Long love affair with Hong Kong hits rocks

Australian Trade Minister Simon Birmingham. Picture: AAP

Just over a year ago in Sydney, ­federal Trade Minister Simon ­Birmingham cheerfully signed a free-trade agreement with Hong Kong’s Secretary for Commerce and Economic Development, ­Edward Yau.

It was a high-water mark of recent ties between Australia and Hong Kong, a city with more than 100,000 Australian passport holders and a thriving entrepot for many major Australian companies which see the city as a gateway for doing business with China and an attractive base for business ties with Asia.

“Hong Kong is Australia’s leading business base in Asia, reflecting the unique advantages of the ‘one country, two systems’ framework, with Hong Kong enjoying a high degree of autonomy,” Australia’s Consul-General to Hong Kong, Michaela Browning, said in welcoming last year’s FTA.

Fast forward to July 2020 and the situation has turned on its head.

Australia is warning its citizens they could face arbitrary arrest in Hong Kong following the introduction of tough new security laws. It has also temporarily suspending its extradition treaty with Hong Kong and is offering much easier visa options for skilled ­migrants from the city.

Strong ties remain between Australia and Hong Kong, which is home to some 120,000 alumni of Australian universities and hosts the largest offshore Australian Chamber of Commerce. The city is the sixth-largest destination for Australian merchandise exports and the fifth-largest foreign investor in Australia.

While Hong Kong remains a regional hub for a wide range of Australian companies including ANZ, Commonwealth Bank, National Australia Bank, Macquarie Group, Telstra and Australian law firms — plus thousands of Australian expats — once unthinkable tensions between Australia and the government of Hong Kong have arisen as China tightens its grip on the city.

There is grassroots sympathy in Australia for Hong Kong protesters, but foreign businesses operating in the city, including Australian businesses, have grown weary of ongoing protests, continued uncertainty, the impact of the COVID-19 virus and increasingly bitter divisions within Hong Kong society over its ties with China and the new security laws.

While Australian political ties with China continued to deteriorate, Hong Kong was the haven for Australian expats who could reap the commercial benefits of doing business with China while enjoying the benefits of a fast-paced, East-meets-West lifestyle. The city has a long tradition of accommodating expats in its lively bars and restaurants, especially during the annual Hong Kong Sevens rugby tournament.

But that is all changing as China responds to more than a year of protests and disruption, strengthening its influence over the city which was supposed to ­operate in a quasi-independent ­capacity until 2047.

Australia’s once rock solid relationship with Hong Kong, as opposed to China, is coming under strain as Hong Kong is drawn, step by step, under the influence of ­Beijing.

Australia’s move on Thursday to suspend its extradition treaty with Hong Kong following the new China-driven security laws is not unique.

It follows similar moves by Canada and the US, while Britain is considering its position.

Australia, whose citizens stayed on in the city while many British went home after the 1997 handover, has always had its own special relationship with Hong Kong.

But that is changing.

Scott Morrison’s announcements are an implicit reflection of views that the government of Hong Kong Chief Executive Carrie Lam no longer runs a city independent of the control of Beijing.

Australians have had a long love affair with Hong Kong but for those caught in the middle, life is set to get tougher as Canberra squares off with both Beijing and Hong Kong.