With the unstoppable rise of e-commerce in recent years, Hong Kong’s reputation as a hub for global companies is growing. However, the flagship of this industry, Alibaba, has no plans to move its headquarters to the city, claiming it is not yet ready to be a global company.
As the world seems to be ever more interconnected, companies are looking at ways to expand their businesses to overseas markets, be it through the acquisition of a partner, a joint venture, or a subsidiary. However, there is a drawback—being based abroad.
The number of global companies setting up shop in Hong Kong is on the rise. There are at least 30 firms from around the world opening up new offices in Hong Kong. Among them, Google has set up its new operations in Asia, and Facebook is on the verge of starting operation in the city. When it comes to the number of employees, there are approximately 55,000 Google employees in Asia Pacific. According to the Hong Kong government’s statistics, there are approximately 300,000 international companies operating in Hong Kong.. Read more about hong kong and let us know what you think.Multinational companies fear for Hong Kong’s future as the best place to do business in China and abroad and are scaling back their operations, disrupting the prospects of one of the world’s leading trading cities. Amid political turmoil, authoritarian repression in mainland China and a pandemic, companies and professionals from around the world are flocking to rival business cities like Singapore and to Shanghai, China’s commercial center that some see as the best place to tap into the country’s vast economy. Since Britain handed Hong Kong back to China in 1997, its leaders have referred to the semi-autonomous territory as Asia’s global city, an open society with a British legal system where foreign professionals can feel at home. Today Hong Kong is less and less open and more and more fused with the mainland economy. Some companies, including banks and other financial institutions, still see Hong Kong as an important part of their China-focused business models and are preparing for the future. Others look at the exit and realize that the city no longer has the prospects it once had. Being in Hong Kong has always been a necessity, says… Frederick Gollob, President of the city’s European Chamber of Commerce. Now, for the first time, companies are discussing the need to be in Hong Kong. In a survey of members of the American Chamber of Commerce in Hong Kong published last month, 42% of 325 respondents said they were considering or planning to leave the city, citing concerns about China’s new security law and a pessimistic view of Hong Kong’s future. Dozens of international companies have moved their regional headquarters or offices out of the city since 2019, government data shows. This has contributed to the highest commercial vacancy rate in the last 15 years, with more than 80 percent of vacant space being leased by international companies, according to available data. Cushman & Wakefield the show. Overall, more people – foreign and local – left the economy in 2020 than in any year since the global financial crisis.
Dozens of international companies have moved their regional headquarters or offices out of Hong Kong since 2019.
Photo: Isaac Lawrence/Agence France-Presse/Getty Images January, VF Corp. owner of Timberland, North Face and other brands, has announced the closure of its Hong Kong office, which employs 900 people, after 25 years in the city. Japanese video game maker Sony Interactive Entertainment has transferred its regional executives to Singapore. European luxury goods company LVMH said it would transfer some Hong Kong employees from its Moët Hennessy spirits division. The French cosmetics giant L’Oréal also announced that it would relocate some employees from its Hong Kong headquarters. Activists in Hong Kong predict that the city will become stronger after the pandemic as business will benefit from deeper integration with the mainland. Pessimists believe that they are gradually losing a number of key industries that are useful to China, such as. for example, the financial sector is languishing. Secretary of Commerce of Hong Kong Edward Yau says most foreign companies still consider Hong Kong as a place to do business, encouraged by the growing opportunities with major Chinese cities. We will continue to monitor the situation and provide the best possible support, he said at a recent press conference, referring to the results of a survey by the U.S. Chamber of Commerce. China’s long-term plan calls for Hong Kong to become part of the Greater Bay Area economic zone, which has a population of 70 million and includes the nearby technology city of Shenzhen and the gambling mecca of Macau. Stephen Phillips, who heads Hong Kong-based investment promotion agency InvestHK, said the colony will be an engine of economic growth and a major business opportunity in the coming years. He said the biggest challenge for Hong Kong was overcoming the covide epidemic, and that the new Chinese security legislation in Hong Kong did not have much impact on business. Each company will make its own decision, he said. But the vast majority don’t see it as a risk. Hong Kong was once a bridge between East and West. Today, Hong Kong is no longer global enough for some companies to serve as their regional headquarters. For those looking to do business in China, this city is not as well connected to the mainland economy as Shanghai.
