Concerned about Hong Kong’s future as the best place to do business in China and beyond? Multinational companies are taking bets. This creates uncertainty about the trends of one of the world’s leading commercial cities.
amid political turmoil Authoritarian crackdown by mainland China and the epidemic Global companies and professionals are heading to competing business cities such as Singapore and Shanghai. Some Chinese trading hubs see it as a better place to profit from the country’s vast economy.
Since the UK returned Hong Kong to China in 1997, city leaders have called the semi-autonomous territory a “self-governing territory.” The “World City of Asia” is an open society with a British legal system where international experts can feel at home. Today, Hong Kong is less open and more integrated into the mainland economy.
Some companies, including banks and other financial institutions Hong Kong still sees it as important to its China-centric business model and is digging into the future. Others are looking for a solution. In conclusion, this city has no chance of happening anymore.
“Being in Hong Kong used to be easy,” said Frederik Gollob, president of the European Chamber of Commerce in the city. “This is the first time that businesses talking Do we have to stay in Hong Kong?”
In a survey of members of the American Chamber of Commerce in Hong Kong released last month, 42 percent of 325 respondents said they were considering or planning to leave the city. He cited unease about China̵7;s new security law and pessimistic views on Hong Kong’s future.
Dozens of international companies have moved their headquarters or regional offices out of the city since 2019, government data shows. That contributed to the highest commercial real estate unemployment rate in 15 years, with more than 80% of vacant space surrendered by foreign companies. As data compiled by the Cushman & Wakefield Show, more people—expats and locals—out of business in 2020 than any year since the global financial crisis.
In January VF Corp.
The owner of Timberland, North Face and other brands said it is closing 900 offices in Hong Kong after 25 years in the city, Japanese video game maker Sony Interactive Entertainment. European luxury goods company LVMH said it was relocating some of its staff in Hong Kong from its Moët Hennessy liquor unit. French cosmetics giant L’Oréal said it was relocating some of its staff from its headquarters. in hong kong
Hong Kong advocates predict when the pandemic subsides. Cities will become stronger as their businesses profit from deep integration with the mainland. Pessimists see the industry as a gradual has deteriorated in many key industries that benefit China, such as finance.
Hong Kong’s Commerce Secretary Edward Yau said most foreign companies still believed that Hong Kong was a place to do business. supported by increased opportunities with major Chinese cities. “We will continue to monitor the situation and provide the best assistance we can,” he said at a recent news conference, referring to the American Chamber of Commerce survey.
under China’s long-term plan Hong Kong will become part of the 70 million people in the economic zone. “The bigger bay area,” which includes neighboring tech towns like Shenzhen and Macau’s gambling capital, Stephen Phillips, head of the Hong Kong Investment Promotion Agency, InvestHK, said the deal was It will become an economic engine for growth and a significant business opportunity in the coming years.
He said the biggest problem for Hong Kong is going through the coronavirus epidemic. And China’s new security law for Hong Kong has not had a big impact on business. “Each business makes their own decisions,” he said, “but most people don’t see it as a risk.”
Hong Kong used to establish itself as a bridge between east and west. for some businesses Hong Kong is no longer international enough to serve as a regional headquarters. for others aiming to do business in China The city doesn’t have as much access to the mainland economy as Shanghai.
Denver-based VF is moving a Hong Kong job responsible for sales and marketing in China to Shanghai. They will be close to the major online stores and retailers that are important to the business. The staff responsible for managing the regional network of manufacturers and suppliers will move to Singapore. It is a Chinese and English speaking country of 5.7 million people with a strong business infrastructure. Although Singapore’s laws limit freedom of speech, But there are ways to do free marketing for businesses.
VF said the move reflects changing economic trends and efforts to better serve consumers. It’s not Chinese intervention in the city.
L’Oreal said it was being built in Singapore and Shanghai as it reduced its presence in Hong Kong. The restructuring is designed to make the business more consistent. by creating a Southeast Asia, Middle East and North Africa zone operated from Singapore. and the North Asia region operates from Shanghai.
Sony Interactive and Moët say they have moved some of their employees to Singapore. The pair declined to comment further on their move.
Hong Kong’s transformation accelerated in 2019 with mass protests against Beijing’s interference in the island, which is intended to be largely self-governing under a so-called “one country, two systems” concept, months of clashes between the police. And students have shaken the city’s reputation as a safe and secure place to do business.
