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Business trends

Hong Kong financial talent flees to Singapore under 'zero COVID' policy

Strict travel restrictions prompt exodus of personnel and business

Hong Kong's travel restrictions are among the strictest in the world.   © Reuters

HONG KONG -- The strict zero COVID policy adopted by Hong Kong has forced international corporations to recruit from a shrinking talent pool, leaving businesses to consider shifting operations to Singapore.

"Hong Kong is in a dilemma," said Ronnie Chan, chairman of major property developer Hang Lung Group. "I understand ... why Hong Kong's government has adopted the zero COVID strategy, since Hong Kong has a deep connection with mainland."

"But meanwhile, Hong Kong is an international city," Chan added, referring to the burdens of the quarantine system. "From the business perspective, it is hard to accept."

The city has one of the lowest case counts in the global pandemic, but as it finds itself increasingly isolated, the China-friendly business community is expressing deepening concern.

Hong Kong's travel restrictions are among the strictest in the world. The only people allowed to enter, in general, are vaccinated residents or foreigners holding visas.

Once inside Hong Kong, a traveler has to quarantine at a designated hotel for three weeks, though the government has decided to shorten that to two weeks, beginning Feb. 5. Passenger planes from eight countries, including the U.S., the U.K., and Australia, are not permitted to land in the territory.

Some specialized professionals and expat workers are beginning to leave Hong Kong. Last year, Hong Kong International Airport logged a net outflow of 160,000 people, in terms of traffic. There were around 15,000 work visa applications in 2021, down nearly 70% from 2019.

"It has been more difficult to move talent from other jurisdictions to Hong Kong. as most candidates do want to stay close to their family ... until things become more clear with COVID" said Loretta Chan, a Hong Kong-based partner at the executive search firm Wellesley Partners.

The zero COVID policy may last until 2024, prompting the biggest exodus of international workers and managers the city has ever seen, the European Chamber of Commerce in Hong Kong reportedly wrote in a draft report. A survey by the American Chamber of Commerce in the city showed that 46% of member businesses cite a decrease in quality staff from a year earlier.

"Many people, especially talents in IT and finance industries, have chosen to work in Singapore instead of Hong Kong, due to greater work exposure and attractive salary increments," said Alison Chang, a Hong Kong headhunter.

Corporations are also giving Singapore a second look, given the city-state's efforts to manage COVID cases while minimizing disruptions to business.

Starting in April, U.S. cruise liner Royal Caribbean will relocate the Spectrum of the Seas vessel's homeport to Singapore from Hong Kong. The company had to suspend a number of tours due to Hong Kong's severe COVID restrictions.

U.S. package deliverer FedEx has shut down its cargo pilot hub in the territory, while British financial group HSBC recently said the executives it recruited to lead its new wealth management unit will be based in Singapore. And Bank of America has started to explore moving part of its Hong Kong staff to Singapore, the Financial Times reported.

According to the AmCham survey, 80% of respondents say Singapore represents the biggest threat to Hong Kong. But prospects for change in the territory have been clouded by political realities.

One lawmaker in Hong Kong's Legislative Council declared that even the suggestion of coexisting with COVID would "disrupt societal order" and potentially violate the territory's national security law. Hong Kong officials said Sunday that while ordinary debate is not unlawful, zero COVID is the best approach toward safeguarding the health and safety of citizens.

Additional reporting by Frances Cheung.

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