Summary

  • Britain offers citizenship rights to Hong Kong residents, as it has historically been one of the most important trading partners for the United Kingdom and its gateway to east Asia
  • It also provides unique business advantages to the UK, in extending a deep reach into the Chinese economy
  • China condemns the UK offer, passes a new security law that curbs Hong Kong’s populist moves

The UK has decided to offer residency rights and citizenship to nearly 3 million residents of its former colony Hong Kong. Nearly 350,000 British national overseas passport holders and another 2.6 million for the passport will be able to benefit form this current offer. Signing off a legislation on 30 June in this regard the British Prime Minister said, that the New Chinese Law violates Hong Kong’s autonomy and is in direct conflict with the city’s basic legal rights.

Hong Kong has been one of the most important trading posts for the UK. The Britishers used this post as the gateway to the vast economy of China and also to extend its influence and business interests throughout the east Asia. Even after the World War II ended and many of the important British colonies were able to gain independence, UK did not divulge its control over Hong Kong. In 1997 however, all this changed, and Hong Kong was handed over to China. The administrative cost of maintaining a trading post so far to mainland and diplomatic and military manipulation by China proved to be too much for UK, to be holding control of the city.

On the business side of things however, UK was confident it will have an upper hand in the city and will be able to expand its business interests despite the Chinese administrative control. In this regard the British did sign a deal with the Chinese which gave the citizens of Hong Kong a different set of rules and laws than what was applicable to the rest of China. It is called the ‘One Country Two Systems Principal’ and has been a bone of contention between the Chinese administration and People of Hong Kong for a long time now. Recently after a number of clashes with the police and rioting in the city against the government, China has brought out a new Security Law that curtails many of the special privileges that the people of Hong Kong enjoyed since its takeover by China.

Up to 3 million Hong Kong residents could be offered the UK citizenship

Despite having seceded Hong Kong for twenty-three years, British interest in the city has not diminished. Hong Kong enjoys the same economic status in the east as London Enjoys in the west. The city is christened amongst the top ten largest importers and exporters globally and is ranked sixth in the Global Financial Centre Index and in Asia it is ranked fourth after Tokyo, Shanghai, and Singapore. Being a highly developed territory, it ranks fourth in the UN Human Development Index, boasts of one of the largest number of skyscrapers in the world, and is also home to the second highest number of billionaires in the world. The financial and economic influence of Hong Kong, thus, on east and south east Asia is immense and is a major contributor to the UK’s overall economic influence internationally.

The threat that UK faces with the new security law is that, its sphere of influence over the Honk Kong people and its financial and economic prowess will diminish, which in turn will significantly diminish UK’s global economic power. The current British Government’s offer thus to offer citizenship to as many as 3 million citizens of Hong Kong is directed towards protecting this above-mentioned interest.

The Chinese threat of retaliation and its impact on British business interests

The Chinese government has condemned the UK’s offer of citizenship to the Hong Kongers, and has said that HK is a semi-autonomous Chinese territory and Britain can’t intervene there, adding that all the countrymen residing in HK are Chinese.

China is also aware of the importance of Hong Kong and its influence on the economy of South and South east Asia. Ever since it took over the city, it has been trying to increase its influence on Honk Kong’s businesses and its wealthy inhabitants. Two of Britain’s top banks HSBC, and Standard Chartered Bank have a strong presence in Hong Kong and also have a deep reach into the mainland Chinese territories. The large Chinese domestic economy is a very attractive market for banks and financial institutions across the world, however, Chinese laws make it very difficult for them to access its markets. Hong Kong’s special political status and historical business relationships with Chinese traders give it an advantage to do business inside China, which companies from neighboring countries like Japan and south Korea find difficult to access.

A probable impact: China and its authoritative government might cease the properties and freeze all businesses of Hong Kong citizens who are loyal to United Kingdom. They may also roll back or restrict the special status of British financial institutions operating in mainland china, which would result in significant revenue losses to these companies. Any of these measures could lead to an economic disaster to businesses in Hong Kong as well as in the UK.

Other than that, British companies have also made significant investments in China to take advantage of its inexpensive manufacturing base and source components and other intermediate products. A worsening of diplomatic relationship with China could severely undermine the fortune of these companies.

Conclusion

Hong Kong is a very attractive economic powerhouse for any country to have in its fold. The highly enterprising individuals of Hong Kong have contributed significantly to the British economy. By offering them citizenship, UK is not only rewarding them for their contribution but also ensuring their continued loyalty. On the other hand, during the past few decades, China has worked very hard to expand its economy and increase its global influence. The vast resource and financial muscle of Hong Kong is a very effective tool for China to further its global ambitions. The democratic protests in Hong Kong have been undermining the Chinese authority over the city and is an impediment in the country’s efforts to fully integrate it within its folds. The current Chinese security law will tighten the country’s grip over the city and would undermine UK’s influence over it.

 

 


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