The Hong Kong government’s recent decision to restrict access to public records marks a huge blow to journalists and others who want to investigate official wrongdoing.
“The new rules will make it harder for journalists to hold those in power accountable,” said a reporter for a major American newspaper who tracks the wealth of Chinese elites.
“Right now, Hong Kong’s corporate records are some of the most transparent in the world,” he said.
“Reporters can track company directorships for individuals using their Hong Kong ID number,” he said, adding, “They can even get their home addresses.”
“This information is invaluable when documenting the accumulation of wealth by the families of the Communist Party’s elite, who have been parking their money in Hong Kong for decades.”
According to a Hong Kong Legislative Council panel report, the Hong Kong government “now wants to mask the identities of people trading with the privilege of limited liability, incentivizing fraud and corruption.”
“Masks may protect people from infections, but sunshine is the best disinfectant in the Companies Registry,” the report said. “Keep the masks off the HK IDs.”
On March 30, Hong Kong’s Chief Executive Carrie Lam said that the amendments regarding the Companies Registry were designed to protect personal privacy.
And she said that she didn’t see a need to include journalists in the list of individuals allowed to obtain company records.
In a Facebook post, the Hong Kong Journalists Association (HKJA) described the government’s decision as “another blow to Hong Kong’s press freedom.”
But journalists are not the only ones concerned.
Some observers, including business people, believe that the decision will also have a negative economic impact in Hong Kong.
David Webb, who has been described as “Hong Kong’s most activist investor,” said that the government’s proposed changes “will facilitate corruption, fraud, and other crimes.”
Webb runs a free database of publicly available information in Hong Kong and the United Kingdom.
On April 6, Simon Cartledge, former editor-in-chief of the Economist Intelligence Unit, said that “the assault on the city’s long-standing freedoms might be the most visible, but its economy is also suffering.”
“Battered first by anti-government demonstrations, then by COVID-19,” Hong Kong’s economy “has shrunk two successive years,” said Cartledge, who is the author of a book on Hong Kong.
Growth will return this year between 3.5 percent and 5.5 percent, according to Hong Kong’s Financial Secretary Paul Chan.
But the rebound will be subdued, said Cartledge, whose comments were carried on the Nikkei Asia website.
According to Cartledge’s calculations, the Hong Kong economy won’t regain its 2018 size until 2023.
Unemployment, now at 7 percent, will remain high for at least three years, according to Hong Kong’s Labor and Welfare Secretary Law Chi-Kwang.
In an interview with The Wall Street Journal, David Webb, who may be the most articulate critic of the changes announced by Carrie Lam, said that her move will go against an international push for greater transparency.
He added that Hong Kong should drop the paywall on its information, such as New Zealand and the United Kingdom have done.
Also speaking with The Journal, Kenneth Leung, a former legislative councilor who represented the accountancy sector before China disqualified him last year, said that Carrie Lam’s proposed changes are bad news for bankers, lawyers, and other professionals working in the financial industry.
That would include those working on mergers and acquisitions, he said, adding, “It means more money, more delays, and sometimes missing the deal.”
Sweetening Hong Kong for the rich
Hong Kong’s authorities have been offering incentives to the city’s wealthiest citizens in an effort to keep them investing in the city and provide employment to many citizens.
The New York Times recently described this as an attempt to “sweeten Hong Kong for the rich.”
“Even as it strips civil liberties in Hong Kong, China is trying to charm the financial class, aiming to keep bankers and financiers from other business-friendly places like Singapore,” The Times said.
The newspaper reported that Hong Kong has proposed a program called Wealth Management Connect that would give mainland Chinese residents in China’s southern region the ability to invest in Hong Kong-based hedge funds and investment firms.
Pandemic-driven travel restrictions have slowed the program’s momentum, but it remains a top priority, according to King Au, the director of Hong Kong’s Financial Services Development Council.
The Times said that mainland money has already helped Hong Kong look more attractive to investors. New offerings have already raised $16 billion, including $5.4 billion for Kuaishou, which operates a Chinese video app.
The record start was helped in part by Chinese companies that have turned to the Hong Kong market to avoid raising money in the United States amid deteriorating trade and political ties.
Dan Southerland is RFA’s founding Executive Editor.