Nearly a third of US companies in Hong Kong are considering shifting part of their business out of the city but only a small fraction expect to leave altogether after Beijing imposed a security law on the territory, reported the Financial Times.
The vast majority, or 76%, of the 183 businesses surveyed by the city’s American Chamber of Commerce in July said they were concerned about the legislation. Fifty-five of the 183 businesses said they were considering moving capital, assets or business operations out of the city. This suggested that while they were scaling back their operations, they would not leave the city and give up their access to the Chinese market. Only 3.8% said they had personal plans to leave in the short term in the light of the law and recent developments.
Richard Harris, founder of Port Shelter Investment Management, said if companies had 60% of their operations in Hong Kong and 40% in Singapore, they might opt to swap that equation around.
“I’m not too surprised [by the survey results] because many businesses are going to think about shrinking down,” Harris said. He added that there could be a “natural erosion” of talent wishing to stay in the territory.