The Hong Kong Situation


Short Summary

Hong Kong, one of the four ‘Asian Tigers’, is home to many branches of international law firms. The expansion into the Hong Kong market aimed to better serve Asian clients, taking advantage of the free economy and low tax regime.

The agreement of handing over of the British colony to the People’s Republic of China took effect in 1997. The Joint Declaration established the “one country, two systems” formula, which enabled Hong Kong to continue its capitalist economic system and partially democratic political system for 50 years after the handover.

The Joint Declaration served as the first hurdle for businesses to tackle, as there is a clear deadline on Hong Kong’s freedom. Predicting the country’s future has been made even more difficult by China’s imposition of restrictive laws. These laws aim to limit Hong Kong’s political autonomy, suppress freedom of speech and assembly and restrict any attempts of maintaining the region’s freedom.

The lack of autonomy led the U.S. to start revoking Hong Kong’s special treatment status. This is because the Trump administration does not recognise Hong Kong to be autonomous from China any longer.

Legal and Commercial Implications

The instability and uncertainty in the region makes it less attractive to investors. This may push businesses to exit Hong Kong by moving their Head Quarters to other regions, which will lead to a decrease in the number of transactions being conducted. This will ultimately diminish the demand for legal services, although law firms will be asked to help navigate businesses through the new legal landscape.

Further, the Joint Declaration between the U.K. and the PRC can be argued to have been breached through China’s interventions, possibly giving rise to international law disputes. Moreover, international law issues include the restriction on the autonomy of the country, as well as the laws going against democratic principles recognised and supported by the international community.

Questions for Individual Thinking

The questions lawyers should ask themselves are:

  1. Is Hong Kong free and autonomous?

  2. How will businesses be affected by China’s involvement in the region?

  3. How will law firms react if Hong Kong continues to be restricted?

Malcolm Zoppi

Born in Switzerland, grew up in the Bahamas, studying in England, completed an Erasmus year in Denmark, and now living in Spain.

Malcolm prides himself on his internationality and ability to analyse current affairs from different perspectives.

👨‍💻Want to share feedback? Did we miss something important? Let us know! We would love to hear from you at or simply just comment below!

37 views0 comments

Recent Posts

See All