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Economic Impact
According to the Hong Kong Census and Statistics Department, Hong Kong’s GDP grew by 6.4% in 2021, showing economic resilience. This growth is partly due to the government’s large-scale fiscal stimulus policies. The Financial Secretary of Hong Kong stated that the government introduced economic stimulus plans totaling over HK$300 billion between 2020 and 2021. Despite some large multinational companies like HSBC and Standard Chartered expressing their intention to continue operating in Hong Kong, over 40% of SMEs are considering moving part of their operations to Singapore and other Asia-Pacific countries to avoid potential political risks and uncertainties, according to the South China Morning Post. The International Monetary Fund (IMF) noted in a report that Hong Kong’s status as an international financial center faces challenges and needs to make more efforts in maintaining legal transparency and market freedom.
The real estate market has also been affected. Despite residential property prices in Hong Kong increasing by 3.7% year-on-year in 2021, the rents and prices of commercial properties have declined. A report by Jones Lang LaSalle (JLL) showed that Grade A office rents in Hong Kong dropped by about 10% in 2021, mainly due to reduced demand for office space from some companies. This trend reflects the cautious attitude of enterprises in an uncertain political and economic environment. The recovery of the tourism industry has been slow. According to the Hong Kong Tourism Board, the number of international tourists received in Hong Kong in 2021 was only 352,000, a decrease of more than 90% compared to 5,589,000 in 2019. This sharp decline is not only due to the impact of the pandemic but also related to international concerns about the safety and freedom in Hong Kong. The Hong Kong Special Administrative Region (HKSAR) government has announced a series of measures to promote the recovery of the tourism industry, including providing financial support to travel agencies and tourist attractions and organizing large international events.
The implementation of the National Security Law also has some positive economic effects. A survey by the Hong Kong Chinese Enterprises Association showed that over 60% of the surveyed enterprises believe that the National Security Law has brought a more stable business environment to Hong Kong. A spokesperson for the Chinese Ministry of Foreign Affairs emphasized that the National Security Law helps Hong Kong’s long-term prosperity and stability, and this view has been recognized by some enterprises. The performance of the Hong Kong securities market after the implementation of the National Security Law is also noteworthy. In 2021, the Hang Seng Index rose by 14.7%, and the number of IPOs on the Hong Kong Stock Exchange reached 154, with total fundraising exceeding HK$400 billion, showing confidence in Hong Kong’s economic stability in the capital market. However, the listing plans of some technology companies, such as ByteDance and Alibaba’s spin-off, have been delayed, reflecting market sensitivity to the political environment. According to data from the Hong Kong Monetary Authority, the total assets of Hong Kong’s banking sector reached HK$25.7 trillion in 2021, an increase of 5.1% year-on-year. The non-performing loan ratio in the banking sector also rose from 0.6% in 2020 to 0.9% in 2021. This indicates that some enterprises’ ability to repay debts under economic pressure has weakened, requiring more support and strategy adjustments from the government and financial institutions.
Political Situation
According to data from the Hong Kong government, since the implementation of the National Security Law in July 2020, more than 160 people have been arrested for suspected violations of the law, including pro-democracy politicians, activists, and journalists. The HKSAR government emphasizes that these measures aim to combat acts of secession, subversion, terrorism, and collusion with foreign forces to ensure national security. Since the passage of the “Improving Electoral System (Comprehensive Amendment) Bill” in 2021, the Legislative Council election system has been reformed, with the number of seats increased to 90, of which 40 are elected by the Election Committee, 30 by functional constituencies, and 20 by direct election. According to HK01, the voter turnout rate in the Legislative Council election in December 2021 was 30.2%, the lowest since the handover. Many pro-democracy figures were disqualified or voluntarily withdrew from the election, leading to a decline in the competitiveness of the election. Professor Ma Ngok from the Department of Government and Public Administration at the Chinese University of Hong Kong pointed out that the low voter turnout reflects the public’s disappointment with the political environment.
International attention to the political situation in Hong Kong is also increasing. Governments of the United States, the United Kingdom, the European Union, and other countries have expressed concerns about the implementation of the National Security Law and taken a series of measures in response. For example, the U.S. Department of State noted in its 2021 Hong Kong Policy Act Report that the implementation of the National Security Law poses a threat to Hong Kong’s high degree of autonomy and human rights protections. The Chinese government firmly supports the implementation of the National Security Law in Hong Kong. The Director of the Legislative Affairs Commission of the National People’s Congress Standing Committee stated that the National Security Law effectively maintains Hong Kong’s social stability and the rule of law, serving as an important guarantee for the steady and long-term implementation of “one country, two systems.” The Chinese government has also implemented multiple policy measures to support Hong Kong’s economic development and livelihood improvement, such as providing more convenience for Hong Kong enterprises and residents in the Guangdong-Hong Kong-Macao Greater Bay Area. The media environment has also changed due to the National Security Law. According to Ming Pao, since the implementation of the National Security Law, several independent media outlets have closed or been forced to cease operations, including Apple Daily and Stand News. The Hong Kong Journalists Association pointed out that the operating environment for media and press freedom is under unprecedented pressure. The HKSAR government’s Information Services Department stated that press freedom in Hong Kong is protected by the Basic Law and the Hong Kong Bill of Rights Ordinance, and media must fulfill their social responsibilities in accordance with the law.
