A former senior banking official fears that rising political pressure from China could force financial institutions in Hong Kong to tow Beijing’s economic line.
Law Ka-chung, the former Hong Kong chief economist of Chinese state-owned lender, the Bank of Communications (BoCom), claimed that central government was tightening its grip on employees in the financial sector.
“In the past, I could make any comment about the markets and economy as long as I was based on figures and facts. But the room is getting smaller and smaller now,” Law, who was forced to resign from BoCom in October, told the RTHK radio program on Thursday.
Law explained that he had been asked to take Beijing’s side when commenting on the trade dispute between China and the United States and avoid saying that China was experiencing more negative consequences than the US.
He said he was accused of being “politically incorrect” for saying that the negative impact of anti-extradition protests on the Hong Kong economy this year was less than that caused by SARS (severe acute respiratory syndrome) in 2003. He made the comment based on the fact that many business professionals had been not affected by protests, he said.
Law believes many other economists in Hong Kong were facing similar pressure and had to think twice before making any economic comments related to political issues.
The sudden increase in overnight interbank rates during certain days this summer had signaled an outflow of capital from Hong Kong, he said. However, he added that an economist who was senior enough to represent a bank claimed there was no outflow of capital as the “average” overnight interbank rate over the past year had remained stable.
“It’s not a lie but it’s definitely not the truth,” Law said. If a bank gives an untrue statement to its client, it is cheating, he said, adding that such bad practice has recently been adopted by some Hong Kong and foreign banks that do not want to offend mainland Chinese business partners.
Hong Kong’s status as an international financial hub would erode, he said, if economists could not comment freely.
Born and raised in Hong Kong, Law had served at the Hong Kong unit of BoCom, China’s fifth-largest bank, for 14 years. He resigned in October as the bank did not think it was appropriate for a Hong Kong person to speak on behalf of a Chinese bank. Over the past decade, he was the public face of the bank, providing market opinion for the media.
In a recent interview, Law told the Financial Times that his departure was partly due to the deep divisions that have formed at the bank between mainland and local staff since the start of the anti-extradition protests. A spokeswoman from BoCom declined to comment.
On Thursday he said he had previously been able to comment freely while working at BoCom. But he was challenged by the company when he emailed a Hong Kong Economic Journal Monthly article criticizing Chief Executive Carrie Lam and the central government.
Law said he had been doing similar things for a long time but had never been criticized. He suspected Beijing had increased monitoring of adverse comments from employees in state-owned companies.
“Only people with a ‘deep blue’ mindset can now survive in Chinese firms,” said Law, referring to the “blue ribbons” attributed to those with pro-Beijing or pro-establishment views.
He said Hong Kong staff in Chinese firms would have to self-censor in meetings to avoid being labeled politically incorrect.
However, Holden Chow Ho-ding, vice-chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, said in a separate interview that Law’s resignation was probably just a commercial decision or could involve personal matters.
He said the case should not be described as a trend that Hong Kong staff were disliked by Chinese firms. He added that if Law gave public comments different from the official line at BoCom, the audience might be confused.
Law said economists at a bank usually focused on different regions and would not overlap.