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Hong Kong security law

Hong Kong's population outflow accelerates amid crackdown

City marks first midyear drop since SARS following national security law

A man waves to his family members before departing to United Kingdom at the Hong Kong International Airport in Hong Kong in June. Hong Kong's population dropped 1.2% from a year ago.    © Reuters

HONG KONG -- Hong Kong has hemorrhaged residents at a faster pace since a national security law was imposed by Beijing last June, according to official data released Thursday.

The city's population was 7,394,700 at the end of June, down 87,100, or 1.2%, from a year ago, according to a provisional estimate released by the Census and Statistics Department.

This marks the first drop in population at midyear since 2003, when the territory was recovering from a deadly outbreak of severe acute respiratory syndrome, or SARS.

The biggest cause of the drop was the net outflow of 75,300 people. In all, 89,200 residents left Hong Kong, but this was offset by an inflow of 13,900 from mainland China by the so-called one-way permit (OWP). The natural decrease was 11,800, where deaths exceeded births.

The latest population statistics capture the period between the end of June of last year and this year, the first yearlong span since the imposition of the national security law. The law prescribes criminal penalties of up to life imprisonment for those found guilty of separatism, subversion, terrorism or collusion with foreign powers.

The same midyear statistics published a year ago reported a net inflow of 1,200, where the outflow of 20,900 was outnumbered by an inflow of 22,100 from mainland China via OWP.

The OWP is a legal arrangement that allows mainlanders to enter Hong Kong mainly to reunite families and reside in the territory legally. Since the city's sovereignty was handed over from the U.K. to China in 1997, at least 1.5 million people have moved from the mainland to Hong Kong.

The Hong Kong government played down the significance of the data.

"Net movement, which includes the movement of Hong Kong residents into and out of Hong Kong for various purposes including work and study, is conceptually different from immigration and emigration," a government spokesperson said in a statement Thursday. As Hong Kong is an international city, its population "has always been mobile."

The pandemic is also being blamed as a possible culprit of the population movement out from the territory. "Hong Kong residents who had left Hong Kong before the pandemic may have chosen to remain outside Hong Kong or cannot return to Hong Kong due to flight unavailability," the spokesperson said.

However, other official data also shows an accelerated exodus from the city.

The annual report issued by the Mandatory Provident Fund Schemes Authority, a statutory body which administers the city's de facto retirement pension scheme, on Thursday said total withdrawals on grounds of "permanent departure from Hong Kong" amounted to 6.57 billion Hong Kong dollars ($844 million) during the last fiscal year that ended March. This was 27% more than the previous fiscal year, marking the highest level of withdrawals for this reason since records began in 2014.

In nine-month period since last July -- immediately after the imposition of the national security law -- withdrawals from the Mandatory Provident Fund for permanent departure were HK$5.576 billion, a 35% jump from the same period a year ago.

A woman hugs with her friend before departing to United Kingdom at the Hong Kong International Airport in Hong Kong in June.   © Reuters

Earlier data had highlighted the real impact of people leaving the city.

A quarterly survey by the Japanese consul general, the local office of the Japan External Trade Organization (JETRO) and the Hong Kong Japanese Chamber of Commerce and Industry last month showed that of the 43 respondents who said they were feeling negative impacts from the national security law, 17 said this was because employees had emigrated from Hong Kong. Two others said clients or business partners had left the city.

Tomohiro Takashima, director general of JETRO Hong Kong, said this was the first time the corporate survey had drawn so many responses on this topic. As the results pointed to employee losses in such sectors as finance, electronics and precision equipment, he suggested that "people with portable qualifications and skill sets are leaving."

Scenes of families flying out of Hong Kong's airport have become frequent, especially in the summer when the local school year ends. The government's tightened control over school textbooks, the curriculum and teaching has become a major concern for parents with school-age children.

According to Hong Kong's leader, Chief Executive Carrie Lam, two of the five specific directives handed down to her in early July to "deepen" the implementation of the national security law by Xia Baolong, the Beijing's Hong Kong policy chief, were on education. The guidance, supervision and regulation of schools and universities were to be enhanced, while national security education in schools and universities was to be promoted.

On Tuesday, Hong Kong Professional Teachers' Union (PTU) announced it would dissolve, citing mounting pressure from authorities. The territory's largest teachers union -- and a stalwart of the city's pro-democracy movement -- had been under heavy attacks from the city's pro-establishment leaders and most recently by Beijing. Both the People's Daily and the official Xinhua News Agency published articles condemning the organization last month, labeling the PTU as a "malignant tumor" that needs to be "exterminated."

Alicia Garcia-Herrero, Asia Pacific chief economist at French bank Natixis, wrote last month that emigration is "one of the lingering concerns" for Hong Kong's economy going forward, as it could "affect the talent pool and exert pressure on property prices, especially accompanied by capital outflows."

Although she has found "little evidence to support the worries that emigration has materially hit Hong Kong's economy," at least in terms of housing prices and financial stability, she said "one cannot be certain whether Hong Kong will face more migration and capital outflows beyond other structural problems, such as home affordability and aging."

She warned the consequences "may approach slowly but the impact can be large."

Additional reporting by Takeshi Kihara and Stella Wong

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