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After four months of protests in Hong Kong descended from peaceful marches to violent clashes, culminating in an 18-year-old man being shot in the chest by a police officer on Tuesday, Hong Kong’s Chief Executive Carrie Lam today invoked a colonial-era rule giving her sweeping powers to combat the unrest.
“The Chief Executive and council decided, at a special meeting this morning, to invoke the power under the Emergency Regulations Ordinance and make a new regulation in the name of a prohibition on face covering, which is essentially an ‘anti mask law,” Lam told a press conference Friday afternoon. The new law will come into effect at midnight local time.
Lam was at pains to stress that although her government is enacting “emergency” regulations, it was not declaring Hong Kong to be in a “state of emergency.” Lam did say, however, that Hong Kong but is “indeed in an occasion of serious danger.”
The new ruling has done little to ease the sense of tension on the streets, where thousands of protesters have now already gathered and have set at least one fire. Thousands also took part earlier in spontaneous marches at lunchtime ahead of Lam’s press conference, and civil servants were given permission to leave work at 3:30 p.m.—a clear sign the government expected the new law to spark a backlash.
What is the ERO?
The Emergency Regulations Ordinance (ERO) is a bill written by Hong Kong’s British colonial rulers in 1922 to combat dockland strikes. The ordinance was last implemented in 1967 when the city was rocked by riots and bombings perpetrated by Communist guerilla groups.
The bill grants the Chief Executive the power to create new laws and could enable the government to censor media, search premises without warrants, take control of ports and transport, implement curfews and more. For now, however, Lam is using ERO only to unmask protesters.
According to Secretary for Security John Lee, the so-called mask ban will prohibit people from covering their face in both approved and unapproved public assemblies—such as rallies and marches—as well as unlawful assemblies and “riots.”
Lee continued to say that a “mask” includes any face covering—including scarves and face paint—and that violators face a HK$25,000 ($3,000) and one year’s imprisonment. The ban won’t include face-coverings worn for religious, medical or professional reasons.
Word on the Street
“I think the legislation will have a positive impact on the business environment,” says Li Chen, a professor at Chinese University Hong Kong School of Business, adding the major caveat that it depends upon how well police can enforce the new order—which will be a truly Herculean task.
Instability has rocked investor and business confidence this summer. Retail sales fell 23% in August to $3.74 billion, following an 11.3% slump the month before. Visitor numbers to the city fell 40% in August while inbound flight and local hotel prices have slumped to record lows.
The capital market has taken flight too: this week Goldman Sachs reported that up to $4 billion worth of deposits were moved out of Hong Kong banks between June and August, and were likely moved into neighboring Singapore.
Li notes that Singapore is often viewed as a stable market for investment due to the strength of its government, but that the Hong Kong legislature can’t expect to simply bring stability by assuming more power.
“The whole situation depends on how Hong Kong government can manage it. If it can manage the process in a way that depoliticize the issue that’s consistent with maintaining the rule of law then I think it’s not going to affect the international investor’s confidence,” Li says.
Investors themselves seem unsure. The Hang Seng Index, which tracks a basket of Hong Kong-listed stocks, fluctuated throughout the day. The index jumped 0.3% Thursday afternoon, when local media first reported the Executive Council would meet to debate the ERO. Following the spontaneous protest at lunchtime, the index slipped 1.3% again but regained half of its losses by market close.
The Executive Council has the unilateral power to enact the ERO without consent from Hong Kong’s parliament, the Legislative Council (LegCO), but LegCo can theoretically revoke the ERO if enough lawmakers vote to overrule it when parliament opens again on Oct. 16. However, pro-establishment lawmakers hold a majority in parliament.
“The fact the Democrats are so outnumbered at the LegCo means the government will always win,” says pro-democrat lawmaker, Claudia Mo, who opposes the implementation of ERO. Although the ERO likely won’t be struck down by LegCo, Mo says the courts could have the power to revoke the act, although that would be a long process, which could take more than a year.
As for the business community? “I don’t think the business community will be convinced at all. Carrie Lam obviously thinks it’s a very clever scheme on her part, but it will be the opposite effect. The repercussions will be amazing.”
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