Hong Kong’s Commerce Secretary Edward Yau said recently that most foreign companies still regard Hong Kong as a place to do business.
Photo: Romeo Gacad/Agence France-Presse/Getty Images Denver-based VF is moving its Hong Kong, China, based sales and marketing functions to Shanghai, where they will be closer to giant stores and online shops important to the company. Employees responsible for managing the regional network of manufacturers and suppliers will be relocated to Singapore, a Chinese and English speaking country with a population of 5.7 million and a strong business infrastructure. Although Singapore’s laws also restrict freedom of expression, the country has an established approach to market economics. VF said the move reflected changing economic trends and efforts to improve customer service, rather than Chinese interference in the city. L’Oréal said it is strengthening its presence in Singapore and Shanghai, while reducing its presence in Hong Kong. According to the company, the restructuring aims to ensure greater commercial coherence by creating a Southeast Asia, Middle East and North Africa zone, managed from Singapore, and a North Asia zone, managed from Shanghai. Sony Interactive and Moët have said that they have transferred some of their staff to Singapore. Both declined to comment on their decision. Hong Kong’s transformation gained momentum in 2019 with massive protests against Beijing’s interference in the island, which was basically supposed to govern itself according to the concept of one country, two systems. Months of clashes between police and students have shaken the city’s reputation as a safe and stable place to do business.
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What do you think about Hong Kong’s future as an international business city? Join the discussion below. Beijing cracked down on the protests in June 2020, passing a national security law that gave the Chinese government the power to interfere with Hong Kong’s legal system, while giving secret police the authority to enforce vague laws, such as those against foreign collusion. Thousands of people braved a massive police presence and the threat of prison sentences on Friday to commemorate the 1989 Tiananmen Square massacre. After China announced the crackdown, a South Korean Internet research company Naver Corp. said it is removing its Hong Kong-based backup servers and moving them to Singapore to protect user data. Technology companies, including Facebook и Alphabet Inc. Google has scrapped plans to connect Hong Kong and the United States via undersea data cables, after US security officials said they disagreed with the plan. At Asian Tigers Hong Kong, a relocation company serving global CEOs, the number of moves to Hong Kong has dropped by 50 percent since 2019, while the number of moves from Hong Kong has increased by 30 percent, the CEO said. Rob Chipman, an American who moved to Hong Kong in the ’80s. I’ve seen many people who have lived in Hong Kong for a long time leave, people like me who came here for an ordinary three-year internship and 30 years later are still here, love the place, are married, have children and own their own business, Chipman said. So even some of these people say: Wait a minute, something’s going on here. Maybe it’s time to go. According to government figures, around 40 000 Hong Kong residents will leave the city by 2020 compared to those who have moved in with the intention of staying. Overall, Hong Kong’s population of about 7.5 million will fall by 46,500 by 2020, the second decline since Hong Kong rejoined China.
Pro-democracy protesters march in Hong Kong in 2019 before Beijing crack down on protests.
