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What does Hong Kong’s security law mean for global businesses?

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A new security law for Hong Kong, approved by China’s parliament last Thursday, “will only punish a small minority” of criminals and poses no threat to foreign businesses or Hong Kong’s stature as a global financial hub.

That was the message from Hong Kong chief executive Carrie Lam following her whirlwind trip to Beijing on Wednesday to meet with Chinese vice premier Han Zheng and other senior Chinese officials with oversight responsibility for Hong Kong.

The claim that the security law will have no impact on commerce in the territory has been repeated this past week in China’s state-controlled media, and by a chorus of Chinese diplomats, mainland legal scholars, and global companies with business operations in China.

“We reiterate that we respect and support laws and regulations that will enable Hong Kong to recover and rebuild the economy and, at the same time, maintain the principle of ‘one country two systems,’” British banking giant HSBC affirmed in a carefully-worded post on a Chinese social media platform Wednesday. London-based Standard Chartered, as well as British colonial-era trading houses Swire and Jardine Matheson, have offered similar public assurances.

And yet, the new law has sent a chill through Hong Kong’s foreign business community. In private, many expatriate bankers, investors, and business executives in the city profess deep misgivings about the vagueness of the legislation, and how it will be interpreted and enforced.

Of 180 U.S. companies surveyed recently by the American Chamber of Commerce in Hong Kong, more than 80% said they are concerned about China’s plan to foist new security measures upon Hong Kong. Fifty-three percent said they were “very concerned,” while 30% said they were “moderately concerned.” About 60% predicted the new law would harm their business.

Notably, though, 71% said that, for now, their companies have no plans to move capital, assets, or business operations out of Hong Kong.

Details of the new law remain unclear because the precise language of the bill is still being drafted in Beijing by members of a small committee of senior leaders from China’s ruling Communist Party. It was previously expected that work on the measure wouldn’t be complete until August. Hong Kong representatives to China’s National People’s Congress said Wednesday that fellow delegates are pushing for the new law to take effect before July 1, which marks the 23rd anniversary of Hong Kong’s return to Chinese sovereignty.

Proponents of the measure say it only targets perpetrators of four categories of crime: secession, subversion, terrorist activities and foreign intervention. They insist that law-abiding merchants, whether foreign or Chinese, have nothing to fear.

In an interview with Eastworld, Cora Chan, an expert on constitutional law at Hong Kong University, highlighted multiple ambiguities in the security law as it has been described so far by mainland authorities: How much power will the law grant to mainland security agents operating in Hong Kong? Will it criminalize speech as well as actions? Will final adjudication of the law fall to Hong Kong courts or some other authority?

Chan argues those ambiguities create long-run risks for foreign companies operating in Hong Kong at a time of escalating tensions over trade and national security.

U.S. President Donald Trump’s vow to punish Beijing by stripping Hong Kong of its special trade status with the United States only raises the stakes—and is certain to inflict far more pain on Hong Kong residents than leaders in the mainland.

More Eastworld news below!

Clay Chandler
clay.chandler@fortune.com

This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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