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You may have heard of the boiling frog effect.

It goes a little something like this. Place a frog into a pan of boiling water, as the French might do, and it’ll leap straight out. Yet put a frog into a pan of cold water and heat it slowly, and the amphibian will be blissfully unaware that it is due to meet a steamy demise. Or not until it’s too late anyway. So the theory goes.

Although something of an old wives’ tale, it has proved a useful metaphor in markets over the years. Wirecard investors, for instance, may realise the slowly-boiled-to-death frog feeling a little too well.

Which brings us to a pressing matter in markets which feels rather boiling-frog-like. To us, at least.

We’re talking about Hong Kong.

Over the weekend, this news broke via Reuters:

Former Hong Kong lawmaker Ted Hui said on Sunday his local bank accounts appeared to have been frozen after he said he would seek exile in Britain to continue his pro-democratic activities.

Hui told Reuters via the social media [sic] Whatsapp that the banks accounts belonging to him, his wife and his parents in Bank of China Hong Kong, HSBC and Hang Seng Bank were frozen. He gave no further details.

Democracy activists say conditions have worsened in the former British colony after China imposed security legislation on the financial hub in June, making anything Beijing regards as subversion, secession, terrorism or colluding with foreign forces punishable by up to life in prison.

China, which promises Hong Kong a high degree of autonomy, denies curbing rights and freedoms, but authorities in Hong Kong and Beijing have moved swiftly to quash dissent after anti-government protests erupted last year and engulfed the city.

Now, we’re by no means experts on the complex and evolving nature of China’s designs for Hong Kong, but one thing we are sure about is that the idea local bank accounts can be frozen for seemingly political reasons opens up serious questions about the island’s future as a financial centre. To us at least, it looks increasingly precarious. Despite, we should add, optimism over the summer that it will remain a premiere financial centre. (See this BBC article.)

So what FT Alphaville would like to know is: if you’re a reader based in Hong Kong, or another financial centre in Asia such as Singapore or Tokyo, what do you think of this latest news? And does it change your view as to where the balance of power will be in the region? If you are a Hong Kong resident with substantial wealth there, are you getting increasingly worried about getting frogged?

If you’d like to comment below, feel free, or if you’d like to be a little more discreet -- email jamie.powell@ft.com. We’re also available on Signal, if you feel cautious. We wouldn’t blame you.

Related Links:
Hong Kong’s leader has ‘piles of cash’ at home after US sanctions — FT

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