The U.S. should not revoke Hong Kong’s special status: Jimmy Lai

The U.S. should not revoke Hong Kong’s special status because it would lose its bargaining power, which stems from its status as a financial hub, said publishing tycoon Jimmy Lai — one of the city’s most prominent democracy activists.

Last week, American President Donald Trump said he would strip Hong Kong of its special status with the U.S in response to Beijing’s decision to impose a national security law on Hong Kong, a special administrative region of China. That designation has shielded the city from tariffs the U.S. slapped on China as part of the long-drawn trade war.

“By taking away Hong Kong’s special status, Hong Kong is dead, Hong Kong is no longer Hong Kong because the residual value of Hong Kong — in the eyes of the international community and in the Chinese regime’s eyes — is totally gone,” said Lai, the founder and executive chairman of Next Digital.

China last week approved the plan to impose national security laws in the Chinese city of Hong Kong. It comes amid protests about eroding freedoms in the territory, as the new law will bypass the city’s legislature.

Without the rule of law, there will not be protection for people who do business here.

Jimmy Lai

founder and executive chairman of Next Digital

Since Hong Kong’s sovereignty was transferred from the United Kingdom to China in 1997, the former British colony has been ruled under the “one country, two systems” framework. That structure grants the city freedoms and limited autonomy that those in mainland China do not have — such as freedom of speech and the right to protest.

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China says Hong Kong will still retain its autonomy even with the new law that targets secession, subversion of state power, terrorism and foreign interference. However, those who oppose the law say it will further erode Hong Kong’s autonomy and gives the central government greater powers to stamp out dissent. 

Whether the U.S. pulls that special status or not, the implementation of Beijing’s law would render Hong Kong’s status as an international and financial trading hub nought, Lai told CNBC’s “Street Signs.” He argued the measures would hit business and investor sentiment.

“Without the rule of law, there will not be protection for people who do business here,” said Lai.

“Without the rule of law, there won’t be mutual trust for the financial businesses. Without mutual trust, transactions in minutes or seconds will not be possible,” he said.

Authorities have said the law will only target a small group of people who harm national security.

However, that would deny freedom for the vast majority of people, Lai argued. After all, the Hong Kong police is around to handle the small group, he said.

“This is the death knell for Hong Kong and everybody in business (and) in the legal system, everybody knows this is very serious,” he added.

Lai said, however, he would stay invested and fight to the finish.

“I will stay until the end to fight, I can’t leave. I’m one of the troublemakers, I can’t make trouble and leave,” he said. “This is my home, I got to fight to the end.”