By Clare Jim

HONG KONG, May 23 (Reuters) – Hong Kong’s pro-Beijing
politicians sought to allay worries about the impact of China’s
proposed national security legislation on the Asian financial
hub’s business environment, saying it would boost investor
sentiment.

The legislation aims to tackle secession, subversion,
terrorism, and foreign interference and could see mainland
intelligence agencies set up bases in Hong Kong, raising fears
of direct law enforcement.

U.S. government officials have said the legislation would
end the Chinese-ruled city’s autonomy and would be bad for both
its and China’s economies. They said it could jeopardise the
territory’s special status in U.S. law, which has helped it
maintain its position as a global financial centre.

Bankers and headhunters said it could lead to money and
talent leaving the city. Hong Kong stocks slumped 5.6% on
Friday

Upon her return from Beijing late on Friday, Hong Kong
leader Carrie Lam said the stock market “goes up and comes down”
and it was in fact the large scale pro-democracy protests in
2019 which destabilised the business environment.

“Especially having gone through almost one year of
disruptions, violence and uncertainties, anything particularly
in safeguarding national security that will help stabilise the
environment is indeed very good for local investment sentiment,”
she said.

Henry Tang, a member of the Standing Committee of the
Chinese People’s Political Consultative Conference, said the
legislation was “beneficial” for the business environment as it
brings stability and strengthens the rule of law.

Local newspaper Mingpao quoted a Hong Kong General Chamber
of Commerce statement saying that while more details and
explanations were needed to preserve confidence, the chamber
“always wanted to see social stability and peaceful business
environment, and not violence”.

Former Hong Kong chief executive Leung Chun-Ying pointed to
large U.S. investments in mainland China despite national
security laws there.

“Can businessmen tell Hong Kong people, why are there more
U.S. companies, U.S. businessmen and U.S. investments in
mainland China than Hong Kong?” he wrote in a Facebook post.
(Reporting by Clare Jim; Editing by Muralikumar Anantharaman)