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Half of the European companies present in Hong Kong indicate in a report that they want to leave the island, at least partially, in the next 12 months. Nearly half of American businesses consider packing their bags too. The main reasons are the strict rules regarding the health crisis and the increasingly strong tightening of Beijing.
Hong Kong has long been synonymous with a business city, stable, relatively free, where it is good to live as an expat working for a big financial company. But the tide is turning, and half of European companies are considering lifting the cap next year. This is shown in a report by the European Chamber of Commerce in Hong Kong.
25% of businesses want to leave town entirely within 12 months, 24% want to partially move their operations. Only 17% have no relocation plans, the report shows. The other 34% of companies are not yet sure.
Zero-covid? zero attraction.
First, sanitary measures, just as strict as those in mainland China, are pushing companies to exit. Forced quarantines of up to three weeks, in hotels, at personal expense, are particularly tedious for incoming travelers, such as international workers. This policy weighs so heavily on businesses that it even outweighs the elements that normally make the city attractive, i.e. its international connection but at the same time its proximity to China, as well as its business opportunities.
The city, however, loose ballast, recently. Quarantines have increased to seven days and flight bans have been lifted, reports CNN Business.
A similar study, published in January, showed that 44% of American companies were also considering leaving. The management of the health crisis was also singled out.
The end of an era?
The covid seems to be the straw that broke the camel’s back. Alongside covid, Beijing’s increasingly strong grip on the island, a former British colony which had always enjoyed a special status, and on its hitherto democratic policy (as with the law on extradition which led to violent protests in 2019, and a security law that limits free speech) also works against attractiveness.
In the report of the American Chamber of Commerce, cited by CNN, 80% of companies indicate that they are impacted by the security law. Half say employee well-being has also taken a hit, and some have even emigrated as a result.
The city of Hong Kong, international hub and stronghold of business in Asia, therefore seems to be losing its luster.