Hong Kong’s government, which owns virtually all the land in the territory, has inserted a national security clause into land sales.
An official tender document for a site on sale in Kowloon says a buyer can be disqualified if they or their parent firms engage in activities that endanger national security or affect public order.
The government updated its internal guidelines for procurement in August last year to include security law requirements, the Hong Kong Economic Times reported yesterday, citing a government spokesperson.
Photo: Reuters
The clause was first included in its tender for a Kai Tak site in November last year, the newspaper reported.
The move underscores the risks for the tycoons who control Hong Kong’s biggest developers, although it is not seen as changing the way they do business.
Hong Kong’s largest builders are Sun Hung Kai Properties Ltd (新鴻基地產), CK Asset Holdings Ltd (長江實業), New World Development Co (新世界發展), Henderson Land Development Co (恒基兆業地產) and Wheelock Properties Ltd (會德豐地產).
“The potential impact of this clause may be limited,” Bloomberg Intelligence analyst Patrick Wong (黃智亮) said. “It has been added in the land lenders for a few months and major developers like Sun Hung Kai, CK Asset and Henderson Land have also submitted their bids on recent tenders.”
Land has played a key role in Hong Kong ever since the territory was colonized in the 1840s. Almost all land in Hong Kong is leasehold and owned by the government, with the exception of the 173-year old St John’s Cathedral site in Central.
The government relies on land auctions to the highest bidders for the bulk of its revenue. Land premium and stamp duties account for one-third of the exchequer’s total income.
Beijing imposed the National Security Law on the territory in 2020 to curb dissent.
The clause is also part of the contract when leasing government properties. The Foreign Correspondents Club said in November last year, when renewing its lease of a former ice house, that the government introduced standard clauses in the new tenancy to safeguard national security.
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