Western Companies Accelerate Departure from Hong Kong Due to China’s Growing Influence
International corporations are increasingly withdrawing from Hong Kong due to China’s expanding control in the region, as reported by the Wall Street Journal.
The number of US companies operating in Hong Kong has declined for four consecutive years, with a total of 1,258 in June 2022, the lowest figure since 2004.
Notably, there are now fewer US corporations in Hong Kong than mainland Chinese companies with regional headquarters, marking a shift in the corporate landscape.
In the past, Hong Kong was considered a relatively low-risk business environment, but this perception has changed.
The introduction of a national security law in 2020, which allows the extradition of individuals from Hong Kong to mainland China and criminalizes acts such as secession, subversion, terrorism, and collusion with foreign entities, has raised concerns.
Combined with China’s purported intensified scrutiny of foreign businesses, an economic slowdown on the mainland, and increasing tension between the US and China, foreign companies are opting to relocate.
Hong Kong, once a favoured destination for Western corporations due to its proximity to mainland China, is now viewed as an extension of China by many.
Australian bank Westpac and other institutions have already moved out, while more, such as National Australia Bank, are reportedly planning to follow suit.
US shipping giant FedEx is relocating some regional jobs from Hong Kong to Singapore, and office furniture maker Steelcase has shifted regional executives to Singapore.
These developments reflect the evolving corporate landscape in response to China’s growing influence in Hong Kong.