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Beijing cracked down on the June 2020 protests and pushed for a national security law that would allow the Chinese government the power to interfere in Hong Kong’s legal system. At the same time, it empowers the secret police to enforce obscure rules, such as against foreign collusion. on friday Thousands of people resisted the massive police presence and threatened jail time in remembrance of the 1989 Tiananmen Square massacre.
After China announced a crackdown South Korean internet search company Naver Corp.
It said it was removing backup servers in Hong Kong and moving to Singapore to protect user data.
Tech companies like Facebook and Alphabet Inc.’s
Google cancels plans to connect Hong Kong and US with undersea data cable After US security officials signaling objection to the plan
At Asian Tigers Hong Kong, a moving company serving international executives. Moves to Hong Kong have declined 50 percent since 2019, while departures have increased 30 percent, said Rob Chipman, chief executive of Americans who moved to Hong Kong in the 1980s.
“I have seen many long-time residents of Hong Kong who have passed away. People like me who came out normally in three years and 30 years later are still here. Love it. Married with kids. Own the business,” Chipman said. “Even some people say, ‘Wait, something’s going on here. It might be time to leave.’ ”
Government figures show About 40,000 Hong Kong residents will leave the city in 2020, more than those who intend to live there. All told, Hong Kong’s population of about 7.5 million is down 46,500 in 2020, the second contraction since being repatriated to China.
Sandra Boch, an Australian mother of two, moved to Hong Kong 15 years ago to set up a specialty fabric and stationery business. Leaving in January Although the unrest in 2019 has brought her business to a halt. But she said the 2020 National Security Act was the last straw. She gathered her business and moved to Singapore.
she said the law “It’s a clear sign from China that they are controlling Hong Kong right now. And everything will be more controlled from that point on. We don’t feel safe anymore.”
British authorities have opened the doors to British passport holders before handing them in for permanent immigration to the UK. And they estimate that more than 300,000 Hong Kong residents, or about 4% of Hong Kong’s total population, are estimated to be more than 300,000 people. It may take more than five years.
Hong Kong supporters predict that companies Closed offices will be replaced by other companies. moving in including from mainland China during the 12 months ending June 3, 2020, the latest available data. Mainland Chinese firms opened 63 new regional headquarters and offices in Hong Kong, up 12% from the same period last year. During the same period, the US company, the largest international company in Hong Kong, It closed 45 headquarters and offices, or 6% of the total, government figures showed.
Lower rents in Hong Kong attract others to come in or expand. InvestHK’s Phillips said Japanese food retailers Don Don Donki and French sporting goods seller Decathlon also expanded in Hong Kong.
Hong Kong continues to be of interest to the financial services industry. with modern market free floating currency and connection to the mainland Hong Kong is therefore unmatched in terms of Chinese financing. Mainland China’s newly minted billionaires are an attractive target for Hong Kong wealth management firms. The massive IPO by the Chinese tech giant puts the Hong Kong exchange ranked No. 3 in the world for that list.
British banking giant HSBC Holdings PLC said last month Feb. to invest $6 billion in Asian business based in Hong Kong Hong Kong is the most profitable market.
Last year, Peter Wong, HSBC’s Asia-Pacific regional head. has expressed support for Beijing’s national security law. After a Hong Kong politician said banks could be punished unless they did. later that year The account freezes about a famous Hong Kong pro-democracy activist who fled the city.
Faced with criticism from UK lawmakers who accused the bank of appeasing China, HSBC Chief Executive Noel Quinn told them the bank had not canceled customers or suspended accounts for political reasons. and reiterating the bank’s commitment to Hong Kong. HSBC declined to comment for this article.
Some big banks, though, are optimistic about continuing to do business in Hong Kong. But it is quietly conducting a state of emergency to determine what they will do if they do not have access to Hong Kong’s infrastructure and must act outside other cities. People familiar with the plan said.
“People ask, can I still do what I want and say what I want?” said Allan Zeman, a foreign-born real estate developer who introduced the current government of Hong Kong and gave his Canadian passport several years ago. As for the passport issued by China, “Yes. I still do whatever I want and say what I want. As long as I choose not to be an enemy.”
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