HONG KONG (Reuters) - As Hong Kong’s judges and senior lawyers paraded in ceremonial wigs and gowns on Jan 8 to mark the start of the legal year, anxieties over China’s growing reach into the city’s vaunted legal system swirled with the wintry winds.

At a private cocktail reception with leading judges before the event, one of the topics of discussion was concerns over Beijing’s influence in the judiciary, according to one participant who requested anonymity.

Hong Kong’s judges are increasingly expressing such fears in private, concerned that interpretations and amendments from China’s parliament could soon force them to curb the city’s freedoms, according to interviews with four veteran judges, as well as with sources close to several others.

The judges interviewed said that while they believe the independence and integrity of the judiciary remains intact, such interpretations could effectively mean Beijing is telling them what to do, limiting their authority on key political and security issues.

“We know Beijing has their own fears” over Hong Kong, said one judge, a veteran of Hong Kong under both British and Chinese rule. “But if they interpret too frequently, the risk is they will leave us nothing left on which to rule.”

Such remarks are highly rare from Hong Kong judges, who tend to be cautious and are prevented by convention from publicly raising political issues.

Hong Kong’s rule of law is widely seen as a cornerstone of the former British colony’s international reputation as a business hub, key to protecting its autonomy from a Communist Party leadership wanting greater control.

Any erosion of that reputation could undermine Hong Kong’s relative attractiveness as a business center for investors compared to mainland Chinese cities like Shanghai or Shenzhen, or regional rival Singapore.

Neighboring Macau too has been facing such pressures.

China’s Hong Kong and Macau Affairs Office, which is overseen by China’s cabinet, the State Council, did not immediately respond to questions from Reuters.

Hong Kong’s legal and social freedoms are far greater than those that exist across mainland China. And, like Hong Kong’s separate legal traditions that are based on common law, they are detailed in a mini-constitution known as the Basic Law under a “one country, two systems” formula.

While Beijing’s leaders publicly say they respect Hong Kong’s rule of law as part of its high degree of autonomy, some judges and lawyers remain skeptical.

“There is a marked climate of unease among my peers” that “wasn’t there a few years ago,” said a second judge.

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With the prospect of President Xi Jinping ruling China indefinitely following the scrapping of term limits this month, anxieties have resurfaced over his stance towards Hong Kong.

In a landmark speech in the city last June, Xi warned that Beijing would brook no challenge to its authority. In previous speeches he has suggested a blurring of the separation of powers between the government and judiciary in Hong Kong.

For some, the situation highlights an awkward contradiction within the Basic Law: even as it guarantees Hong Kong’s judicial independence, the document still grants final power of interpretation to a committee of the National People’s Congress, China’s parliament.

That puts the parliament beyond Hong Kong’s top Court of Final Appeal, a body that includes leading jurists from Britain, Australia and other common law jurisdictions.

Some judges have also expressed concern to Chief Justice Geoffrey Ma, according to people familiar with the situation.

“They use the constitution as a protector of their rule, not as a protector of civil rights,” said Audrey Eu, a senior barrister and former democratic politician, referring to Beijing. “They can interpret it any way they like.”

JUDGES “TRAPPED”

“The judges see themselves as trapped,” said one diplomat close to the situation. “They might be independent as ever, but the National People’s Congress in Beijing is not independent and they will have to increasingly implement party diktat.”

Asian and Western envoys are watching closely, with some describing Hong Kong’s legal system as the one institution that Beijing has yet to fully penetrate, unlike other spheres like politics, academia and the media.

Hong Kong corporate lawyers say international clients such as hedge funds are now questioning the city’s legal future and potential role of Beijing. In contracts, some are stipulating that Singapore be used as a host for any arbitration, they say.

Kevin Yam, a commercial lawyer and media columnist, said that even if interpretations were political rather than commercial, “the perceptions created by them could still lead to much more work needed to be done to convince international investors that Hong Kong’s rule of law is largely intact.”

A U.S.-China Economic and Security Review Commission report last November noted the importance of the link between Hong Kong’s strong rule of law and economic openness.

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During the commission’s trip to Hong Kong last May, observers “noted the risk for Hong Kong’s continued importance as Asia’s financial center if companies and individuals lose confidence in Hong Kong’s rule of law and other freedoms as they are eroded by Beijing,” the congressional report stated.

Beijing’s power of interpretation has been sparingly used since Britain returned Hong Kong to Chinese rule in 1997. The last interpretation, in November 2016, was made preemptively ahead of a local court hearing to effectively bar pro-democracy lawmakers who had mocked their oath taking.

The prospect of tougher national security laws, a crackdown on an independence movement and a plan to give mainland security personnel legal control of a local rail platform could all spark legal challenges, and risk interpretations as Beijing seeks greater control.

Some judges and lawyers said that when Beijing issued its first interpretation in 1999, it was seen as a last resort. The threshold is now far lower, they fear.

CERTAINTY OF JUDGMENTS

Elsie Leung, a lawyer who served for eight years as Hong Kong’s first justice secretary after the handover, acknowledged those fears but said the system is working well and Beijing is entitled to interpret where it sees necessary.

When asked whether Beijing had grown more confident about exercising its Basic Law powers, even preemptively, she said “now, after the accumulation of all their experience they are able to do things more expeditiously”.

But Leung, who serves on the NPC’s Basic Law Committee, added that “the rule of law and judicial independence are well protected under the Basic Law” and that interpretations would still be made sparingly.

She added that Beijing needed certainty on key judgments that it felt affected national sovereignty, saying such matters were “in the interests of any government”.

LEGAL APPOINTMENTS

When he opened the legal year, Chief Justice Ma didn’t directly address fears of pressures from Beijing but repeatedly stressed the importance of common law.

“It is regarded as vital to the continuing success of Hong Kong not only from financial or business points of view, but also everyone in the community as a whole,” he said.

When asked later by Reuters about judges’ fears of interference from Beijing, he skirted the issue but stressed the “professionalism” of the Hong Kong judiciary.

The main pressures on them, he said, was “that they act in accordance with the law and to get it right”.

As well as making judgments, Ma heads a body that oversees judicial promotions and appointments, making recommendations to Hong Kong’s chief executive.

By convention, those recommendations are always accepted. But the chief executive maintains veto power.

Some judges, and those close to them, see that veto power as a potential weak point should Beijing lean on the Hong Kong government to exert greater control.

“So far the system works and we are left alone,” said one committee member, speaking on condition of anonymity. “And we all want to ensure that continues.” The committee member added: “It would be truly shocking for the government to meddle with us.”

A spokesman for the judiciary said Ma would not comment on written questions submitted by Reuters.