Paul Chan, the top finance official of Hong Kong, traveled to Paris, London, Frankfurt and Berlin last September to lure foreign investors. Last month he abolished taxes on foreigners’ purchases of Hong Kong real estate. And he is soon set to host an international art show, as well as conferences for big money funds and advisers to wealthy families.

Mr. Chan’s brisk work pace represents an attempt to shore up Hong Kong’s role and image as the financial hub of Asia. But that effort is now colliding with a move by the city’s Beijing-appointed leaders to further tighten their crackdown on the remaining political freedoms in the city.

Hong Kong’s legislature approved broadly worded security legislation on Tuesday. City leaders described the law as necessary to stop foreign interference in local politics, but critics characterized it as a comprehensive effort to muzzle dissent.

Under its top leader, Xi Jinping, China has asserted greater influence in the past four years over Hong Kong’s laws and prosecutors. That has raised alarms for American and European companies that use the city and its open financial markets as a gateway to China. The mainland’s own economic struggles, especially in real estate, have further shaken confidence in Hong Kong as a place to put money.

Many investors and companies have already begun moving activities to Singapore, a rival that has the advantage of being an independent country 1,200 miles southwest of China.

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