As we move deeper into July, the effects of the national security law are already making themselves felt – not only within Hong Kong, but far beyond its borders, thousands of miles away in the territory’s former colonial ruler. Britain, which opposes the law, worries that the enactment of the law establishes a precedent for China to thwart British interests anywhere in the world.
This is because, despite China’s furious assertions to the contrary, Britain sees its national interest as being intertwined with Hong Kong in two ways: first, it is a party to the Joint Declaration under which China promised that Hong Kong people would continue to enjoy their basic freedoms for 50 years after the handover in 1997, and second, there are hundreds of thousands of British nationals in Hong Kong.
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In British eyes, if China breaches the Joint Declaration or if British nationals are endangered, its own interests are compromised.
Yet four British companies (HSBC, StanChart, Swire and Jardines), under pressure from China, have endorsed the controversial law.
British companies’ apparent support for what London sees as an erosion of freedoms highlights a weakness in the UK’s legal framework. There is currently no basis to sanction companies for supporting governments that damage British interests.
It is this lack that left the four British organisations vulnerable and they still are: most of their business is China-sourced.
More companies could side with China in future unless Britain considers changing its law to give them the ability to say ‘no’ to outside pressure. It could do this by legally prohibiting companies from supporting any government deemed to be damaging British interests.
This is not untested theory: we saw it work with the Bribery Act, which gave British companies the perfect excuse to refuse to do special favours for overseas business counterparts. After 2010, they could say “I’d love to arrange a Disneyworld vacation for your family, but this new British law forbids it.” No-one likes paying bribes, and the law made it easier not to.In the same way, Britain could enable its multinationals pressured by Beijing to say: “I’d love to declare my support for the Communist Party’s latest idea, but it’s against UK law for me to do so.”
The current Conservative government in the UK, which prides itself on being business-friendly, is resistant to the idea of legislating in this way. The idea of even more law to regulate business behaviour is unattractive.