Photo: Vincent Tian/Associated Press Sandra Boch, an Australian mother of two who moved to Hong Kong 15 years ago to open a fabric and stationery store, left the business in January. While the turmoil of 2019 disrupted her business, the National Security Act of 2020 was the straw that broke the camel’s back, she says. She packed her bags and moved to Singapore. He said the law was a clear sign from China that it was now taking control of Hong Kong and that things would be even more controlled from now on. We didn’t feel safe anymore. The UK authorities have opened the door for holders of local passports issued before the transfer of UK passports to emigrate permanently to the UK. They estimate that in five years more than 300,000 Hong Kongers – about 4% of Hong Kong’s total population – could come to the country. Proponents of Hong Kong predict that other companies, including those in mainland China, will replace those that have closed their offices. In the 12 months to 3. In June 2020, the latest information available, Chinese companies opened 63 new headquarters and regional offices in Hong Kong, up 12% from the same period a year earlier. During the same period, US companies – Hong Kong’s largest international presence – closed 45 headquarters and offices, or 6% of the total, according to government data. Lower rents in Hong Kong have attracted others looking to set up or expand, said InvestHK’s Mr Phillips. Japanese food retailer Donki and French sporting goods retailer Decathlon have expanded their operations in Hong Kong. Hong Kong remains attractive to the financial services industry. With modern markets, a free-floating currency and links to the mainland, Hong Kong is unrivalled in its ability to finance China. Mainland China’s new super-rich are an attractive target for Hong Kong-based asset managers. A series of IPOs by Chinese technology giants has made the Hong Kong stock exchange the third largest in the world. The British banking giant HSBC holdings PLC announced in February that it would invest $6 billion in its Hong Kong-based Asian business, of which Hong Kong is by far the most profitable market. Last year, the head of HSBC’s Asia-Pacific division, Peter Wong, expressed support for Beijing’s national security law after a Hong Kong politician said the bank could be punished if it did not comply. Later in the year, the accounts of a prominent Hong Kong democracy activist who had fled the city were frozen. Faced with criticism from UK regulators who accused the bank of trying to appease China, HSBC’s chief executive has Noel Quinn. told them that the bank was not abandoning its customers or freezing its accounts for political reasons, and reiterated the bank’s commitment to Hong Kong. HSBC declined to comment for this article. Some major banks are optimistic about continuing their operations in Hong Kong, but are quietly working out contingency scenarios in case they lose access to their Hong Kong infrastructure and have to operate from another city, according to people familiar with the plans. People ask me if I can still do and say what I want. Allan Zeman, a foreign-born property developer who advises the current Hong Kong government and who gave up his Canadian passport in favour of a Chinese one a few years ago. Yes. I always do what I want and say what I want, as long as I don’t want to be the antagonist. Email John Lyons at [email protected] and Francis Yoon at [email protected]. Copyright ©2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
Frequently Asked Questions
Can a Hong Kong company operate in China?
The news of Hong Kong media giant Oriental Daily losing its license to publish its print edition in China is a significant blow to the confidence of Hong Kong-based businesses in the region. It has been a year since the license to publish the paper was granted by the Chinese government to a subsidiary of Oriental Daily, thus, giving the paper a chance to operate in China. It’s no secret that many global companies are looking to move their headquarters out of the US, but one company in Hong Kong might get some flak for locating in Hong Kong. Hong Kong-based Tencent, one of the world’s leading internet companies, is looking to move its headquarters to the nearby city of Shenzhen.
How many foreign companies are there in Hong Kong?
Hong Kong is one of the most sought-after cities within Asia, globally. So why are so many multinational companies looking to leave the country? It turns out, the main reason is the kind of people you can find there. In a recent report by the Economist Intelligence Unit, it found that the average Hong Kong resident is “less skilled and less educated”. This shows that the widely-held view that Hong Kong is a great place for multinationals to do business is no longer valid. A lot has changed in the past decade, and not just in Hong Kong. Foreign companies are now attracted to Hong Kong’s international business environment and its proximity to the US and China. However, while this is exciting, it also raises questions for policymakers. With the government cutting back on foreign investment, will the city lose its attractiveness as a business location, and what will the impact be on the economy?
Is Hong Kong Good for Business?
Hong Kong is a city that has been often questioned. Does it matter to be in Hong Kong? Is it worth its high cost of living? Is it going to be the next New York City? Many people have wondered if being in Hong Kong would be beneficial. Hong Kong is a city known for its beauty and the city has rapidly grown in the last decade. But while the city is growing as a business hub, a recent study shows that Hong Kong is not a good place for businesses to make a buck. The city came in 90th place out of 100 for business friendliness.
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