Japan Firms Concerned over Hong Kong Security Law

Tokyo, July 1 (Jiji Press)--China's enactment of the Hong Kong national security law is triggering alarm among Japanese companies doing business in the territory. "I hope that the current system doesn't change greatly," Toshiba Corp. <6502> President and Chief Executive Officer Nobuaki Kurumatani said of the "one country, two systems" principle for Hong Kong. Some 1,400 Japanese companies do business in Hong Kong, second only to the number of Chinese firms, according to 2019 data from the Japan External Trade Organization. Minoru Nogimori, economist at Japan Research Institute Ltd., said there are fears that information related to corporate activity in Hong Kong may be easily passed on to the Chinese government. "Companies will be forced to review their operations amid heightened uncertainty," Nogimori said. Some Japanese firms are taking a wait-and-see approach. A Sony Corp. <6578> official said that it is too early to tell because how Beijing will control Hong Kong remains unknown. "There may be an impact (on business) if Hong Kong is entirely incorporated into China, but there is a need to look at the long-term effect," said an official at Canon Inc. <7751>, which has a sales company in the territory. There are also concern over the future of Hong Kong's role as a global financial hub. "An accelerated capital flight will create turmoil in financial markets," a Daiwa Securities Group Inc. <8601> official said. Kengo Sakurada, chairman of the Japan Association of Corporate Executives, or Keizai Doyukai, said there is a significant possibility that the Hong Kong issue will further raise tensions between the United States and China. An Olympus Corp. <7733> official said, "We'll constantly be on the lookout for signs of protests" in Hong Kong. END