FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html.
S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions. | EU Data Subject Requests
China’s central government on Tuesday unanimously passed a National Security Law to be imposed in Hong Kong, according to multiple reports from local media, each citing unnamed sources. The measure moved forward despite widespread opposition from lawmakers and citizens in Hong Kong as well as foreign business groups and governments, notably the U.S.
Proponents say the law will bring “stability” to a city rocked by months of protests opposing Beijing’s heavy-handed influence in Hong Kong. Critics say the law—and the manner in which it was promulgated—is a death knell for the unique characteristics that made Hong Kong a thriving international hub for business.
Beijing has moved incredibly fast to pass the law, doing so in a little over a month. The central government announced it would impose a national security law for Hong Kong on May 21, during the first day of the Two Sessions, the annual meeting of China’s ‘rubber stamp’ parliament that announces targets and laws for the year ahead. A proposal for the law was filed on May 22 and approved by China’s parliament on May 28.
Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox.
In Hong Kong, Beijing’s announcement came as a surprise. Under Basic Law—the mini constitution that defines Hong Kong’s status as a Special Administrative Region—Hong Kong is supposed to create and implement a national security law by itself. The local government attempted to do so in 2003, but the measure was shelved after months of questioning by lawmakers and a massive street protest.
Beijing’s promulgation of the new law has sidestepped Hong Kong’s legislative process. Central authorities have even expedited their own approval process to fast-track the law. Laws need to be reviewed twice by China’s top legislative body, the NPCSC, in order to pass. The NPCSC normally meets once every two months but met twice in June—once on June 20 and again on June 28—to give the national security law its due process. The expedited timeline ensured the law would go into effect before Hong Kong’s local elections in September that could have swept pro-democracy lawmakers into office.
According to the Basic Law, Beijing must consult Hong Kong’s leadership throughout the process of promulgation, but Hong Kong’s top lawmakers—despite supporting the law—have admitted to not knowing any details of the bill beyond those aired by Chinese state media.
Broadly, Beijing let it be known that the national security law would target sedition, terrorism, and acts of foreign interreference—later changed to prohibit “collusion with foreign forces.”
Despite not knowing details, Hong Kong officials loyal to Beijing have openly declared support for the bill. The Hong Kong government also spent $900,000 to advertise the impending law, plastering buses, billboards, trams, and escalator walls with adverts that simply read, “National Security Law. Preserve One Country, Two Systems. Restore Stability.”
Hong Kong’s independent judiciary is often cited as a key factor in Hong Kong’s development as a hub for international business. Opponents of the national security law say Beijing’s refusal to consult local lawmakers on the process has undermined the local courts, creating an uncertainty that poses a major risk to business.
The American Chamber of Commerce in Hong Kong warned on May 22 that Beijing’s move to “bypass the Hong Kong legislative process to enact a Hong Kong security law may jeopardize future prospects for international business.” Yet the business group later released a survey that showed 70% of respondents planned to keep their business in Hong Kong, despite the impending new law.
Businesses with major operations in mainland China have voiced support for the new law. On June 3, HSBC Asia-Pacific chief executive Peter Wong signed a petition supporting the law after former Hong Kong chief executive C.Y. Leung publicly criticized the bank for remaining quiet on the issue.
U.S. Secretary of State Mike Pompeo said Beijing’s “browbeating” of HSBC was “a cautionary tale” for other companies that rely on China’s market. The White House has been vocal in its opposition to the law and the U.S. State Department determined in May that Hong Kong can no longer be considered a separate economic entity from mainland China, due to Beijing’s promulgation of the law.
Days later, President Donald Trump ordered his administration to “revoke Hong Kong’s preferential treatment as a separate customs and travel territory from the rest of China.” The action could result in Washington imposing tariffs—like those imposed on China during the trade war—on Hong Kong exports while limiting the city’s free access to the U.S. dollar. Another consequence: on Monday the U.S. halted exports of sensitive technology to Hong Kong.
In negotiations with Britain over the return of Hong Kong in the 1980s, Beijing pledged the city’s “way of life” would remain unchanged for 50 years. The national security law is due to go into effect on Wednesday, July 1—the 23-year anniversary of Hong Kong’s return to Chinese sovereignty.
Police have denied permission for a march in protest of the national security law to be held in Hong Kong on Wednesday. Organizers have said they will hold the demonstration anyway. Those involved could be the first in Hong Kong to be in violation of the new national security law.
A group of civil rights organizations blasted Facebook on Wednesday, calling out the platform’s role in allowing hate and bigotry to fester and urging an advertiser boycott.
The groups, including the NAACP, Color of Change and the Anti-Defamation League, are asking what the social network could do with the $70 billion in annual revenue that it makes from advertising — claiming that Facebook’s tolerance of hate allowed white supremacy and racism to flourish.
“Today, we are asking all businesses to stand in solidarity with our most deeply held American values of freedom, equality and justice and not advertise on Facebook’s services in July,” a full page ad in The Los Angeles Times says. “Let’s send Facebook a powerful message: Your profits will never be worth promoting hate, bigotry, racism, antisemitism and violence.”
BOSTON DYNAMICS’ SPOT ROBOT DOG IS NOW FOR SALE, BUT IT’LL COST YOU
GITHUB TO REMOVE ‘MASTER’ AND ‘SLAVE’ CODING TERMS SEEN AS RACIALLY INSENSITIVE
Although many of these groups have been in conversation with Facebook for several years, and the company has invested in content moderators and machine learning technology to remove hate speech, the organizations believe it hasn’t done enough to stem the spread of racism, anti-Semitism and bigotry.
The tech giant has faced renewed pressure, including from some of its own employees who staged a virtual walkout, to remove or fact-check posts from President Trump regarding the ongoing protests and riots over racism and police brutality in the U.S. However, CEO Mark Zuckerberg defended the decision in a companywide video conference.
In contrast, Twitter put a label on Trump’s tweets for “glorifying violence.”
Organizers, who are starting with dozens of companies that advertise on Facebook and plan to eventually include hundreds, are hoping that the boycott has the effect of forcing the social network to move quickly.
“We have long seen how Facebook has allowed some of the worst elements of society into our homes and our lives. When this hate spreads online it causes tremendous harm and also becomes permissible offline,” said Jonathan Greenblatt, ADL CEO, in a statement emailed to Fox News.
GERMANY’S CORONAVIRUS TRACING APP WILL LAUNCH THIS WEEK
“Our organizations have tried individually and collectively to push Facebook to make their platforms safer, but they have repeatedly failed to take meaningful action. We hope this campaign finally shows Facebook how much their users and their advertisers want them to make serious changes for the better,” he added.