Hong Kong was a ‘secure harbor’ for tech corporations shut out of China. Not anymore

Hong Kong was a 'safe harbor' for tech companies shut out of China. Not anymore

But a new law that offers Hong Kong authorities sweeping powers to manage on-line content material might put these corporations on a collision course with that censorship mechanism, often called the Great Firewall — and probably drive them out of Hong Kong altogether.
Under the national security law that went into impact final week, Hong Kong police can demand that on-line platforms and community suppliers take down content material deemed a risk to China’s safety or prohibit entry to their companies. If they fail to take action, firm representatives might face almost $13,000 in fines and 6 months in jail.

That has large implications for tech corporations that use the town as a regional base because of its relative openness and proximity to China and the Asia Pacific area, even when its roughly 7 million residents do not make up a good portion of their customers.

“It is not a huge market, but is important symbolically,” stated Adam Segal, director of the digital and our on-line world coverage program on the Council on Foreign Relations.

Caught within the center

Companies are already reacting. Facebook (FB), Twitter (TWTR), Google (GOOGL) and Microsoft (MSFT) have been amongst these declaring this week that they’d temporarily stop honoring government data requests about their Hong Kong customers, whereas TikTok — owned by Chinese firm ByteDance — determined to shut down its platform there utterly.

“Firms would be worried by the impact it has on their users, staff, and executives — as well as global concerns that they would be actively facilitating human rights abuse happening under that framework,” stated Raman Jit Singh Chima, Asia coverage director at know-how advocacy group Access Now. Chima and different specialists say corporations are more likely to wait and see how far China will go in its crackdown on Hong Kong’s web, however exits from the town stay a risk.

“They may wait to see if the government makes a request, but then they will be forced to decide, and leaving is likely,” Segal stated.

The vaguely worded legislation additionally has a provision that states it could additionally apply to offenses from exterior the area “by a person who is not a permanent resident,” probably giving China the power to take motion in opposition to any publish in opposition to Hong Kong on any platform, anyplace.

“I think that is meant to have a general chilling effect on people everywhere, not just not particularly high tech companies,” stated Scott Kennedy, an professional on China’s financial coverage on the Center for Strategic and International Studies.

And whereas that might result in a level of self-censorship abroad, Kennedy says there are questions on China’s skill to truly implement its guidelines on tech platforms exterior its personal territory.

“That’s something that’s a vast overreach by the Chinese, and I think they’d generate more pushback,” he added.

Facebook, Twitter and Microsoft stated they are going to proceed to look at the legislation and its implications on their companies.

“Our teams are reviewing the law to assess its implications, particularly as some of the terms of the law are vague and without clear definition,” a Twitter spokesperson stated in a press release.

A Facebook spokesperson stated the corporate would conduct a “further assessment” of the legislation in session with human rights specialists. “We believe freedom of expression is a fundamental human right and support the right of people to express themselves without fear for their safety or other repercussions,” the spokesperson added.

“As we would with any new legislation, we are reviewing the new law to understand its implications,” a Microsoft spokesperson stated in a press release.

Google, which additionally has operations and customers in Hong Kong, didn’t reply to requests for remark.

Facebook, Google and Twitter won't give Hong Kong authorities user data for now
While these three corporations are largely lower off from mainland China, the legislation might even have implications for companies, resembling Apple (AAPL) and Microsoft, which have much more at stake, in keeping with Steven Feldstein, a nonresident fellow on the Carnegie Endowment for International Peace. Both corporations have giant manufacturing bases for his or her {hardware} merchandise in China, which can also be one of many world’s greatest markets for iPhones.

“These companies, particularly Apple, are really interesting because they have a lot more to lose, particularly given the amount of hardware that they sell in terms of iPhones as well as their manufacturing,” Feldstein stated. “I don’t know exactly where they’re going to end up … short of a lot of public pressure, it’s easy to conceive of a scenario where they try to also muddle their way through.”

Apple has discovered itself caught between China and Hong Kong prior to now, most just lately final October when it removed a mapping app from its App Store that the town’s pro-democracy protesters have been utilizing to trace police actions.
The firm didn’t instantly reply to a request for touch upon Thursday, however stated in a press release to Bloomberg earlier this week that it was “assessing” the legislation.

Safe harbor

Hong Kong’s web freedom is a product of a 1997 settlement between China and Britain, which handed the territory again to the Chinese authorities below a precept often called “one country, two systems” whereby the town would “safeguard the rights and freedoms of its residents” for a interval of 50 years. But Beijing has been tightening its grip on these rights and freedoms for a number of years, and lots of worry the nationwide safety legislation is one other large step in that course. Several international locations together with the US, UK and Australia have criticized the legislation, with some warning their citizens in opposition to visiting Hong Kong due to it.

“It’s clear that the Chinese didn’t want to pass it simply to create the illusion that they controlled Hong Kong,” stated Kennedy. “They really want to control Hong Kong and change the facts on the ground.”

Being blocked from China hasn’t stopped Facebook and Google from trying to make inroads, with Facebook CEO Mark Zuckerberg’s repeated charm offensive trips to Beijing in recent times prompting criticism. Google was pressured to stroll again plans to build a version of its search engine in China in 2018 after widespread outrage over what was seen as aiding Chinese censorship.
Hong Kong's security law could have a chilling effect on press freedom
Many tech companies might now be eying an exit, with analysts pointing to Singapore as one of many prime options if they’re pressured to depart Hong Kong. Many tech companies have already got a presence in Singapore, although the Southeast Asian nation has its own issues with free speech.

“If [Hong Kong is] a regional hub for you, or you’re there specifically because of the safe harbor it provides due to rule of law … it’s a challenge for you,” Kennedy stated. “I wouldn’t be surprised If every single [US company in Hong Kong] is considering their options about location, and the same for all of their employees.”

In the meantime, Hong Kong is getting a style — if not the total affect simply but — of life throughout the Great Firewall, and corporations might be on their guard.

“Even Hong Kong lawyers are unable to provide clear advice or guidelines on what would amount to an offense — the provisions are so broadly crafted that they are capable of capturing even benign conduct such as slogans,” stated Sharron Fast, deputy director of the journalism graduate program on the University of Hong Kong.

“Censorship is coming,” she added, “and if the breathtaking pace at which we have seen implementation … is any indication, it will happen sooner rather than later.”

Source’s Sherisse Pham, Eric Cheung and Isaac Yee contributed to this report.

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