More than 1 million protest in Hong Kong, organizers say, over Chinese extradition law

Hong Kong fights for finance hub status as talent flees​

Edward Wong cannot forget the moment when he no longer felt safe in the city where he grew up. The 53-year-old businessman from Hong Kong was stopped and searched by the Chinese authorities when he flew into Shanghai on a work trip in late 2019.

“They took me into a room, emptied my backpack and searched everything,” Wong tells AFR Weekend this week from his new home in London after leaving Hong Kong in April. “That included a body search. They plugged a machine into my mobile phone to download everything. They took my picture and said they were opening a file on me.”
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People queue up to check in for flights to the UK at Hong Kong airport in June. (AP Photo/Vincent Yu)

Wong could not work out what he had done wrong. He was a law-abiding citizen who ran a successful business and had never been in trouble. He was never directly involved in the mass protests in Hong Kong that year, although he once spoke to a journalist from the sidelines of one of the city’s mass protests that year, which he suspects tweaked Beijing’s interest.

Wong was rattled when he returned to Hong Kong from the trip. He no longer felt safe in the city where he was born and started having trouble sleeping. He became concerned the Chinese authorities were watching him and that he could be arrested at any time.

“I needed to take sleeping pills to sleep for half a year. It really affected me mentally and physically,” he says.

Wong realised he had to leave. With good previous experience living overseas and being eligible for Britain’s BNO (British Nationals Overseas) passport scheme, he was one of the lucky ones. Wong says he had been thinking about moving since the protests started in June 2019 as he realised Hong Kong was changing dramatically under Chinese rule but had been reluctant to leave his elderly parents. He says he misses Hong Kong but can at least sleep well at night in London.

“At least you have the right to say what you think and what you feel. I go to protests here in Leicester Square. But I won’t put those pictures on Facebook. Even though I am in another country, I still feel scared.” Wong’s full name was changed for this story to protect his identity.

He is one of the tens of thousands of Hong Kongers abandoning the city because of concerns about their freedoms under China’s national security laws. Hundreds of people have been arrested in the past year. The British authorities say almost 65,000 people have applied for a BNO visa.

At the same time, proposed changes to the education system mean many parents want their children educated elsewhere, free from the shackles of patriotic curriculums spouting Communist Party propaganda.
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Protests disrupted Hong Kong for much of the second half of 2019. Bloomberg

“My kids are going to go to school in Melbourne now. It’s sad to leave but I didn’t want them educated under that system,” says a former top Hong Kong company executive who had Australian citizenship and could move to Victoria last year.

Government data shows more than 89,000 residents have left in the past year, making up 1.2 per cent of the city’s population that is now estimated at 7.4 million.

Hong Kong has previously experienced waves of mass emigration during sensitive periods in its history, including in the lead-up to the 1997 handover to China and after the 1989 Tiananmen Square massacre. Many of those who left later returned. But the exodus over the past year is the biggest so far and many say they will not come back this time, given they believe China is unlikely to change.

“Xi Jinping has to make a difficult choice because Hong Kong is still very important to China in terms of attraction of foreign capital and the generation of foreign exchange for China,” says Willy Lam, adjunct professor at the Chinese University of Hong Kong’s Centre for China Studies. “At the same time he wants tight control of Hong Kong similar to Tibet and Xinjiang.”

Last week Hong Kong police arrested the leaders of a group that used to organise an annual rally to commemorate the 1989 Tiananmen Square massacre. The arrests followed the closure earlier this month of the company that owned the outspoken newspaper Apple Daily.

Finance wheels keep turning​

But while there are almost daily stories in the international media about the latest crackdown by the authorities in Hong Kong, life is relatively normal in the glass towers of the city’s financial district overlooking Victoria Harbour.

Bankers say business is booming and the exodus of talent does not include those making a bundle from the huge amounts of capital still moving in and out of the city, which is still seen as the international gateway into China.

Government officials say they are not worried about the exodus, which they say is unusually high because of the visa scheme being offered by the British government for BNO passport holders. That scheme meant some Hong Kongers were taking advantage of an opportunity to emigrate even if they were not worried about the political situation.

Hong Kong late last month launched an international talent attraction program in a bid to improve the city’s image after years of political upheaval and lure global talent back to the city.
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Hong Kong official Bernard Chan is confident the city can attract international talent despite the exodus. Michael Perini.

“Yes, there are people leaving,” Bernard Chan, a senior adviser to the city’s leader Carrie Lam, tells AFR Weekend. “It has happened in the past. In my adult life, I remember at least three rounds of a so-called brain drain, and Hong Kong survives after each one.

“The real challenge is, can we replenish with even better talent to help Hong Kong? That is the key.”

Chan, the convener of the Executive Council, which is the city’s defacto cabinet, and a prominent businessman, says Hong Kong will remain attractive as a finance hub and will be able to continue to lure professionals because of its low tax rate. Officials also hope that talented professionals of Asian descent tired of the racism some have experienced in countries such as Australia and the United States since the pandemic erupted, may also want to move there.

COVID-19 threat​

Chan says the present biggest threat to Hong Kong’s finance hub status is not China but COVID-19. The city is expected to maintain strict border controls, which include three weeks of hotel quarantine for those from many countries, in the short term as it pursues a zero-case strategy. He says some Chinese companies have relocated to the mainland during the pandemic and life is difficult for expatriates and business travellers.

However, the majority of the population are happy to keep borders closed for now.

“We are a so-called hub, and the definition of a hub means people coming in and out,” Chan says “This is a dilemma. But when you have full control (of the virus), politically it would be a disaster for anyone to say, for the sake of business travel to return, we have to take some risk.

“The national security law has made very little dent to Hong Kong’s status. All the financial companies made tonnes of money in Hong Kong last year, so that has not impacted them at all. But COVID, yes, this is the dilemma.”

Australians living in Hong Kong are frustrated with the tight border controls and some are concerned about the political mood. However, there is no sign of Australian companies headquartered there moving offshore.

“Australians have been in Hong Kong for a long time and have really influenced the financial systems here, asset management and legal,” says Sue Kench, the Hong Kong-based global managing partner of King & Wood Mallesons. “You don’t want to give that up.
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A Hong Kong Police Force guard of honour raises the flags of China, front, and the Hong Kong Special Administrative Region. Bloomberg

“For any financial institution, how can you have a world view without having a China view? Hong Kong gives you that view. Yes, it will remain for quite a time a centre of capital.”

Australians such as Kench have no intention of leaving. But others, particularly those who feel their political views will not be tolerated by Beijing or are worried about getting their capital out of the city, are heading for the departure gates.

While the Morrison government has offered Hong Kongers already in Australia extended visas, there is no plan to go down the UK route and offer a residency path to thousands. Home Affairs data shows the total number of Hong Kongers who made a lodgement for protection visas was relatively low at 12 in June this year and 23 in May.

Monika Tu, the founder and director of real estate concierge firm Black Diamondz Group International, says she has seen a 30 per cent increase in inquiries for luxury properties from Hong Kong in the past year. However, many of these are expatriates or Hong Kong people with Australian citizenship looking to return rather than political refugees. “The market is fantastic at the moment,” she says.

While Hong Kong may never be the same again, it is still likely to retain its appeal as a capitalist haven even as China seeks to bolster the status of mega-cities such as Shanghai and Shenzhen.

“The question is, can we attract people to come back? China clearly wants to keep the one country, two systems as it is. They don’t want Hong Kong to be just another city in China,” Chan says.