Half of Foreign Investment Expected to Leave Hong Kong Due to Strict COVID Lockdown

A family departs Hong Kong's Chek Lap Kok international airport on March 6, 2022 as travel restrictions hit Hong Kong's white collar foreign workers hard. (Peter Parks/AFP via Getty Images)

A deteriorating political environment and the dynamic zero-COVID policy are driving foreign investors out of Hong Kong.

The latest survey by the European Business Association in Hong Kong shows that due to the Hong Kong government’s strict pandemic control measures, many of the companies surveyed are considering moving out of Hong Kong either completely or partially within a year, and most international exhibitions originally scheduled to take place in Hong Kong have been cancelled. Moreover, another recent survey by the Hong Kong Civil Research Institute showed that as many as 24 percent of the respondents say they have plans to leave Hong Kong permanently.

Political commentator Simon Lau expressed concern that Hong Kong is losing its advantages because it is cut off from mainland China and at the same time severed from the international community.

Withdrawal of Foreign Capital

The Hong Kong European Business Association released the results of a survey conducted from January to February on March 24, showing that nearly half of the companies surveyed were considering relocating fully or partially out of Hong Kong within a year. Among the 260 companies surveyed, 25 percent said that under the current pandemic control measures, they would consider completely moving out of Hong Kong within one year, 24 percent said they would partially relocate from Hong Kong, 34 percent said they were not sure, and only 17 percent said that they don’t have any relocation plans in the next 12 months. In addition to lockdown measures, 40 percent of the companies surveyed believe that Hong Kong’s quarantine measures for international visitors have made it difficult to attract outside talent to Hong Kong.

The Hong Kong European Business Association pointed out that Hong Kong’s greatest advantage—being connected to the world and adjacent to China—has almost been wiped out because of the city’s zero-COVID policy. The strict pandemic control measures implemented in Hong Kong have serious consequences for both companies and residents, the association said.

Simon Lau, a current affairs commentator and former full-time consultant to the Central Policy Group of the Hong Kong government, said in his YouTube program that the foreign capital exodus is related to the Hong Kong government’s unwillingness to give up the dynamic zero-COVID policy, which led to a sudden isolation from mainland China and the rest of the world without prior notice.

“Hong Kong has become a lonely island,” he said.

Bernard Charnwut Chan, a Hong Kong politician and businessman, and convener of the Hong Kong Executive Council, said on a local TV program that some multinational companies with their Asia-Pacific headquarters in Hong Kong have relocated to Singapore, Dubai, and other countries, because of the COVID-19 pandemic. He believes that there is little chance these companies will move back to Hong Kong in the future.

“If we are to plan for the long run, Hong Kong cannot continue the current quarantine and lockdown policy, because many industries in Hong Kong need to be in line with international standards, and large-scale business activities must be carried out jointly with the mainland,” he said.

International Exhibition Moves to Singapore

The current pandemic control measures have also made it impossible to convene large-scale international exhibitions in Hong Kong. For instance, the organizers of Cosmoprof Asia 2022, BolognaFiere Group and Informa Markets, announced on March 2 that the leading trade show will be relocated to Singapore and held at the Singapore Expo as a special edition from Nov. 16 to Nov. 18.

“The current entry restrictions for travelers to Hong Kong has meant a potential disruption to both exhibitors and visitors for Cosmoprof Asia in November, as inbound travel to Hong Kong is likely to be subject to quarantine restrictions. Hence, the project of Cosmoprof Asia 2022 in Singapore was born,” the organizers stated on Cosmoprof Asia’s official website.

Cosmoprof highly praises Singapore’s vibrant and innovative business environment, and its ability to successfully hold many high-quality events. Singapore is a famous global transportation hub, with direct flights to and from hundreds of cities in the world. Coupled with its strategic location in Southeast Asia, it “creates further excellent business opportunities for our exhibitors and visitors in the region,”according to Cosmoprof Asia’s announcement. This move indicates that Hong Kong’s status as an international financial center is in jeopardy.

Some Hong Kong Citizens Ready to Leave at Any Time

The Hong Kong Public Opinion Research Institute conducted an online survey in late March of 6,723 Hong Kong citizens aged 12 and up, and found that 24 percent of the respondents “plan to leave Hong Kong permanently,” up 4 percent from a similar survey conducted in August last year. In addition, 3 percent of respondents said they were “ready to leave at any time,” and 7 percent said they are making preparations to leave.

Among the respondents who self-proclaim to be “pro-democracy supporters,” as many as 35 percent indicated that they “plan to leave Hong Kong permanently,” while 17 percent of the respondents who self-identified as not supporting democracy said they “plan to leave Hong Kong permanently.”

When asked “Which factor contributed most to your motivation to leave Hong Kong permanently?”most respondents chose “personal freedom” (35 percent). Other respondents chose “the future of family members” (16 percent), Hong Kong’s politics (16 percent), personal standard of living (12 percent), and Hong Kong’s economic prospects (10 percent).

Simon Lau explained in his Youtube program that Hong Kongers can’t travel nowadays, and going to Japan for leisure is important for many Hong Kong residents. “This is not just the hobby of almost all Hong Kongers, regardless of their political preference,” he said. “Even those who do not stand with democratic activists feel that they are losing personal freedom. That’s why they also plan to leave Hong Kong.”

Chung Kim Wah, deputy chief executive of the Hong Kong Public Opinion Research Institute, told The Epoch Times that Hong Kong ’s economic attractiveness is declining while political risk is increasing. That is to say, Hong Kong is no longer capable of wooing new immigrants, but instead, is pushing people out with its current environment.