. Banks might one day ask ‘what’s the difference between Hong Kong and Shanghai?’, and should we be expanding in Singapore instead?,” he says.
A director at a US bank in Hong Kong agrees. “Banks like us are based here because of the rule of law. The bill is another sign that Hong Kong is shifting in the wrong direction – and that’s sad,” he says.
But while global banks with large local infrastructures won’t be scaling back in Hong Kong anytime soon, nimble fintech and buy-side businesses may start to look more closely at Singapore. On Wednesday, Gillem Tulloch, founder of GMT Research, became one of the first Hong Kong finance professionals to say that he might relocate his boutique firm to Singapore. He’s concerned that its often-critical research reports into mainland companies make its staff vulnerable to false allegations in China that could be used as a pretext for extradition.
Meanwhile, the protest movement that has railed against the extradition bill over the past few days appears to have garnered substantial support in the Hong Kong finance sector.
“While the 2014 Umbrella Movement protests were about wider issues of democratic representation, the current protests are about a specific law which is perceived to be anti-business,” says a Hong Kong-based trader-turned headhunter. “That’s why many people working in finance are so against it. The protests late this week may have been dominated by students and have turned sour, but on Sunday they were very inclusive, and included many white-collar professionals,” he adds.
The banker we spoke with says while he didn’t attend Sunday’s march, many of his colleagues and clients did. “I support the protesters' aims, but not all of their methods. They’re telling the world that what’s happening here is shocking,” he adds.
The extradition bill is needed to prevent Hong Kong becoming a “haven” for fugitives, according to Carrie Lam, the city’s Beijing-backed leader. In March, following lobbying from the business community (including banks), Hong Kong’s government reduced the list of offences covered by the extradition agreement, removing nine categories of financial crimes, including bankruptcy, securities and futures, and intellectual property.
This concession has had little impact on sentiment within the finance community, says the former trader, who is originally from the UK. “This isn’t just an issue that locals are upset about – expats are angry too. Suddenly there’s the possibility that anyone from any country who’s visiting or living in Hong Kong could in theory be extradited to China, where the rule of law isn’t strong,” he adds.
Image credit: LewisTsePuiLung
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