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Beijing’s political reach casts shadow over Hong Kong business

Beijing’s political reach casts shadow over Hong Kong business

HONG KONG — Jeremy Tam, a pro-democracy lawmaker in Hong Kong, quit his job at Cathay Pacific Airways after serving the company as a pilot for almost two decades.

“I’ve decided to give up the job I love so the airline could be free from more vexatious attacks,” he said in a Facebook post on Tuesday.

Tam’s move followed a series of sackings and resignations, including the departure of CEO Rupert Hogg, after the carrier was named and shamed by the mainland Chinese aviation authority and state-owned media for employees’ involvement in Hong Kong’s recent political protests.

While foreign businesses operating on the mainland have long aligned themselves with Beijing’s political agenda to get access to the vast Chinese market, their counterparts in semi-autonomous Hong Kong were largely free from such pressure.

Observers say what happened to Cathay should alarm senior managers of multinationals in Hong Kong, as employees’ political activities outside work can now have repercussions for their business on the mainland.

“The Chinese government does not see business as ‘separate’ from state, and has made clear that [companies] must show their loyalty to Beijing,” said Steve Vickers, CEO at political and corporate risk consultancy Steve Vickers & Associates.

Exposed to greater risks are international businesses holding substantial operations and investments within or related to China — including in aviation, luxury brands and entertainment — as well as professional services that count Chinese as major clients.

“This situation poses a dilemma to companies operating in Hong Kong,” he said. “The choice is potentially binary: loss of the bigger market and punitive measures later, or the loss of local market and damage to international image?”