As Hong Kong marks the 20th anniversary since the handover to China in 1997, it does so with a drastically different economic landscape and outlook, particularly for the many foreigners who call the city home.
The city has increasingly turned towards China as a source of economic drive, at times at the expense of partners elsewhere. For long-term expats living in the city, that often translates into a sense of insecurity about their future in Hong Kong.
Alex Beattie, a financial professional from the United Kingdom who has spent most of his working life in Hong Kong, feels unsure about how to plan his next career move.
“I have spoken to a few of my clients who are also Mainland and international banks and it is quite clear that the international companies are all moving out of Central and a lot of the Mainland companies are moving into Central,” he said. “You can also see from Lan Kwai Fong and Wan Chai that there are fewer expats in Hong Kong as a lot of establishments are closing down without the patrons there.”
Indeed, Hong Kong’s economic boom during the 1980s and early 1990s was in large part driven by an influx of expats and international companies that made the city an employment heaven for English speakers.
This seems to be changing fast, especially as rents continue to skyrocket to prices that only companies from the Mainland seem able to afford. Some international companies have even chosen to leave Hong Kong and set up in competitive locations instead, such as Shanghai or Shenzhen.
“The way I see it is that a lot of it has to do with operating costs. High overheads mean you can’t survive in premium locations anymore. For example, look at all the banks that moved out of IFC just to go to ICC, which is still quite empty in comparison,” said Beattie.
Mainland Chinese companies, on the other hand, are coming to Hong Kong “at whatever cost,” even if it means losing money for a few years, according to Beattie.
“This is long-term planning for their future, so they will pay the crazy rental prices in Central which the international companies can no longer pay, and in order to cut costs they have to move,” he said.
This shift in presence is determining Hong Kong’s development. Prime locations like Central are increasingly discovering that they have closer links to Mainland China than to the UK or US. On the other hand, up-and-coming locations like Eastern Hong Kong Island are changing at the ground level, with a multitude of international restaurants and bars opening up.
For expats who do not have a strong command of the Chinese language, opportunities in the former British colony are not as limitless as before.
“That scares me – what is the landscape going to be like in 10, 20, 30 years? That’s something I have to plan for,” said Beattie.
Antony Dapiran, a corporate lawyer who moved from Australia to Hong Kong in 1999, agrees that the changes are challenging for expats.
“In the early days, Chinese language skills were very much optional and plenty of expat professionals made their way here purely with a tourist’s curiosity. Today, Mandarin language skills are considered essential,” said Dapiran, who is also the author of City of Protest: A Recent History of Dissent in Hong Kong.
“Certainly the biggest change I have seen in Hong Kong since beginning my career as a lawyer here in 1999 has been the growing influence of the Mainland, particularly in the business arena,” he said.
He adds that in the early days, there were many business transactions that were purely domestic Hong Kong deals, or deals involving a foreign company doing business in Hong Kong. These days there will invariably be a Mainland element involved, whether as a principal or counterparty or shareholder or financing bank.
“We are also seeing the growing influence of Mainland companies on the local business landscape, with Mainland developers outbidding local developers for land and Mainland banks leading many IPO transactions on the Hong Kong Stock Exchange,” said Dapiran.
These challenges aside, Hong Kong has also experienced difficult times that have slowed its growth and changed its people’s ways.
“Hong Kong’s growth has been quite reedy compared with how strong China is. It’s done all right but not as great as expected – economic growth has been pretty low after the 80s and 90s,” said Simon Cartledge, founder and director of Big Brains, a Hong Kong-based research and publishing company, and the author of A System Apart: Hong Kong’s Political Economy from 1997 Until Now. Cartledge has lived in Hong Kong for more than 20 years.
The city’s efforts to preserve businesses may have restricted its entrepreneurial environment, he adds. The playing field has tilted much in favour of large conglomerates, making it almost impossible for small companies to break into the market.
“Hong Kong has narrowed down to basically just two industries – finance and logistics. It would be good to have a greater diversity of industries but what that diversity could be is unclear,” said Cartledge.
Luth Quinn, a fitness trainer and former flight attendant who relocated to Hong Kong from the Philippines more than 32 years ago, recalls the terrifying period of the Severe Acute Respiratory Syndrome epidemic in 2003.
“That was my scariest experience in Hong Kong,” said Quinn. “People were scared of losing their jobs and that included myself. I was working for Cathay Pacific Airways then as a flight attendant. … The Hong Kong International Airport was referred to as a ‘ghost town’ as not many people were travelling then. It was dark and empty!”
“I remember we were asked to go on forced unpaid leave, which I think was a much better option than losing our jobs altogether.”
The incident was a wake-up call to the people of Hong Kong as they became much more alert to health and sanitation issues. Although the outbreak hurt business and the economy, the lessons learned could serve Hong Kong’s growth in the future.
Quinn also recalls the many good changes in Hong Kong that have kept expats in love with the vibrant city for decades.
For example, there is the replacement of the Kai Tak Airport by the world-class Hong Kong International Airport at Chek Lap Kok in 1998.
“Because of this, the Lantau area became more developed, making it a growth area in Hong Kong,” she said, noting that now there are a lot of shops and hotels, a hospital, a fire department and police headquarters in the area.
“And of course there is the opening of Hong Kong Disneyland in 2005,” she added. “All these factors have a huge impact on Hong Kong’s business and economic development.”
Quinn also remembers that when she first came to Hong Kong in 1984, there were only two MTR lines – the Kwun Tong Line and the Tsuen Wan Line, or the green line and the red line. The rapid expansion of Hong Kong’s MTR system has made the city very convenient for commuters, helping businesses and the economy to flourish.
The significant increase in Mainland tourists coming to Hong Kong after the handover has also contributed to Hong Kong’s growth, she said. The construction of the Hong Kong–Zhuhai–Macau Bridge, which formally began in December 2009 and is due to be opened to traffic by end-2017, will also give Hong Kong the advantage of having more tourists come to the city. The movement of goods to and from Hong Kong is also set to increase.
“Overall, Hong Kong and the Mainland in terms of business and economy have become much closer in the past 20 years, and clearly that trend will continue,” said Dapiran.
And there are many opportunities too, because Hong Kong is still a leading financial hub where it is relatively easy to do business, said Beattie.
“People still see Hong Kong as a good gateway to China,” he said. “I think we will all have to adapt to the changing landscape. There might be less opportunities at first but I still believe that after the transition Hong Kong will still continue to prosper in different ways.”
“Whatever changes come in the future, I can only hope that it is for the betterment of Hong Kong and its people. After all, having lived in Hong Kong for 32 years, I can call Hong Kong my home,” said Quinn.