Foreign companies have for decades reaped the benefits of settling in Hong Kong, a historically stable and expatriate-friendly financial hub on the doorstep of mainland China.
But lately, as Beijing tightens its grip on the former British colony, these companies are increasingly eyeing outlets.
Nearly half of all European companies in Hong Kong are considering relocating in the next year, according to a new report. Companies cite the local government’s extremely strict Covid-19 protocols that mirror those on the mainland.
Among companies planning to leave, 25% said they would move entirely from Hong Kong within the next 12 months, while 24% plan to move at least partially. Only 17% of companies said they had no relocation plans for the next 12 months.
The city’s “Covid-zero” strategy has led to serious consequences for businesses and residents, the European Chamber of Commerce report said. Hong Kong’s “biggest advantage” — its global connectivity and proximity to mainland China — “has been almost completely turned off,” the Chamber said.
Hong Kong’s quarantines are notorious among residents and expats. At one point, the government required most inbound travelers to self-isolate in hotel rooms, on their own, for three weeks, one of the longest periods of isolation in the world.
Although Hong Kong authorities recently lifted flight bans and reduced the city’s quarantine requirements to seven days, an exodus is already taking place.
Last week, Hong Kong Chief Executive Carrie Lam acknowledged that the protocols were eroding residents’ satisfaction with the city, saying she had “a very strong feeling that people’s tolerance is waning.”
The European survey released last Thursday follows a similar report from the American Chamber of Commerce in January, which found that 44% of expats and businesses are likely to leave the city, citing Covid-related restrictions.
“Hong Kong still offers business opportunities, but a number of issues, especially draconian travel restrictions and worsening US-China relations, weigh on sentiment,” the US report said.
For some, the travel restrictions proved to be the last straw after years of watching Beijing encroach on Hong Kong politics.
Even without the Covid crisis, headhunters were having trouble bringing talent to Hong Kong because of Beijing’s increasing oversight of the semi-autonomous territory.
Massive and sometimes violent protests sparked by a Beijing-imposed extradition bill plunged the city into political crisis in the summer of 2019. A law that broadly restricts Hong Kong’s free speech rights.
More than 80% of US businesses in Hong Kong said they were impacted by the national security law, according to the American Chamber of Commerce report. Nearly half saw employee morale hit and said they lost employees who decided to emigrate.
Source: CNN Brasil
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