Scott Murdoch and Kane Wu

HONG KONG, (Reuters) – Tania Sibree left her high-paying job in Hong Kong as a financial service lawyer and moved to Australia instead of living with Hong Kong’s coronavirus restrictions.

Sibree, who said she had enjoyed the previous five years in Hong Kong, is one of hundreds – possibly thousands – of foreign expatriate professionals who have left or are planning to leave, threatening to dent the city’s standing as one of the world’s financial hubs.

“The hotel quarantine made traveling difficult and this was why we chose Hong Kong. We were close to our family, and I was able to see my parents. “But you can’t do that for as long with your kids in hotel quarantine,” she stated. Everyone had believed that the restrictions would be removed, and things would improve. It wouldn’t continue for too long.

Hong Kong only has about 13,000 coronavirus cases out of its 7.4 million population. This is much less than other places around the globe. The Chinese territory, however, is not adapting to the virus and following Beijing’s zero-COVID policy.

Since 2002, it has been subject to strict quarantines. The city also introduced the toughest entry restrictions in the entire world last year. Only residents are permitted to return and there is a mandatory quarantine at the hotel for all visitors from any country. 

However, “zero COVID” is no closer – 140 new infections were reported in Hong Kong on Sunday – and there are no signs of the government easing those restrictions. According to headhunters, executives in the industry, many expats have begun thinking about leaving. Global banks, corporate lawyers, and asset managers are now facing the possibility of losing their employees after they receive annual bonuses for the first three months.

One capital markets banker stated that the summer in Hong Kong would be the moment when most people give up and decide to throw the towel in. It’s better to be based in Singapore as a banker than you are right now. It is possible to travel. If you have to, you might consider going to Hong Kong to do quarantine.

According to the American Chamber of Commerce Hong Kong survey, more than 40% of respondents said that leaving Hong Kong was more probable. The majority cited travel restrictions abroad as their main reason.

There is an insufficient supply of skilled talent for the most rapidly growing area of wealth and asset management. Tara Joseph (president of the chamber) said that the problem with talent will only get worse if there are undefined travel restrictions for a long period. Many in the industry expect the sector to eventually be dominated by talent from China, which will lead to significant talent shifts.”

The government of Hong Kong has resisted any threat to its talent. The government stated that fighting the coronavirus is its number one priority for the benefit of all residents of Hong Kong and it would invest in talent to offset any potential loss of knowledge or damage to the city’s status as a financial center.

    “We believe that Hong Kong will continue to bring together talents from local and international sources,” a government spokesman said. “The government will promote diversification in the financial sector and foster local talents to attract international talent to help with long-term development for the Hong Kong economy.”

RUN FOR THE DOORS

Hong Kong’s population declined 1.2% between mid-2020 and mid-2021, with more than 75,000 people leaving the city, according to Hong Kong’s Census and Statistics Department. Data from Hong Kong’s immigration department shows that Hong Kong has seen five consecutive months with net outflows in travel since September.

The number of applicants for visas from any country under the general employment policy fell by three percent to 10,073. The 23% decline in financial service sector applicants was also noticeable.

John Mullally (regional director for southern China and Hong Kong at Robert Walters) stated that “the proposition of bringing people to Hong Kong isn’t happening.”

    “The only people willing to do it are the international or very senior executives or very young people without families,” he told Reuters. If you examine the city, it is clear that the talent pool for financial services has been shrinking.

Christian Brun is chief executive at Wellesley Recruitment.

“We’ll see more high-ranking banking executives from Singapore.” “Many people, given the opportunity to choose where they want to live,” he stated. It’s something we have witnessed with private equity and hedge funds, but it will be the same for banking.

Officials in the financial industry are less sanguine. They believe that Hong Kong will still be attractive to Chinese firms and rich individuals, as long as there is a low rate of tax, market freedom, and rule-of-law.

The city’s international feel will be affected. “It will continue to boom,” Kenneth Gaw from Gaw Capital Partners said during a conference this month.

Hong Kong Monetary Authority (the city’s central bank) stated it is aware of potential pandemic threats to financial institutions. However, they said that these should not be permanent and the foundations supporting Hong Kong’s global status would continue to hold strong.

According to Hong Kong’s Securities and Futures Commission, the number licensed businesses and people operating in Hong Kong had been growing through the last year. It said this demonstrates its appeal.

Yet, expats do not wait for the outcome to unfold.

An international research firm’s financial analyst told Reuters that he calls Hong Kong his home since 2005. He has waited for Hong Kong’s international borders opening to allow him to see his loved ones and family.

However, there was no indication of any change. He stated that he will be returning to the United States during the second quarter.

He stated, “Basically we must see our family and there’s no end in sight for travel restrictions or a roadmap.” You will eventually realize that you cannot wait and move is the only way to go.