Hong Kong Hub Status Under Fire
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Doubts about Hong Kong’s ability to retain its status as a global hub have been spotlighted in the past weeks by multiple entities – including the local government – citing various issues ranging from politics to the pandemic.
Doubts about staying are increasing for numerous international companies and expatriates residing in Hong Kong, according to various sources including a Canadian envoy, a survey from an American business group and even the head of the Hong Kong Monetary Authority.
Various issues were cited as drivers including Beijing’s national security law (NSL) as well as the local government’s management of the coronavirus pandemic.
Earlier this week, Canada’s consul general in Hong Kong and Macau Jeff Nankivell said that the effects of the NSL led some Canadian firms to review contingency plans and study options for data transfer in the event of a Hong Kong withdrawal.
He cited issues such as the revamp of the city’s electoral system and reduced post-NSL communication with a noticeable number of political parties and non-governmental organizations.
Several days later, the American Chamber of Commerce in Hong Kong (AmCham) released a survey that said 42 percent of expats were considering an exit with NSL named as the top driver as cited by 62 percent of respondents.
Other reasons cited include the effects of travel from Hong Kong’s quarantine policies (49 percent) and the impact of Beijing’s legislation on education (36 percent).
“Other reasons cited include the effects of travel from Hong Kong’s quarantine policies (49 percent) and the impact of Beijing’s legislation on education (36 percent).”
«Based on the survey results, AmCham strongly suggests that the government pay close heed to the sentiment of expatriates in Hong Kong and work towards allaying major concerns through stronger understanding of Hong Kong’s international talent, lest the city lose competitiveness versus other business hubs,» the U.S. business group said.
In a rare showing of doubt, even local government officials expressed worries about business plans to relocate to another hub, albeit for non-political reasons.
In early May, HKMA chief executive Eddie Yue said Hong Kong risked diminishing attractiveness as a financial center due to potential exclusion from travel bubbles over its relatively low vaccination rate – around 14.8 percent of the city’s population of 7.5 million have received their first dose, according to data compiled by Oxford University.
If you were a regional executive sitting in Hong Kong running the regional business in Hong Kong, without being able to fly around in Asia or fly back to your headquarters for reporting, will you think I should remain in Hong Kong, or should I move to another center? Yue said.
Separately, government officials elsewhere expressed contrasted confidence in Hong Kong’s retention of international companies.
In response to the AmCham survey, Commerce Secretary Edward Yau refuted concerns about Hong Kong’s attractiveness for foreign firms to do business, highlighting opportunities linked to the Greater Bay Area and the Belt and Road intuitive.
Different business entities would have different reasons to stay or otherwise, but I think figures also speak for themselves, Yau said in a published transcript, citing a government survey that said the number of foreign firms remained steady at around 9,000. «Of course, there is no ground for complacency. We believe that business decisions would best be made by people who actually stay and operate in Hong Kong.»
Questions & Answers
Q.What non-political issues are causing doubts about Hong Kong's status as a financial hub?
What non-political issues are causing doubts about Hong Kong's status as a financial hub?
The local government's management of the coronavirus pandemic and its quarantine policies are issues. The HKMA chief also noted Hong Kong's low vaccination rate could diminish its attractiveness for international travel and business.
Q.What evidence does the Hong Kong government present to counter concerns about the city's business environment?
What evidence does the Hong Kong government present to counter concerns about the city's business environment?
Commerce Secretary Edward Yau cited a government survey stating that the number of foreign firms in Hong Kong has remained steady at around 9,000. He also highlighted opportunities linked to the Greater Bay Area and Belt and Road initiatives.
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