Hong Kong’s financial sector faces talent shortage as expats head out

HONG KONG, Jan 24 (Reuters) – Late last year, Tania Sibree quit her well-paying job as a financial services lawyer in Hong Kong and returned to Australia rather than live one more time with the city’s strict coronavirus restrictions.

Sibree, who said he enjoyed the previous five years in Hong Kong, is among hundreds, if not thousands, of expatriate foreign professionals who have left or plan to leave, threatening to damage the city’s position as the one of the world’s financial centers.

“The hotel quarantine made it so difficult for people to travel and that was the big motivation to be in Hong Kong, it was close to my home and my parents. But you can’t make it that long in hotel quarantine with kids,” she said. “Everyone thought the restrictions would be lifted, it would get better and it wouldn’t last that long.”

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Hong Kong has had only around 13,000 coronavirus infections out of a population of 7.4 million, far fewer than most places in the world. But the Chinese territory is following Beijing’s “zero-COVID” policy rather than adapting to life with the virus.

It has implemented rigid quarantines for two years and last year introduced some of the strictest entry rules in the world, allowing only residents to return to the city and a mandatory quarantine in hotels for up to three weeks for arrivals from most countries, regardless of country. vaccination status, paid for by the travelers themselves.

However, “zero COVID” is no closer – 140 new infections were reported in Hong Kong on Sunday – and there is no sign of the government easing those restrictions. As a result, more and more expatriates are considering leaving, and global banks, asset managers and corporate law firms are faced with the exit of large numbers of their employees after the payment of the annual bonuses in the first three months of the year, headhunters and industry executives said. Reuters.

“Hong Kong’s summer will be when a lot of people throw in the towel and say, ‘This is just unsustainable,'” a capital markets investment banker said, speaking on condition of anonymity. “As a banker right now, it’s better to be based in Singapore. You can travel, and once or twice a year you can bite the bullet and come to Hong Kong and quarantine if you need to.”

More than 40% of members recently surveyed by the American Chamber of Commerce in Hong Kong said they were more likely to leave Hong Kong, with most citing restrictions on international travel as the main factor.

“For the fastest growing wealth and asset management industry, there is a shortage of skilled talent. If draconian travel restrictions continue for an indefinite and lengthy period, the talent issue will become all the more serious,” said Tara Joseph, president of the chamber. “Many in the industry also expect many jobs in the industry to eventually be filled by mainland Chinese talent, which will lead to a big talent shift.”

The Hong Kong government has played down any impending talent shortage. He said fighting the coronavirus was his top priority, for the good of the whole city, and that he was investing in talent to counter any loss of expertise or damage to its status as a global financial centre.

“We believe Hong Kong will continue to bring in talent from local and international sources,” a government spokesperson said. “The government will continue to promote diversified development in the financial sector, nurture local talent and attract foreign talent in various aspects to align with the long-term development of Hong Kong’s economy.”

RACE TO THE DOORS

Hong Kong’s population decreased by 1.2% between mid-2020 and mid-2021, with more than 75,000 people leaving the city, according to the Hong Kong Census and Statistics Department. Since September, Hong Kong has seen five consecutive months of net travel outflows, according to data from the immigration department.

Meanwhile, the total number of visa applicants from all countries under the “general employment policy” fell by a third last year to 10,073. decreased by 23%.

“The proposal to bring people to Hong Kong is not happening,” said John Mullally, regional director of financial services for southern China and Hong Kong at headhunter Robert Walters.

“The only people willing to do that are international or very high-level executives or very young people without families,” he told Reuters. “When you look at the city, the financial services talent pool is definitely shrinking.”

Rival Asian hub Singapore is the main beneficiary, said Christian Brun, chief executive of recruitment firm Wellesley.

“We’re going to start seeing more senior banking executives based in Singapore. A lot of people who have a choice now would prefer to move there,” he said. “We’ve seen it before with hedge funds and private equity and we’ll see it with banking as well.”

Some financial industry executives and officials take a more optimistic view, saying Hong Kong will continue to be attractive to Chinese companies and wealthy individuals as long as its low tax rate, rule of law and market freedom remain intact. .

“Some of the international vibe that we have in the city is going to change. It’s going to continue to thrive, but it’s going to be more with Chinese characteristics,” Kenneth Gaw, chairman of Gaw Capital Partners, told a conference at the Beginning of the month.

The Hong Kong Monetary Authority, the city’s de facto central bank, said it was aware of the pandemic-related challenges facing financial institutions, but said they should be “transitional” and that the fundamentals underpinning Hong Kong’s status as a global financial center would remain strong. .

Hong Kong’s Securities and Futures Commission said the number of licensed firms and individuals operating in the city continued to grow until late last year, which it said underscored its attractiveness.

Nevertheless, many expats are not waiting to see how things unfold.

A financial analyst with a global research group who has lived in Hong Kong for more than five years told Reuters he was waiting for the city’s international borders to open so he could see family and friends.

But with no sign of change, he said he decided to return to the United States in the second quarter.

“Basically we have to see our families and there is no end in sight to travel restrictions, no roadmap or plan,” he said. “Eventually you stop waiting and realize moving is the only option.”

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Reporting by Scott Murdoch and Kane Wu in Hong Kong Editing by Sumeet Chatterjee and Bill Rigby

Our standards: The Thomson Reuters Trust Principles.

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