- Legislation heightens concerns of political and legal risk in Asian financial centre
Hong Kong’s wealthy are moving increasing amounts of their gold out of the financial hub after Beijing imposed a new national security law on the city last month, dealers in the precious metal say.
Private sector investors have shifted about 10 per cent of their physical gold from the territory to countries such as Singapore and Switzerland over the past 12 months, according to Joshua Rotbart, head of J Rotbart & Co, a Hong Kong-based gold dealer and storage provider.
The trend started last year during anti-government protests in the city and has picked up with the passing of the security law, as investors fret about political uncertainty and the rule of law.
“Many clients now perceive Hong Kong as riskier than other jurisdictions,” Mr Rotbart said. After the national security law was passed, he could “see an immediate response from Hong Kong residents . . . asking to store it [gold] somewhere else”.
Pro-government politicians argue the security law, which targets terrorism, subversion, secessionism and foreign influence, was needed to stamp out the protests and restore stability.
But critics are concerned the measures undermine the legal and political autonomy promised to Hong Kong for 50 years after its handover from the UK to Chinese sovereignty in 1997. The legislation allows Beijing to try suspects in mainland China in special cases, which lawyers argue undermines the legal firewall between the two jurisdictions.