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How China's Growing Influence On Hong Kong Could Shape Financial Markets

SARAH MCCAMMON, HOST:

This week, Apple Daily, an independent pro-democracy newspaper in Hong Kong, was forced to shut its doors. That's because its accounts were frozen and top editors were arrested under a Chinese national security law that many believe targets pro-democracy ideas. It's the latest and most high-profile example of China's tightening grip on Hong Kong, a city that's long had independence from Beijing. It's also home to one of the busiest financial markets in the world. So what is China's long game for an area that has enjoyed and apparently benefited from relative independence from Beijing? Joining me now to talk about this is Primrose Riordan. She's a correspondent for the Financial Times based in Hong Kong. Welcome. Thanks for joining us.

PRIMROSE RIORDAN: Thank you so much for having me.

MCCAMMON: There have been reports of long lines to purchase Apple Daily's final print edition. Can you tell us what the atmosphere is like there right now? What have people been saying about the Apple Daily shutting down?

RIORDAN: Yeah, it was quite an emotional day on this day which was, the day, as you mentioned, where it was their last edition. So we did have these long, long lines throughout the city. I was in central (ph) on the day that it was the final edition. And, you know, there was just this snaking line of businesspeople. I mean, I guess most of them were on the younger side, but there was still older people there as well. And once they bought their paper, I was just chatting to some of them. And they got quite attached to the paper during the 2019 pro-democracy protests, which I'm sure some of your listeners would have remembered really took over the city.

Since the national security law has been in place, there hasn't been any street protests. So for a lot of these people, this was sort of the only way where they could really demonstrate their discontent. People are still getting on with everyday life, of course, and money's still going through the city like nothing else. But, you know, there's still this feeling that, yeah, frustration and support for the movement that we're still seeing.

MCCAMMON: Hong Kong is, of course, one of the busiest financial centers in the world. How does China's tighter grip on Hong Kong shape things like trade and commerce? And how is that affecting the business community there?

RIORDAN: Yes. So this is a really interesting question. I guess what we're seeing is that after the pandemic, China really led the way in terms of the economic recovery. So every kind of Western bank or fund or any sort of big financial houses very much wanted to be part of that whole wave that we saw as a result of the pandemic, especially considering that China's economic recovery has been so speedy, I guess. So all of them were already based in the city, still want to stay here because of that promise of the returns of that market.

So I guess there's a sense of this sort of separation within the city where you've got, on the one hand, this sort of absolute moneymaking going on. It's just irresistible for so many of these financial houses, which is keeping people here and all that sort of thing. And then on the other hand, you have this quite tough and rapid a crackdown on the activists and the politicians and academics even and obviously the media. So, I mean, I guess the question is is whether or not you can have this sort of still a successful and vibrant financial hub without that sense of free flow of information. And, you know, I mean, that's the question that is yet to be answered, I guess.

MCCAMMON: Is the business community responding specifically to the shutdown of the Apple Daily?

RIORDAN: No, I mean, absolutely not. I mean, already business is very much conscious about what they say about China already. And I would be very, very surprised if any big business that plan to still make money in Hong Kong and China would criticize that move at all. I mean, essentially, business has already being very, very careful about what they say about China, considering the backlash that they see if they say anything that, you know, would offend the Chinese government.

MCCAMMON: Primrose, you've been covering this region for a long time. What would you say is Beijing's ultimate goal when it comes to Hong Kong? I mean, what's the long game here?

RIORDAN: Yeah, so that's a really good question. I mean, I don't think we know exactly what the end goal is, but I think that the crackdown offers quite a lot of clues to what the end game is. Because the crackdown is so wholesale, you know, massive changes to the education system, for example. I mean, you've got a new national security curriculum being introduced, a subject which was called liberal studies. It's now being totally rewritten to be more patriotic. Essentially, we don't really know what will be the final product, but definitely it is the case that China itself doesn't want to have to worry about this small city of 7.6 million people. It has so many people it needs to worry about and so many other cities it needs to worry about. It doesn't want to have to continue to, you know, from their perspective, be bothered by these constant outbreaks, especially considering how serious it got for Beijing when you had, you know, 2 million people out on the streets protesting the government during 2019.

MCCAMMON: Forgive me if this is a naive question, but why is that so important from the Chinese perspective? I mean, why not let Hong Kong just sort of do what it wants to do?

RIORDAN: Well, Hong Kong is part of China, so it is a Chinese city from their point of view. And it doesn't want to have a part of the country which is opposing the country, I guess. And at the same time as well, you know, the other thing that they're worried about is any sort of leakage or any sort of contagion of some of these ideas that were brewing in Hong Kong to the mainland. You know, that's a really big concern as well. Arguably, on the other hand, there's also people here in the establishment that oppose Beijing but still want Hong Kong to remain separate because they believe that it also allows China to have that engagement with the rest of the world.

And, you know, that's definitely been a long-term attraction for Hong Kong in that it's been able to have these Western companies which are happy to be here and happy to have their base here and all the rest because it has those international structures. So it is a real question now because it's hard to call it an experiment, but it is a question about whether or not you can have a financial center without those freedoms and without those sort of, you know, things that made Hong Kong different from the rest of China and made it much more autonomous place than it will be after these changes that are undergoing that the city is sort of seeing at the moment.

MCCAMMON: That's Primrose Riordan, Financial Times correspondent based in Hong Kong. Thanks so much for sharing your reporting with us.

RIORDAN: Thank you so much for having me. Transcript provided by NPR, Copyright NPR.