Goodbye Hong Kong: Uncertainty forces some to consider leaving

Some businesses reconsider investments as protesters keep up the pressure against a proposed extradition law.

A protester is seen holding a steel pipe trying to break the glass outside Legco in Hong Kong, China. 1 July 2019. Hundreds of protesters gather outside trying to break the glass of Hong Kong''s mini-
Protesters against a proposed extradition bill in Hong Kong want it officially withdrawn, saying it could damage Hong Kong's economic strength in the long term [July 1: Vernon Yuen/NurPhoto/Getty Images]

Hong Kong, China – John, a 20-year-old student, is anxious, both about the future of his native Hong Kong and his role in it. So much so, that he’s considering leaving the Chinese territory for good.

John, who asked Al Jazeera to change his name to protect his privacy, was among the nearly two million people who took to the streets on June 17 to protest against the Hong Kong government’s plan to pass a bill that would have allowed suspects to be extradited to the Chinese mainland.

Hong Kong’s Chief Executive Carrie Lam has declared the proposed extradition bill “dead” but many Hong Kongers aren’t convinced it is and have promised to keep on fighting against it. There were more protests on Saturday and Sunday, these more violent than earlier demonstrations.

The whole episode has exposed fault lines in Hong Kong society and potential weaknesses in its economy as some companies reconsider investment decisions.

John plans to go to university in the United Kingdom but is uncertain about where he will end up after he graduates.

“I don’t think I’ll stay in Hong Kong, but I don’t know about the UK either,” he told Al Jazeera.

Many Hong Kongers saw the proposal as a sign of the growing influence of Beijing and the erosion of Hong Kong’s semi-autonomous status that has made the territory prosperous. Beijing denies it is interfering in Hong Kong’s affairs.

There are no official statistics, but anecdotal evidence suggests a small but growing number of people are now considering either leaving Hong Kong or investing in property overseas to secure their economic future beyond Beijing’s grasp.

Greener pastures

Some of the indications that Hong Kong citizens are looking for greener pastures can be found abroad, in particular from the real estate industry.

Canada’s Vancouver has long been a popular destination for Chinese people. According to the city’s 2016 census, more than 15 percent, or about 385,000, of the city’s people speak a Chinese language. Roughly half speak Mandarin, the predominant language of mainland China, while the other half are Cantonese speakers – mainly from southern China and Hong Kong

Real estate brokers in Vancouver say they’ve seen an increase in the numbers of Hong Kongers expressing an interest in properties in recent weeks.

“There are an estimated 30,000 Hong Kongers holding Canadian passports who are returning now,” Akira Wang, a Vancouver-based realtor with Oakwyn Realty, told Al Jazeera.

And there could be even more Hong Kongers joining them soon. Canadian immigration figures show the government issued permanent residency permits to 1,360 Hong Kong citizens each in 2016 and 2017. That number rose to 1,525 last year, and for 2019 until the end of May, another 570 Hong Kongers were given the permits.

It’s a similar story across the other side of the Atlantic Ocean. Estate agents in London are also seeing more Hong Kongers keen on buying properties there.

“Hong Kong investors are extremely shrewd and for a long time now have been some of the most prolific outbound sources of Asian capital,” James Beckham, head of central London investment at CBRE, told Al Jazeera.

“Buyers from Hong Kong are continuing to take the opportunity to step into the London market, attracted by the capital’s strong fundamentals which remain very attractive particularly when there are some challenges within Hong Kong itself,” said Beckham.

Protesters march through the Sha Tin District in Hong Kong, Sunday, July 14, 2019. Opponents of a proposed Hong Kong extradition law have begun a protest march, adding to an outpouring of complaints
Opponents of the proposed Hong Kong extradition law have also used the marches to complain that the territory’s pro-Beijing government is eroding its freedoms [July 14: Kin Cheung/AP]

Meanwhile, migration agents in Hong Kong concur that they have also seen an increase in the numbers of people considering leaving the territory for good.

A consultant at John Hu Migration Consulting, who asked not to be identified, said the uptick over the past few weeks has been noticeable.

“The most popular places we are asked about is for Canada and Australia, which are more politically stable countries,” the consultant said.

Real estate, retail exposed

Analysts say the impact on Hong Kong’s economy could be significant if the trickle of people leaving turns into a flood, especially if companies decide to relocate.

“I think it is reasonable to believe that the current uncertainty about Hong Kong’s future could lead some risk-averse people to delay decisions about big investments like real estate,” Jay Milliken, senior partner and Asia regional lead at consulting firm Prophet, told Al Jazeera.

“On the corporate side, Hong Kong could be greatly affected by decisions to relocate corporate offices. If companies are concerned about instability in Hong Kong, they could choose to put their Asia headquarters in other markets like Singapore,” added Milliken.

Hong Kong’s vibrant retail sector could feel the brunt of recent events.

Consultancy firm PwC recently lowered its forecast for retail sales in Hong Kong this year. The firm says it now expects a five-percent drop, compared to an earlier outlook of a three-percent fall. This would be a reduction of about 460 billion Hong Kong dollars  ($58.9bn).

The Hong Kong government’s attempt to push through the extradition bill, and the protests in response, have polarised Hong Kong society, dividing opinions even within families.

Student John says his parents are divided over the issue. He says his mother attended some of the protests and is considering leaving Hong Kong, while his father is staunchly “pro-China”. “In light of the recent developments, many relatives have expressed the desire to move. Relatives who do not have a UK passport are thinking of Taiwan, Malaysia and Thailand.”

At least one company that took a stand in support of the government has paid the price for its decision with a backlash on social media.

Students from the Chinese University of Hong Kong who set up a campus grocery shop, CUStore, said on Facebook that they were terminating their deal with online supermarket startup Ztore, accusing the company’s founder of supporting the extradition bill.

“Hong Kong is at a most critical point at the moment. If the amendment bill is passed, the future of Hong Kong will be wrecked. There will be profound effects on the local manufacturing industry,” CUStore’s founders wrote.

That may seem like a fairly trivial dispute in Hong Kong’s $363bn economy. But the proposed extradition bill also resulted in divisions on the board of conglomerate Goldin Financial.

Last month the company decided to pull out of a $1.4bn acquisition of government land for development. In a statement to the Hong Kong Stock Exchange, the company said a majority of its board members “considered the occurrence of recent social contradiction and economic instability would have negative impact on the growth of Hong Kong commercial property market”.

However, Goldin’s chairman “strongly” disagreed, the company said.

But some analysts say Hong Kong’s economy will most likely survive the recent upheavals, and could even emerge the stronger for them.

Hong Kong protests
The protests in Hong Kong have resulted in dozens of arrests and injuries [July 2: Anthony Wallace/AFP]

“I can’t see them having any immediate effect – this is a political struggle, not an economic one,” Simon Cartledge, author of  A System Apart, which traces Hong Kong’s economic, social and political relations with China over the past two decades, told Al Jazeera.

“But you might hope that they have some kind of effect on longer-term policy making – making the government rethink its policies on land, housing, welfare and continuing to funnel resources to a small group of already way over-privileged businesses.”

Duncan Innes-Ker, Asian Regional Director at the Economist Intelligence Unit (EIU), told Al Jazeera that he also believes Hong Kong’s economy is resilient. But he says the risks are mounting.

“Risks to this outlook are building as the government encroaches on the freedoms and judicial independence that served as the foundation of Hong Kong’s prosperity,” said Innes-Ker. “Meanwhile, there is a growing threat of more dramatic intervention from the Beijing government to reassert control over the territory’s restive population.”

Source: Al Jazeera