London Daily

Focus on the big picture.
Friday, Aug 22, 2025

National security law: foreign firms in Hong Kong look at plan B if free flow of information restricted

Senior executive at investment company says it is preparing plans to mitigate the impact of the law once it is passed. Internet industry association chief says some clients had planned to expand data centres or cloud services in Hong Kong but are now looking elsewhere

A number of foreign firms in Hong Kong are drawing up contingency plans, such as relocating some operations, as protection against any investment repercussions from the impending national security law, industry insiders say.

Their concerns centred on whether the law being drawn up by Beijing would restrict the free flow of information in the city and hamper business development, Lento Yip Yuk-fai, chairman of the Hong Kong Internet Service Providers Association, said on Monday.

“Some clients originally planned to expand their data centres or cloud services in Hong Kong, which serves as a data centre hub,” he said. “But after news of the security law surfaced, they withdrew their plans and indicated to me that they were now considering moving their data centres or cloud servers to countries such as Singapore, Japan and Malaysia.”

The American Chamber of Commerce in Hong Kong (AmCham) found in a recent survey that 30 per cent of 180 members had plans to move capital, assets or operations from the city and were eyeing the United States, Tokyo, Singapore and Taipei as potential destinations.

The law, which could be passed as early as this month, will outlaw acts of secession, subversion, terrorism as well as collusion with foreign and external forces to endanger national security.

On Saturday, state news agency Xinhua outlined more details of the legislation including that the law would provide safeguards to uphold international human rights standards and other freedoms.

The Hong Kong government must also establish new institutions designed to protect national security, and allow mainland Chinese agencies to operate in the city “when needed”.

One senior executive at a medium-sized investment company said it was preparing plans to mitigate the impact of the law once it was passed. He declined to elaborate on his company’s plans, but did not rule out relocating some operations.

“We have to make plans to anticipate business sentiment in the city and also out of an abundance of caution in case parts of the law are defined very narrowly, especially on foreign involvement,” he said.

Yip said many clients were concerned the law would turn Hong Kong into just another mainland Chinese city with restrictions on information.

“These firms are worried that if a firewall is imposed on them to control incoming and outgoing network traffic, the city’s free flow of information might be undermined,” he said.

“They may feel uncertain about the city’s business development and therefore reconsider their investment plans.”

Prominent businessman and former lawmaker James Tien Pei-chun said foreign business groups he met told him their members had not made any plan B yet.

“The group leaders indicated to me that their members would like to wait and see enforcement details first before making any contingency plans,” he said.

However, Tien said some foreign professionals, such as lawyers and accountants, were concerned their clients’ information could be seized and searched on suspicion of breaching the law.

“But for British or US firms in the finance sector, they are not too worried as they tend to believe that China will maintain Hong Kong’s status as a financial centre,” he said.

Tien said some French and Italian firms viewed the law positively, hoping it might calm the social unrest that erupted a year ago and revive consumption in the retail and dining sectors.

Hong Kong General Chamber of Commerce chief executive George Leung Siu-kay said the body had no information on whether members had made plans. But he noted monetary data and exchange rates had not shown capital outflow or companies retreating from Hong Kong.

“Personally, as a veteran economist, I don’t think companies can easily make a plan B to replace Hong Kong. The city has the banking, rule of law and talent to support the companies to run their business in Asia-Pacific. Singapore may be the closest one but still cannot fully replace Hong Kong,” Leung said.

He also said many of the chamber’s 4,000 members, which include players such as HSBC, Jardines and Swire Pacific, used Hong Kong as a gateway to the Greater Bay Area.

“If these companies skip Hong Kong and directly operate in mainland cities, or if they move out of Hong Kong to overseas cities to manage their mainland businesses, they will still be under the mainland’s national security law which is more restrictive than Hong Kong,” Leung said.

“Unless a company wants to completely cut off any China operations, I do not see why they need to have a plan B to move out of Hong Kong to other cities.”

However, the International Chamber of Commerce – Hong Kong said the international community would see a troubling erosion of the city’s high degree of autonomy and overseas talent would be unwilling to come and work in Hong Kong as a result of the law.

“An important aspect of the Basic Law is that … the important values and freedoms required to transact business competitively in Hong Kong, such as the rule of law and the free flow of information, are fully ring-fenced and protected by the ‘two systems’ concept,” it said.

“But the way in which the national security law is being introduced breaches this fence and is a considerable cause for further concern that it could be the precedent for further breaches in the future.”

Newsletter

Related Articles

0:00
0:00
Close
After 200,000 Orders in 2 Minutes: Xiaomi Accelerates Marketing in Europe
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
MSNBC Rebrands as MS NOW Amid Comcast’s Cable Spin-Off
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
Finnish MP Dies by Suicide in Parliament Building
Outrage in the Tennis World After Jannik Sinner’s Withdrawal Storm
William and Kate Are Moving House – and the New Neighbors Were Evicted
Class Action Lawsuit Against Volkswagen: Steering Wheel Switches Cause Accidents
Taylor Swift on the Way to the Super Bowl? All the Clues Stirring Up Fans
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Apple Expands Social Media Presence in China With RedNote Account Ahead of iPhone 17 Launch
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Cambridge Dictionary Adds 'Skibidi,' 'Delulu,' and 'Tradwife' Amid Surge of Online Slang
Bill Barr Testifies No Evidence Implicated Trump in Epstein Case; DOJ Set to Release Records
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
The CEO Who Replaced 80% of Employees for the AI Revolution: "I Would Do It Again"
Emails Worth Billions: How Airlines Generate Huge Profits
Character.ai Bets on Future of AI Companionship
China Ramps Up Tax Crackdown on Overseas Investments
Japanese Office Furniture Maker Expands into Bomb Shelter Market
Intel Shares Surge on Possible U.S. Government Investment
Hurricane Erin Threatens U.S. East Coast with Dangerous Surf
EU Blocks Trade Statement Over Digital Rule Dispute
EU Sends Record Aid as Spain Battles Wildfires
JPMorgan Plans New Canary Wharf Tower
Zelenskyy and his allies say they will press Trump on security guarantees
Beijing is moving into gold and other assets, diversifying away from the dollar
Escalating Clashes in Serbia as Anti-Government Protests Spread Nationwide
The Drought in Britain and the Strange Request from the Government to Delete Old Emails
Category 5 Hurricane in the Caribbean: 'Catastrophic Storm' with Winds of 255 km/h
"No, Thanks": The Mathematical Genius Who Turned Down 1.5 Billion Dollars from Zuckerberg
The surprising hero, the ugly incident, and the criticism despite victory: "Liverpool’s defense exposed in full"
Digital Humans Move Beyond Sci-Fi: From Virtual DJs to AI Customer Agents
YouTube will start using AI to guess your age. If it’s wrong, you’ll have to prove it
×