Japan’s Daiwa Securities could accelerate the shift of its operations from Hong Kong to mainland China should the political environment worsen.

Even prior to the enactment of the national security law, Daiwa was planning to shift some operations to the mainland once its joint venture kicks off. But under the post-law environment, the Japanese brokerage house is considering the possibility of accelerating the move.

«If facts emerge such as people getting arrested one after another, we may need to front-load it,» said Daiwa’s deputy president Keiko Tashiro in a «Bloomberg» report, adding discussions are underway to seek approval for the mainland joint venture with an eye for launch by year-end.

«Once the joint venture is established, we can do China business in China.»

Japanese Appetite
According to a recent survey carried out by the Hong Kong offices of the Consulate General of Japan in Hong Kong and the Japan External Trade Organization, more than 80 percent of 304 Japanese companies were concerned or very concerned about the national security law. Information restrictions (70.5 percent) and eroding rule of law and judicial independence (62.4 percent) were cited as the top worries.

A handful of respondents looked to downscale their local operations (9.6 percent), review their management base function (3.6 percent) or withdraw from Hong Kong entirely (1.3 percent). 22 percent said they would consider taking such measures in the future.

Suggested regional alternatives include mainland China, Japan, Singapore and other Southeast Asian countries.

Still China's Window to the World
Although Tashiro also lauded Singapore, where Daiwa has a banking license, due to the ease of conducting deb-related business, she underlined that the perception of Hong Kong as the «window to the world» for China remains.

«I don’t think financial firms need to worry too much,» she said.

More Diversity
In addition, Tashiro also noted the need for Japanese firms to hire more directors externally with varied backgrounds and at Daiwa, she said women could make up half of its board by 2030, more than double of the current 23 percent.

«Society is growing increasingly diverse, so if companies want to keep pace, they need to incorporate diversity into an official organization like the board,» explained Tashiro, who also oversees Daiwa's initiatives associated with the UN sustainable development goals.