Hong Kong’s Continuing Role as a Center of Capital Flight and Other Financial Crimes

Sept. 10, 2019 (EIRNS)—Ever wonder what’s really behind the protests against the proposed new extradition law in Hong Kong, which was the trigger of the ongoing violent attempted color revolution in the former British Crown Colony?

It turns out that way before the so-called “peaceful youth protests” began in Hong Kong, the financial community was up in arms over the proposed extradition law, since it threatened to pull the plug on their ongoing criminal activities in Hong Kong. An Aug. 19 article by Kevin Zeese and Margaret Flowers in Consortium News (first published Aug. 18 in their PopularResistance.org website) has useful background on this matter.

“Hong Kong is a center for big finance and also a center of financial crimes. Between 2013 and 2017, the number of suspicious transactions reported to law enforcement agencies rocketed from 32,907 to 92,115. There has been a small number of prosecutions, which dropped from a high of 167 in 2014 to 103 in 2017. Convictions dropped to only one person sentenced to more than six years behind bars in 2017.... The proposed [extradition] law covered 46 types of crimes that are recognized as serious offenses across the globe. These include murder, rape, and sexual offenses, assaults, kidnapping, immigration violations, and drug offenses as well as property offenses like robbery, burglary and arson and other traditional criminal offenses. It also included business and financial crimes.”

Zeese and Flowers continue:

“Months before the street protests, the business community expressed opposition to the law. Hong Kong’s two pro-business parties urged the government to exempt white-collar crimes from the list of offenses covered by any future extradition agreement. There was escalating pressure from the city’s business heavyweights. The American Chamber of Commerce, AmCham, a 50-year-old organization that represents over 1,200 U.S. companies doing business in Hong Kong, opposed the proposal. AmCham said it would damage the city’s reputation: ‘Any change in extradition arrangements that substantially expands the possibility of arrest and rendition ... of international business executives residing in or transiting through Hong Kong as a result of allegations of economic crime made by the mainland government ... would undermine perceptions of Hong Kong as a safe and secure haven for international business operations.’…

“Indeed, the Center for International Private Enterprise, an arm of the National Endowment for Democracy, said the proposed law would undermine economic freedom, cause capital flight and threaten Hong Kong’s status as a hub for global commerce.”

But, despite NED’s threat that Hong Kong’s economy would suffer from the law, it already has suffered gravely without it: Its GDP collapsed from a high of 27% in 1993 to less than 3% in 2017. What has grown is poverty, now standing at 20%, while the World Bank registered the mainland’s poverty rate at 0.7% in 2015.