The national security law in Hong Kong is causing disagreement among analysts regarding its social and economic effects.

• In just 11 days, the proposed legislation was debated, modified, and approved, setting a new record for Hong Kong's legislative process, according to an Eurasia Group analyst.
• Crimes like treason and insurrection were punishable by life imprisonment as per the law.

The new national security bill in Hong Kong aims to prevent, suppress, and punish espionage activities, but has caused division among analysts regarding its social and economic consequences.

On Tuesday, the Safeguarding National Security Bill was passed by Hong Kong lawmakers, despite criticism over provisions such as life imprisonment for 'treason' and 'insurrection.'

Eurasia Group's senior analyst, Dominic Chiu, stated that the bill's urgency was "unusual" and aimed to prevent a prolonged debate that could result in international opposition.

The bill known as Article 23 was introduced by Hong Kong's Legislative Council on March 8, and Chief Executive John Lee urged the need to pass it "as soon as possible" due to the "increasingly complex" geopolitics backdrop.

In 11 days, the bill was deliberated on, amended, and passed, setting a record in Hong Kong's legislative history, as pointed out by Chiu.

Some industry experts predict that the strict regulations will benefit companies.

Improving the long-term stability and competitiveness of the business environment in Hong Kong through the passing of the bill would help strengthen Hong Kong as a financial hub by attracting more global capital, according to William Ma, chief investment officer at GROW Investment Group.

The new law in Hong Kong could attract investment by creating a more secure business environment, according to Dickie Wong, executive director of research at Kingston Securities.

Wong stated that some foreign investors might adopt a more cautious stance toward Hong Kong due to concerns about the law's effect on the city's autonomy.

Who is affected?

The U.S. State Department voiced worries about Hong Kong's security law in late February, stating that it could be used to suppress dissent through the threat of arrest and detention.

Beijing's national security law implemented in 2020 serves as the basis for Hong Kong's security law, which aims to prevent secession, subversion of state power, terrorism activities, and foreign interference.

The new national security law in Hong Kong brings the city closer to China's public security laws and speeds up Hong Kong's integration with China, according to Jiang Zhang, head of equities at First Plus Asset Management, as he spoke to CNBC.

According to Chiu of the Eurasia Group, Radio Free Asia, a US government-funded news outlet, could be a top target and may withdraw its operations from Hong Kong after the enactment of new laws.

Other media outlets, non-governmental organizations, dissidents, and human rights organizations overseas that lobby foreign governments to take punitive action against the Hong Kong government could also be potential targets.

This story was contributed to by Lee Ying Shan, Chery Kang, and Yolande Chee of CNBC.