Hong Kong’s exodus shrinks workforce in threat to financial hub status

HONG KONG (BLOOMBERG) – Finance executive Tam Sze and her family of four will soon leave Hong Kong, where she has spent her entire life, bound for Melbourne.

The senior manager at an international bank plans to look a job for once she gets there by early next year. Ms Tam is hopeful that she will be able to secure employment in the financial sector just as quickly as her friends who moved to the Australian city.

“Our determination to execute our plan came after what happened in 2019,” said Ms Tam, citing anti-government protests.

She obtained the Australia Investor Stream Visa, which requires an investment of at least A$2.5 million (S$2.4 million). “For the growth of my kids, I decided to give it a try.”

Ms Tam and her family are part of a growing exodus of residents that’s shrinking Hong Kong’s workforce and undermining the economic outlook for the once-freewheeling city.

The population outflow is making Hong Kong age faster, as the departure of younger workers and their children increases the proportion of retirees as a percentage of the population.

Since August 2018, Hong Kong’s labour force has dropped about 6 per cent to 3.75 million people, near a decade-low, according to the latest official figures. In April alone, the total number of employed and those looking for work fell by about 33,700, the most on record based on data going back to 1990.

“Labour force and jobs are what keeps Hong Kong vibrant and its status as a major financial centre,” said DBS Bank economist Samuel Tse.

The former British colony is struggling to revive its role as a global finance and commerce hub in the wake of the pandemic. Travel restrictions have prompted firms to shift staff from Hong Kong to rival hubs such as Singapore.

In the latest sign of a brain drain, a survey by the Hong Kong Investment Funds Association showed more than a third of fund-management companies moved some or all regional and global roles from Hong Kong to other places.

Trying to find talent to replace those who leave is proving hard.

“We have seen massive attrition out of Hong Kong,” American Chamber of Commerce Chairman Joseph Armas said in a Bloomberg Television interview this month. “The attraction of senior executives and senior talent to come into Hong Kong – this has been a struggle as well and is a great concern that we are trying to figure out how to deal with.”

About 121,500 residents departed the city in the year ended June 30, leaving the population at about 7.29 million, according to government data released this month. That means the population fell 1.6 per cent, marking the third straight year of declines and the biggest drop in at least six decades.

The number coming in is dropping rapidly. Hong Kong handed out 32,248 work visas last year, down from 62,155 in 2017, according to the Immigration Department.

Only 5,701 visas were approved for international workers under the General Employment Policy in the first half of this year, compared to 20,314 in the first half of 2018. Visas for professionals from mainland China fell 10 per cent in the same period.