Social Changes
These changes are evident in multiple aspects, from civil society activities to personal freedoms and social atmosphere. According to a survey by the Hong Kong Public Opinion Research Institute, about 60% of respondents expressed concerns about freedom of expression after the implementation of the National Security Law, up 20 percentage points from 2019, reflecting societal concerns and anxiety about freedom of speech. The Hong Kong government emphasizes that the National Security Law aims to safeguard national security and will not affect citizens’ legitimate rights and freedoms. According to HK01, more than 30 non-governmental organizations (NGOs) have disbanded or relocated from Hong Kong since the implementation of the National Security Law, including well-known pro-democracy and human rights organizations such as the Civil Human Rights Front and the Hong Kong Alliance in Support of Patriotic Democratic Movements of China. The government stated that the disbandment of these organizations was their own decision, but observers noted that changes in the legal environment undoubtedly impacted their operations. According to data from the Hong Kong Education Bureau, over 1,000 teachers were investigated for inappropriate remarks or behavior in 2021, with about 100 of them being disqualified. This move is seen as the government strengthening supervision in the education sector to ensure the implementation of the National Security Law. Meanwhile, multiple universities in Hong Kong have added national security education content to their curricula, including adjustments to law courses and history courses.
According to data from the Hong Kong University Public Opinion Programme, over 40% of respondents believed that the social atmosphere had become more cautious in 2021, up 15 percentage points from 2019. According to a survey by the South China Morning Post, about 15% of respondents expressed intentions to emigrate in 2021, up 10 percentage points from 2019. The main emigration destinations include the United Kingdom, Canada, and Australia. Data from the British government shows that since the introduction of the “British National (Overseas) Visa” scheme in 2021, over 100,000 Hong Kong residents have applied for this visa, reflecting the reality of the emigration wave. According to the Hong Kong Economic Times, dozens of citizens have been arrested for allegedly illegal remarks on social media since the implementation of the National Security Law. Despite the many challenges brought by social changes, there are also some positive changes. According to data from the Hong Kong Census and Statistics Department, the crime rate in Hong Kong decreased by 7.5% in 2021, with violent crime dropping by 10.2%. The police stated that this trend is related to the implementation of the National Security Law and the overall stability of the social environment. Meanwhile, the spirit of mutual aid within the community has been strengthened, with multiple community organizations distributing anti-epidemic supplies and supporting residents, showcasing the positive side of society.
Judicial Changes
According to data from the Hong Kong Judiciary, over 70 related cases have entered judicial proceedings since the implementation of the National Security Law. These cases mainly involve acts of subversion, secession, terrorism, and collusion with foreign forces. In terms of legal application, the National Security Law has significantly supplemented Hong Kong’s legal system. According to Article 23 of the Basic Law, the Hong Kong Special Administrative Region has the responsibility to enact laws on its own to safeguard national security, and the implementation of the National Security Law fills this legal gap. The legal community generally believes that the National Security Law introduces new judicial interpretations and legal concepts to Hong Kong’s legal system, allowing judicial bodies to have legal grounds when handling cases involving national security.
Judicial independence has been a major concern in the process of case trials. According to the Hong Kong Economic Times, cases related to the National Security Law are usually handled by specially designated judges appointed by the Chief Executive of the HKSAR to ensure that the trials comply with the requirements of the National Security Law. Some legal professionals have expressed concerns, believing that the appointment of special judges may affect judicial independence. However, the Department of Justice of Hong Kong emphasized that all judicial appointments and procedures comply with the provisions of the Basic Law, and judicial independence is fully guaranteed.
Since the implementation of the National Security Law, over 60% of defendants have not been granted bail during the trial period, significantly higher than ordinary criminal cases. The Department of Justice stated that this measure is to prevent defendants from absconding and interfering with judicial proceedings, ensuring fair and just trials. Judicial training and education have also been strengthened. According to data from the Hong Kong Law School, since the implementation of the National Security Law, the Hong Kong judiciary has conducted multiple specialized training sessions, covering the legislative background, legal interpretation, and case handling procedures of the National Security Law. International reactions to Hong Kong’s judicial changes have been mixed. The U.S. Department of State noted in its annual human rights report that the implementation of the National Security Law poses a challenge to Hong Kong’s judicial independence and called on the Hong Kong government to ensure the independence and transparency of the judicial system. The European Commission expressed similar concerns in its report. According to data from the Hong Kong Bar Association, the number of legal aid applications increased by about 15% in 2021, with the proportion of cases involving the National Security Law rising.
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