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Politics

New Hong Kong regulations threaten to stifle financial hub

Potential restrictions on travel and reduced corporate disclosure spark concern

Hong Kong has served as an international financial and business hub, largely thanks to its laissez-faire economic policies.   © Reuters

HONG KONG -- From limiting public access to corporate information to a potential travel ban, new rules and proposals by the Hong Kong government have raised concerns over the city's future as a free and open economic hub.

The Hong Kong government last month announced plans to allow companies to limit information available to the public on the city's companies registry. The registry currently includes data like the addresses and ID numbers of corporate executives.

The government in explaining the move cited a rampant misuse of personal information. But some accountants and lawyers warn the change could impede audits and debt collection. The International Chamber of Commerce in Hong Kong sent a letter to lawmakers urging them to reconsider.

Companies have long been drawn to Hong Kong for its laissez-faire economy, which allows them to operate with minimal government interference. But the city appears to be rapidly losing the attributes that have made it a thriving Asian financial hub.

While Chief Executive Carrie Lam insists the national security law passed last year in response to widespread pro-democracy protests in Hong Kong serves to stabilize the business environment, concerns about its impact on business persist.

A survey by the American Chamber of Commerce in Hong Kong this month found that 42% of its members were considering or planning to leave the city. China's sweeping national security law over Hong Kong was the most commonly cited reason for those plans.

Hong Kong also last month passed an immigration law, which allows the government to order airlines to prohibit certain passengers from boarding. Critics say the law could prevent residents and others from leaving the city.

Some businesspeople in mainland China have faced a similar exit ban. The U.S. State Department has expressed deep concerns over the immigration law. But the Hong Kong government hit back, saying the law is mainly intended for asylum-seekers headed to the city.

Hong Kong will also raise the stamp duty on stock trading in August for the first time since 1993. Despite the effect on markets, the city's overwhelmingly pro-Beijing legislature passed the increase after an unusually short debate and little opposition.

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