Many Hong Kong residents are opposed to Beijing's growing influence. Photo / Getty Images
After fleeing Hong Kong for the UK last summer following alleged torture at the hands of Chinese secret police, pro-democracy activist Simon Cheng is getting used to life in Britain. He enjoys watching musicals in the West End, visiting historical sites and even the weather.
"More importantly, I love the political freedom here," he says, two years after he was tortured while on a business trip to southern China. "Now I am reportedly deemed as an exiled pro-democracy activist on the wanted list, hunted by the newly established security police in Hong Kong. The community of Hongkongers in Britain will grow to become an unignorable voice in UK society."
It is not only activists such as Cheng, a former employee of the British consulate in Hong Kong, who have been forced to set up home elsewhere.
Government data shows that more than 89,000 residents have left Hong Kong in the past year, and chief executives of major western businesses have become increasingly concerned about staff working in their Hong Kong outposts.
A crackdown that criminalises anti-government movements, inhibiting free speech and the right to protest with punishments as severe as life sentences, was imposed by Beijing last year while the city's strict quarantine rules have left employees feeling isolated.
The region has a zero-case approach to Covid, with visitors facing hotel quarantine of up to three weeks. American giants JP Morgan and Goldman Sachs have warned that foreign bankers living in the city may soon decide that they've had enough.
"Being restricted in terms of leaving or coming back, the family pressure, that's not a great dynamic for talent," Goldman Sachs chief David Solomon said at an event in Singapore last week. "That's certainly a headwind for global talent."
Concerns about the strict Covid rules have deepened existing fears that the former British colony's future as an Asian financial powerhouse could be at risk following a turbulent few years.
JP Morgan chief Jamie Dimon, Wall Street's longest serving bank chief, flew into Hong Kong on the bank's private jet last week in an attempt to boost morale and thank staff "for sticking it out" after being granted a rare exemption from the rules. The billionaire told reporters in Hong Kong that it was becoming harder to hire and retain talent. "It's tough out there," one insider admits.
Dimon's trip may have boosted some weary bankers, but it has also angered others. His rivals, already furious about Hong Kong tightening its rules earlier this month, are frustrated that the powerful banker got "preferential" treatment for his 32-hour visit last week.
Days after Dimon's visit, Goldman's Solomon said he did not expect to be able to visit Hong Kong or China for "quite some time" due to restrictions. A fleeting trip by Dimon comes months after Hollywood star Nicole Kidman's exemption from the ultra-strict rules sparked public anger.
Among bankers, the sense of unfairness adds to a feeling of growing discontent.
A major financial lobby group warned the Hong Kong government last month that its zero-Covid approach could affect its status as a finance hub. Almost half the group's members are considering "moving staff or functions away from Hong Kong" due to uncertainty over when the rules will be eased.
The American Chamber of Commerce's president, Tara Joseph, has now quit after being unable to influence the measures, arguing that if she returns to Hong Kong from the US she would face three weeks in a hotel and it is not in her nature "to advocate for something and then embark on quarantine like a stooge". Despite calls for change, Hong Kong ended exemptions for senior executives on November 12.
"This is absolutely an issue, not just in boardrooms but for families. A lot of families are now making decisions on where they want to be based on the changing environment. From my network of friends [in Hong Kong], I'm hearing that the mood is pretty grim," says one senior banker who used to work in the city.
"Hong Kong is marching to the tune of China. Singapore is being smart [about attracting business from Hong Kong] - it's not marketing itself, because Hong Kong is doing all the marketing for it."
The struggle is being felt across all sectors. Philip Dykes, former head of the Hong Kong Bar Association, says he is "aware of many barristers, both newly qualified and those with established practices, moving overseas", while Cathay Pacific is considering asking its pilots to live outside of Hong Kong for several months due to the quarantine rules.
The decision comes after more than 100 Cathay Pacific pilots were forced into 21 days of quarantine because they stayed in the same Frankfurt hotel as colleagues who tested positive.
Businesses are feeling the effects of Hong Kong and mainland China's determination to eradicate the virus on a daily basis. Disneyland in Hong Kong was closed for the day last week after one visitor tested positive, while earlier this month workers in hazmat suits flooded Disneyland in Shanghai to swab the 34,000 visitors who were locked inside because someone had the virus.
Pharmacies in China are expected to register the details of anyone buying cough and fever medicine.
Yet not all business leaders are annoyed by the tough stance. Europe's biggest bank, HSBC, is placing all of its bets on further growth in Asia, where it already makes most of its money. It has publicly supported Beijing's controversial security law as well as its unpopular quarantine measures.
As its axis of power shifts it plans to move even more key staff from London to Hong Kong regardless of current friction. HSBC chief Noel Quinn backed China's approach while visiting Singapore with other bank chiefs last week. "It's important for Hong Kong to establish what they need to establish with China on reopening," he told Bloomberg.
"I don't want to do anything that may jeopardise that. I would love to get back to Hong Kong as soon as I can and when the authorities feel it's right for me to go back, I will."
Quinn's comments mirror that of HSBC's finance chief Ewen Stevenson, who argued last month that "plenty of people are happy to move to Hong Kong'' and more senior people will do so over time (though both Stevenson and Quinn remain in London).
It is not surprising that Hong Kong, where HSBC was founded in 1865, is where the bank sees its future. The potential rewards are huge.
According to Goldman Sachs, more than $35 trillion in Chinese household savings will be allocated to products such as securities, mutual funds and wealth management products by 2030. Concerns about life on the ground come amid an industry-wide push in the finance sector to have a bigger presence in the world's second-largest economy.
However, international businesses will struggle to grow if they cannot keep hold of talent. Unease in the city is rising. Amnesty International, the human rights group, is now closing its Hong Kong offices after four decades because of the threat posed to staff by Beijing's security law, imposed on the city last summer to stamp out dissent.
In recent days there have been reports of residents fearing that their comments could be passed on to the police "informers hotline", set up to report behaviour suspected of breaching the national security law. Local journalists have also said that some companies are refusing to give interviews if the cannot have copy approval.
Aware of how much is at stake, businesses do not want to be seen saying the wrong thing and upsetting Beijing. Swiss bank UBS lost a relationship with a Chinese bank and its role on a major bond deal with a state railway company in 2019 because one of its top economists made a comment about pork prices that was interpreted as a racist slur.
Still campaigning for change from the UK, Cheng hopes he can one day return to his hometown. He would like the international businesses desperate to cash in on Asia's rapid growth to stand up to what he argues is an "authoritarian regime". Others are not so sure that they will. Hong Kong's future as a business hub is in doubt.
"Hong Kong's success as a financial hub was in large part due to its strong rule of law, transparency and basic freedoms," says Ben Rogers, co-founder of campaign group Hong Kong Watch.
"As these are increasingly undermined, eroded and dismantled, and as it loses talent as a result of people leaving the city due to increasing repression, its future as an international financial hub must be in doubt. It may instead become increasingly a hub for Chinese Communist Party financing."
- Telegraph Media Group
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