HONG KONG (BLOOMBERG) - China will not impose an anti-sanctions law on Hong Kong for now, local news organisation HK01 reported, a seemingly unusual backtrack from Beijing on a move that had alarmed businesses in the Asian financial hub.

The decision to shelve the controversial law in the near term came after executives from Hong Kong and mainland Chinese financial institutions raised their concerns with Vice-Premier Liu He, HK01 reported on Tuesday (Oct 5), citing at least one unidentified person from the business sector.

China's top decision-making body, the National People's Congress Standing Committee, which votes on such legislation, is due to meet from Oct 19 to 23 in Beijing.

The move eases a major source of concern for Hong Kong's financial markets, which have been roiled by a recent wave of Chinese government crackdowns in sectors including technology and education.

The anti-sanctions law is based on legislation passed on the mainland in June, which gave the Chinese government broad powers to seize assets from entities that implement United States sanctions, potentially putting companies in Hong Kong in the cross-hairs of a conflict between the world's two largest economies.

Imposing this legislation on Hong Kong could destabilise the city's financial sector and cause foreign investment to flow towards rival Asian finance centre Singapore, one individual in the business community told HK01.

In August, China's top legislative body postponed a vote on imposing the anti-sanctions law on Hong Kong. One Hong Kong delegate to the National People's Congress Standing Committee said the vote had been delayed pending further study. A Hong Kong government spokesman did not immediately reply to an e-mailed request for comment on Tuesday morning.