Treating Hong Kong as Mainland China: Legal, Digital, and Compliance Risks for Multinationals
Joshua Wong, a prominent Hong Kong democracy activist, is reportedly scheduled to be sentenced in September for violating the 2020 Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (HKSAR), also known as the National Security Law (NSL). Wong is charged with asking foreign governments, organizations, or individuals outside China to impose sanctions, blockades, or engage in hostile actions against Hong Kong and China. If convicted, Wong is likely to be sentenced to a lengthy prison term, possibly life imprisonment if the court decides that Wong’s actions were “of a grave nature.”[1]
Wong’s case exemplifies the ongoing and rapid deterioration of the situation in Hong Kong, which was once a global financial hub that was home to a pluralist civil society, all underpinned by the rule of law and a commitment to maintaining the region’s autonomy. However, Beijing has steadily increased its direct interference in the affairs of the HKSAR, essentially mandating that Hong Kong complies fully with Beijing’s political and national security interests and align completely with Mainland China’s system of rule by law.
Now is the time for multinationals to evaluate their Hong Kong footprints. Such evaluation can begin with a re-assessment of Hong Kong’s role in a firm’s supply chain, talent management, and market entry strategies. It should also include a review of existing data security protocols. In addition, MNCs with Hong Kong exposure should update their compliance programs to consider Mainland China’s national security interests.
Digital Boundary Blurred
A recent example of the erosion of the boundary between Mainland China and Hong Kong is the Implementation Rules for Article 43 of the NSL, which took effect in March. According to the new regulations, all travelers arriving in or transiting through Hong Kong are required to provide passwords or means of decryption for electronic devices, if requested by Hong Kong authorities.[2] The new regulations also grant local authorities the power to retain devices and “specified evidence” found, encompassing all data physically stored on the device as well as data remotely accessible through the device.[3] The rules do not grant any exemptions; failure to comply can result in a fine of up to HKD 100,000 (approximately USD 12,770) and imprisonment for up to one year.[4]
With the new rules, Hong Kong’s digital border controls now mirror those Mainland China, with data sovereignty treated as a matter of national security rather than as a matter of commercial interests or personal privacy.
Long-term Erosion of Autonomy
Since China took over Hong Kong in 1997, Beijing has steadily expanded its control over the HKSAR. Beijing’s activities contradict the intent of the Basic Law (the HKSAR’s “mini-Constitution”), which guarantees Hong Kong’s autonomy vis-à-vis Mainland China and preserves the rights and liberties of its residents. Hong Kong residents have responded with protests, including two major ones in 2014 and 2019. The latter saw up to 2 million protesters in the streets (over one quarter of Hong Kong’s population) of the HKSAR.[5]
Under Beijing’s direction, Hong Kong authorities reacted to the 2019 protest by arresting over 10,000 individuals.[6] One year later, the PRC central government doubled down by passing the NSL in 2020, directly superseding Hong Kong laws and effectively making it impossible for the Basic Law to function as intended. The NSL also created the Office for Safeguarding National Security (OSNS), which is staffed by security officers from Mainland China and answerable only to the central government in Beijing.[7]
In March 2024, the situation in Hong Kong worsened when its legislature passed the Safeguarding National Security Ordinance (SNSO), at the behest of the PRC central government. In doing so, the HKSAR implemented Article 23 of the Basic Law, which stipulates that the HKSAR government shall enact a national security law.[8] [9]
The cumulative effect of these measures is the erosion of Hong Kong’s autonomy and legal system, dramatically altering the operating environment for the multinational corporations (MNC) that made Hong Kong their global centers of operation.
The Joshua Wong case and the cascading legislative measures are another confirmation that Hong Kong’s historic role as an autonomous, rule-of-law-based global hub has effectively ended. The region is now integrated into China’s national security framework, where state interests routinely override legal safeguards, data privacy, and commercial neutrality. In short, the erosion of judicial independence, combined with intrusive digital border controls, means that Hong Kong can no longer be treated as a neutral or legally distinct jurisdiction for international business.
[1] https://apnews.com/article/joshua-wong-national-security-law-plea-cf5d3c4e3269cee3c14ed7c34baf4a39
[2] https://www.elegislation.gov.hk/hk/2026/ln27!en
[3] https://www.elegislation.gov.hk/hk/2026/ln27!en
[4] https://www.elegislation.gov.hk/hk/2026/ln27!en
[5] https://www.theguardian.com/world/2019/aug/18/hong-kong-huge-rally-china-condemns-us-gross-interference
[6] https://hongkongfp.com/2024/06/09/5-years-after-first-2019-protest-arrests-over-7300-arrestees-72-of-total-have-yet-to-see-day-in-court/
[7] https://www.osac.gov/Content/Report/77b1dc96-82d6-497f-9836-1c4f67baa024
[8] https://www.elegislation.gov.hk/hk/2024/6!en
[9] https://www.hrw.org/news/2024/03/19/hong-kong-new-security-law-full-scale-assault-rights
