Businesses are eyeing the exits in Hong Kong as it becomes less open and more fused to the mainland China economy, The Wall Street Journal reported Sunday.
"Being in Hong Kong always used to be a no-brainer," European Chamber of Commerce Chairman Frederik Gollob in Hong Kong told the Journal. "Now, for the first time, businesses are having discussions around, do we need to be in Hong Kong?"
Among the causes are political change, control at the hands of China, and the global coronavirus pandemic, according to the report.
American Chamber of Commerce in Hong Kong found 42% of 325 of it members said they were at least considering getting out of the city amid the uncertainty.
"We will continue to monitor the situation and provide the best help we can offer," Hong Kong Commerce Secretary Edward Yau said at a recent press conference when asked about the polling data.
Hong Kong has seen its highest rate of commercial vacancies in 15 years, including 80% attributed to international companies, according Cushman & Wakefield data.
Among the companies withdrawing are, according to the Journal:
- VF Corp. shut down a 900-person Hong Kong office after 25 years.
- Sony Interactive Entertainment moved regional executives to Singapore.
- European luxury-goods company LVMH will relocate some Hong Kong-based employees from its Moët Hennessy liquor unit.
- L'Oréal will relocate some staffers from its Hong Kong headquarters.
Asian Tigers Hong Kong CEO Rob Chipman, who moved to Hong Kong from the U.S. in the 1980s, noted moves into Hong Kong with his relocation firm declined by 50% in 2019, while moves out increased 30%, according to the Journal.
"I saw a lot of longtime Hong Kong stayers who were leaving, people like me who came out for a usual three-year stint and 30-years later are still here, loving it, married with kids, owning businesses," Chipman told the paper. "So even some of those people are saying, 'Wait a minute, something's going on here. Maybe it's time to leave.'"
The 7.5 million Hong Kong population shrank by 46,500 in 2020, the second contraction since it was returned to China from Britain in 1997.
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