Hong Kong's National Security Law Green Lighted

President Xi Jinping votes on the national security law

The deal is done.

This afternoon the National People's Congress voted to authorize the Standing Committee to tailor make a national security law for Hong Kong.

Matthew Cheung was on CNN today

How did the vote go down? 2,878 for, one against -- wonder who that was -- and six abstentions.

So now the Standing Committee will draft the law, as early as June, that will prohibit acts of secession, subversion, terrorism or conspiring with foreign influences in Hong Kong. It will also allow mainland agencies, like the secret police to legally operate in the city.

What the law will look like is anyone's guess, but it has apparently included the phrase: any actsthat "seriously endanger national security", an umbrella term for... anything.

Meanwhile Chief Secretary Matthew Cheung Kin-chung was on CNN trying to reassure viewers that life will be the same in Hong Kong for 99.99 percent of the people, but could not provide any specifics or guarantees this would be the case.

Carrie Lam signed her name supporting the law

He kept saying the law was being drafted and that the concerns and aspirations of people would be passed on to the Standing Committee...

Chief Executive Carrie Lam Cheng Yuet-ngor was also seen on the streets of North Point, saying how so many people supported the national security law.

Are they trying to convince themselves? Because they aren't doing a good job of convincing the rest of us.

But at the same time, China still needs Hong Kong as a legitimate financial hub.

According to stats from Refinitiv, since the handover Hong Kong has handled 356 Chinese companies' IPOs, which exceeds 281 in Shanghai, 59 in the New York Stock Exchange, 22 on the Nasdaq, and 4.8 in London.

Graph showing HK's importance for China IPOs

If Beijing wants Chinese companies to continue having legit IPOs then Hong Kong's freedoms need to remain. Once those freedoms are threatened, Beijing can kiss those IPOs good-bye.

Late last night word came down that US Secretary of State Mike Pompeo said Hong Kong was not sufficiently autonomous from the mainland to warrant its special trade status, and that sanctions could be imposed.

China reacted with furious words, describing the US as having "gangster logic", saying it was "utterly imperious, unreasonable and shameless for some in the US to stigmatize and demonize China's just and legitimate measures to plug the loopholes in national security, and even threaten with sanctions based on their domestic law," adding that the US went "all out to reinforce their own national security legal system".

Mike Pompeo says Hong Kong not autonomous

The Hong Kong Human Rights and Democracy Act was approved by the US Congress and signed into law by President Donald Trump in November. It requires the State Department to certify at least once a year that the city retains enough autonomy to justify favourable trading terms. It also specifies that officials responsible for human rights violations in the city could be subject to sanctions, including visa bans and asset freezes.

This seems like a stronger threat to Beijing, though the implications for American businesses in Hong Kong will be murky.

At least it was a stronger signal than the joint statement from Canada, the US, UK and Australia expressing concern, but not much else. Does Beijing care? Words sadly won't be enough to move Beijing to take the moral high ground. Instead it will consider these four countries as meddling in Hong Kong's affairs and will be determined to enact the law as soon as possible.