Exodus from Hong Kong could threaten city's global financial situation

A record exodus of Hong Kongers over the past 12 months has raised concerns that Hong Kong's status as a global financial hub may be in jeopardy.

More than 113,000 residents left the territory last year, recording a 1.6% population decline. This is the largest population decline in Hong Kong since records began more than 60 years ago.

From 2020 to 2021, 89,200 people (0.3%) left the city, and from 2019 to 2020, 20,900 people were displaced. The city's population has fallen from 7.41 million in mid-2021 to 7.29 million in mid-2021. Mid-2022, according to the latest data from the Hong Kong Census and Statistics Bureau.

This exodus over the past year was largely due to Hong Kong's strict COVID-19 policies and political unrest, multiple Chinese experts told VOA.

"I'm not too surprised given the extraordinary circumstances of COVID and recent political changes. It certainly creates a different environment," says John Yasuda of Johns Hopkins University. The political science professor said in his VOA his Mandarin interview. He added that the changes have brought a lot of uncertainty to Hong Kong. “Naturally, the financial world doesn't like uncertainty.”

At one point during the pandemic, Hong Kong mandated hotel quarantine for travelers for up to 21 days. Last week, Hong Kong cut the required quarantine period from one week to three.

Following pro-democracy protests in Hong Kong in 2019, Beijing introduced sweeping new national security laws in her 2020. The vaguely worded law criminalizes any act deemed secession, subversion, terrorism, or collusion with a foreign country. These crimes carry a maximum penalty of life imprisonment.

A Hong Kong government spokesperson previously told VOA that the recent population decline was due to a lack of new arrivals in the city.

Liu Pengyu, spokesman for China's Washington embassy, ​​told VOA Mandarin that the national security law is having a positive impact on Hong Kong.

"The lawful rights and freedoms of Hong Kong residents and foreigners living in Hong Kong are better protected in a safer environment," he wrote in an email. He added that many Hong Kongers "believe that the national security law has improved the city's business environment." , was part of an exile that returned to the United States in August 2021 after living in Hong Kong for about 20 years.

Hong Kong's strict COVID-19 policies made it difficult for people to plan their lives, Joseph said, and was worried about the political climate.

Political concerns may be raised by Hong Kong natives as non-citizen residents or people with dual nationality can leave Hong Kong and go elsewhere when they or their employers desire. Excessively heavy on the occupants.

"Many Hong Kongers emigrated or settled in other countries because of the rainy day, and the rainy day has come," Joseph said at VOA. He told The Mandarin.In many cases, "These people are the people who left China to go to Hong Kong in search of the freedom that Hong Kong offers. And now they have had to leave Hong Kong too." It's a big change for people in Hong Kong.”

Joseph previously worked as a Reuters correspondent in Hong Kong. He is currently based in California and in September he will start working for the Freedom Commission in Hong Kong.

Recent outflows include top financial talent moving to places such as Singapore and London, Joseph said, and now replacing them with Hong Kong posts is unlikely. "There is a brain drain and a talent drain from Hong Kong," she said.

International businesses are also quietly leaving the city, according to Joseph, as recent changes have made the city less attractive to do business.

"It's kind of a quiet leak, as opposed to companies standing up and saying, 'We're out of here,'" Joseph said.

As of June 2021, when the Hong Kong Census and Statistics Bureau last reported this data, there were 254 US companies with regional hubs in Hong Kong, compared with 282 in 2020. is in contrast.

Still, scholars such as Johns Hopkins Professor Yasuda and University of California San Diego Professor Victor Shih believe that Hong Kong's status as a global financial center is currently in jeopardy. I don't think

Mr Yasuda is not convinced that major financial institutions are ready to give up on Hong Kong as no other location can match their access to the mainland Chinese market.

"When you're dealing with finance, go where the money is. There's a lot of commotion about politics, but I think it's too early to tell," Yasuda said in his VOA. told to "There is a kind of wait-and-see attitude.

Shih said one reason is that there are many mainland Chinese workers backing Hong Kong's financial sector.

The Kongers could hurt other sectors in Hong Kong, he said. All sectors could remain intact for the foreseeable future.

"Any knowledgeable investor knows in his heart that things are very different these days," he said in his VOA Mandarin interview. "But after all, they want to make money this year."