Hong Kong’s draconian COVID-19 measures benefits Singapore’s financial services

In late 2021, Tania Sibree decided to quit her well-paying job as a financial services lawyer in Hong Kong and returned to Australia rather than live a moment longer in the Chinese city.

Sibree is one among possibly thousands of foreign expatriate professionals who have left or are planning on leaving Hong Kong.

“The hotel quarantine made it just so tough for people to travel and that was the big incentive to being in Hong Kong, it was close to home and my parents. But you cannot do that long in hotel quarantine with kids,” said Sibree. “Everyone had been thinking the restrictions would be lifted, it would get better and it would not go on for so long.”

Of a population of 7.4 million, Hong Kong reported that only 13,000 people being infected with the Wuhan Coronavirus, much lower than most places in the world. But following Beijing’s draconian “zero-COVID” policy, stringent quarantines restrictions have been imposed in the city.

China’s quarantine rules are the strictest entry rules in the world, allowing only residents to return to the city and requiring them to undergo mandatory hotel quarantine of up to three weeks for arrivals from most countries, regardless of vaccination status; the mandatory hotel quarantine must be borne by the travellers themselves.

On Sunday, Hong Kong reported only 140 new infections, and yet the government in Hong Kong did not ease up on restrictions. No wonder the number of expats wanting to leave the city are growing.

Many global banks, corporate law firms and asset managers are seeing many of their staff leaving Hong Kong after receiving their annual bonuses, said industry executives and headhunters.

“The summer in Hong Kong will be the time when many people will throw in the towel and think to themselves ‘This is just untenable’,” said a capital markets investment banker on the condition of anonymity. “As a banker right now you’re much better off being based in Singapore. You can travel, and once or twice a year you could bite the bullet and come to Hong Kong and do the quarantine if you need to.”

According to the results of a survey conducted by the American Chamber of Commerce in Hong Kong, more than 40% of members recently surveyed said they were more likely to leave Hong Kong, with most citing international travel restrictions as the leading factor.

“For the fastest growing sector of wealth and asset management there is a lack of trained supply of talent. If draconian travel restrictions continue for an undefined and lengthy period, the talent issue will become all the more serious,” said Tara Joseph, president of the chamber. “Many in the industry also expect that eventually many jobs in the sector will be taken up by mainland Chinese talent, leading to a big talent shift.”

China’s government in Hong Kong has downplayed the looming talent crunch saying, fighting the coronavirus was its top priority.

“We believe that Hong Kong will continue to bring together talents from local and international sources,” said a government spokesman. “The government will continue to promote diversified development in the financial sector, foster local talents and attract foreign talents in various aspects to tie in with the long-term development of the Hong Kong economy.”

Exodus

Between mid-2020 and mid-2021, the population in Hong Kong declined by 1.2% with more than 75,000 people leaving the city, as per Hong Kong’s Census and Statistics Department. Since September 2021, Hong Kong has had five months of consecutive net outflow in travel, immigration department data shows.

The total number of visa applicants from all countries under the ‘general employment policy’ also fell by a third last year to 10,073.

Applicants for the financial services sector were down 23%.

“The proposition of bringing people into Hong Kong is not happening,” said John Mullally, the regional director of Robert Walters.

He went on to add, “The only people willing to do it are the international or very senior executives or very young people without families When you look at the city, the financial services talent pool is definitely getting smaller.”

“We will start to see more senior banking executives based in Singapore. Many people given the choice would now prefer to base themselves there,” said Christian Brun CEO of Wellesley, a recruitment firm.

“We have seen that already with hedge funds and private equity and we will see it with banking too,” said Brun.

According to the Hong Kong Monetary Authority, it was aware of pandemic-related challenges facing financial institutions in the city, but said these pains is “transitory” and that the fundamentals underpinning Hong Kong’s status as a global financial hub would remain strong.

Nevertheless, many expats are not waiting to see how things unfold.

According to a financial analyst at a global research group who used to see Hong Kong as his home, he has been waiting for the city’s international borders to open so he can see his family and friends, but with no sign of a change, he has decided to move back to the United States in the second quarter.

“Basically, we need to see our families and there is no end in sight to travel restrictions, no roadmap or plan,” he said. “Eventually you quit waiting and realize moving is the only option.”



Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Strategy

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