HONG KONG — China’s desire to take a stronger hand in running Hong Kong has imperiled its status as Asia’s financial capital, sending its stock market into its sharpest plunge in five years and spurring predictions that money and business could soon leave the former British colony.
The threat does not come just from Beijing, which late on Thursday outlined its plan to bypass Hong Kong leaders and enact national security laws affecting the territory of roughly seven million people. That move puts Hong Kong squarely in the middle of the growing conflict between China and the United States, which is increasingly challenging Beijing on a number of fronts and could retaliate in ways that hobble its appeal as a place to do business.
Businesses and investors worry that a bruising clash between the superpowers could put an end to Hong Kong’s enviable position as a bridge between China’s powerful economic engine and the rest of the world.
“No matter what, they need to maintain Hong Kong’s unique status,” said Fred Hu, a prominent investor and the former chairman of Goldman Sachs’s Greater China business. His investment firm, Primavera Capital Group, has put billions of dollars in investments into China over the years.
“It’s not only crucial for Hong Kong’s future, but also really for China as a whole, in today’s highly uncertain and volatile political climate,” he added.