According to report, last month, many business leaders, diplomats, and foreign business groups gathered at Hong Kong’s famous M+ art museum for canapés and drinks. Their goal was clear: to make the financial hub more appealing again.
Thousands of people left Hong Kong because of anti-government protests in 2019 and Beijing’s swift implementation of a broad national security law in 2020. This was followed by three years of harsh Covid lockdowns, which hurt the city’s economy and image.
Diplomats and business leaders say that tensions between China and the US and China’s slowing economy have made things harder for Hong Kong and hurt its traditional role as a gateway between the West and the mainland.
“The last few years have created a very negative image of Hong Kong,” said Inaki Amate, chairman of the European chamber in Hong Kong, one of the speakers at the M+ event.
The other speakers included government officials, European Union representatives, and executives from the city’s banks, aviation industry, and the stock market.
The event is one of many that are trying to rebuild ties between the West and the former British colony. Most of the tourists are from the mainland and Asia, and most of the people applying for visas are from China, Amate said.
CEOs say that Hong Kong is changing because more than nine out of ten people accepted to work under government talent schemes are from the mainland.
“If we believe that Hong Kong will be able to recover its most international Asia city status by continuing on this trend, we are very wrong,” said Amate. “Hong Kong needs diversity.”
Finance Secretary Paul Chan went on a marketing blitz tour of European cities in September. In November, Hong Kong’s Monetary Authority is having a high-profile banking conference to show off the city’s “vibrancy” and “show guests the best” of it.
Executives said that many people outside Hong Kong still have a poor view of it.
“For people who haven’t lived in Hong Kong, they see a really battered and negative image that’s been present since the protests in 2019,” said former American Chamber of Commerce President Tara Joseph.
“You’ve got what happened with the national security law, the pandemic, and now you’ve got a pretty big problem with China’s economy. People have a very deeply damaged image, and it’s going to take more than having a banking conference in the Four Seasons hotel to really get people to go, ‘wow, this is exciting.'”
Bad press
A diplomat in the city said that Hong Kong’s efforts to draw top talent hampered by worries about Beijing’s implementation of the security law. They pointed to the bounty on opposition figures as an example of how the law has led to bad press.
“Life is great here, particularly if you are an expatriate. It’s safe, great nature and so much going on, but the image is still very negative,” the diplomat said.
Many people who work in the legal field said that the law has raised concerns about the independence of the courts. Some executives are worried that Hong Kong is becoming less important as companies move to Singapore and Dubai.
Colliers says that over one-fifth of Hong Kong’s office tenants will likely cut back on office space in the next two years, with more than half citing falling business demand as the reason.
Based on a poll by Robert Walters in September, more than half of workers in Hong Kong are thinking about or planning to leave the city.
Because of the lack of business, many banks and lawyers have been fired, and companies like National Bank Australia have left Hong Kong.
“Hong Kong is a barometer of the economic activities in China,” said Patrick Ip, managing director at China-ASEAN Investment Cooperation Fund. “Because of the recent China economic downturn and regulatory policy changes in some key sectors, the capital market is suffering due to weak investment sentiment.”
Hong Kong’s IPO market has slowed down. So far this year, only about US$2.7 billion has been raised, compared to US$4 billion last year and at least US$35 billion at the market’s peak during COVID-19.
A top banker said it is harder to set up Asia-Pacific funds, including China because people worry about the country’s political and economic fate.
Overall, the number of visitors is 70% of what it was before the pandemic. Visitors from mainland China are returning to normal much faster than visitors from Europe and the US.
Author of “China & Europe: The Turning Point” and investor in Hong Kong, David Baverez, said the city will change and do well as money comes in from the mainland and the Middle East to replace money from the West.
“Old Hong Kong is not back,” Baverez said. “A new Hong Kong will emerge. It will continue to thrive but only because it succeeds in reinventing itself.”
According to report, last month, many business leaders, diplomats, and foreign business groups gathered at Hong Kong’s famous M+ art museum for canapés and drinks. Their goal was clear: to make the financial hub more appealing again.