What everyone remembers is the rain. Sheets of rain, thunderclaps with it, nothing unusual for July 1 in Hong Kong but timed almost precisely for the moment when Prince Charles, representing the British crown, formally ceded control of Hong Kong to China after more than 156 years of colonial rule. The cliché of British stoicism and stiff upper lip seemed to fit; Charles stood there, getting soaked as he went through the motions.
For China, the 1997 “huigui” or return, of Hong Kong to Chinese sovereignty was a moment of immense pride. For others, the arrival that night of thousands of Chinese soldiers and military vehicles suggested that China might bring a heavy hand to its rule, despite Beijing’s repeated pledges to let Hong Kong be Hong Kong under the formula known as “one country, two systems.” In other words, the territory would retain what it was famous for: a freewheeling capitalism, democracy and openness unlike anything available on the mainland.
For many years, that promise held. Hong Kong succeeded wildly by the metrics of economic growth and rising population, as well as the less easily measured index of “it’s a really fun and interesting place.” Skyrocketing growth in China only added fuel to Hong Kong’s success.
Now, however, as Chinese President Xi Jinping leads ceremonies marking the 25-year anniversary of that rain-drenched morning, a trifecta of pro-democracy protests, growing encroachment from the mainland and Hong Kong’s response to the covid-19 pandemic has raised questions not unlike those raised 25 years ago. And 25 years later, people are leaving — voting with their feet, as they say, opting for new lives in other parts of the world.
Grid spoke to several long-standing residents of Hong Kong — some born and raised there, some who came from mainland China, as well as Americans who have lived there for decades. They have made different decisions about whether to stay or go, and they have different answers to a basic question: Why, after all these years, are people leaving Hong Kong?
For 60 years, the population of Hong Kong was on a steady trajectory — one that mirrored the island’s economy: up and up. In 1960, 3.1 million people lived there; by 2019, the figure was 7.5 million. The economy suffered immediately after the 1997 handover, but that was due to the global financial crisis later that year. Soon Hong Kong was turning in annual growth in the 5 to 8 percent range.
Then, beginning in 2019, people began to leave — 93,000 in 2019; another 23,000 in 2020. As a percentage of the population, it was little more than a trickle, but this year the trickle has become a steady stream. In the first quarter of 2022 alone, more than 140,000 people left Hong Kong.
The American Chamber of Commerce in China found that 44 percent of its Hong Kong members and 26 percent of companies were considering leaving; roughly half the respondents in a European Chamber of Commerce survey said the same.
Among Hong Kong natives, many have taken advantage of something known as the British National Overseas (BNO) visa — a program that allows Hong Kong citizens born before the 1997 handover to live, work and study in the U.K. for up to five years and offers a path to citizenship. According to the U.K., some 5.4 million people in Hong Kong may be eligible for the BNO visa; between January 2021 and March 2022, 123,400 Hong Kongers applied. More than 90 percent were approved.
The exodus — of locals and expatriates alike — follows a flurry of gut punches that have struck Hong Kong in recent years.
In 2019, large-scale protests broke out in response to a proposed extradition law, which for the first time would have allowed China to bring criminal suspects to the mainland for trial. The law was shelved, but it reignited long-simmering calls for greater democracy. More than 2 million people took to the streets, a minority used violence, and the authorities’ response included a level of police brutality rarely seen in Hong Kong. That in turn sparked an intense debate: on one side, those who felt the protesters were out of line — in their demands and tactics both; on the other, fury at the rough response, the roundups of peaceful demonstrators and the failure of the Hong Kong government to consider the protesters’ demands.
In 2020, China imposed a National Security Law on Hong Kong — and that divided residents along similar lines; to some it was a necessary response to ensure stability, to others it was a draconian and open-ended measure that gave China license to impose its will on the population.
And then there was covid-19. Hong Kong imposed severe travel restrictions and quarantines and — much like the mainland — rode out the first year of the pandemic relatively well. Then omicron arrived. Hong Kong stuck to a China-like zero-covid approach, and the results were not only a rise in caseloads but also an extended shutdown of travel, even as other Asian hubs reopened.
Now, the majority of travelers are headed in one direction — out.
Kay Kutt, CEO of the Hong-Kong based relocation company Silk Relo, told CNBC that the past three years have been the busiest in her company’s 40-year existence.
“We cannot keep up with the capacity,” she said. “We don’t have enough people to serve what’s going on in the marketplace.”
And Sassy, a publication typically devoted to Hong Kong culture, spas and nightlife, has a new feature: a “leaving Hong Kong” checklist.
Why are they leaving?
From this side of the world, a common view is that people are leaving Hong Kong in pursuit of greater freedoms. But when you ask Hong Kong residents why people are leaving, you’ll get a range of answers. And a debate.
“It’s the pandemic — and Hong Kong’s draconian response.”
“It’s the National Security Law.”
“It’s unease about China’s encroaching on Hong Kong” — a distant cousin of that feeling from a quarter-century ago.
The answer depends to some extent on which professional group you are asking; it also depends on a person’s view of China.
“It happened because many people can no longer put up with Hong Kong’s restrictive quarantine policies after the rest of the world has opened up,” Weijian Shan, chairman and CEO of the global investment firm PAG, told Grid. “Finance people can’t really function without being able to travel frequently. The longer Hong Kong is semi-locked up, the more likely the temporary moves will become permanent. Hong Kong is in real danger of losing its talents if it doesn’t open up fully soon — like now.”
Shan is a highly successful businessman with an unusual background. Born in China in the 1950s, he was subject to a harrowing exile during the Cultural Revolution. He wrote a memoir about the experience — “Out of the Gobi” — in which he pulled no punches about the horrors imposed by China during that time. Today, he defends the mainland’s actions in Hong Kong, and he doesn’t buy the idea that a loss of freedoms is driving people away.
“The Western media would want you to believe it is a reaction to the National Security Law,” Shan said. “There’s no evidence of it. There is no reason for businesses to run afoul of the law. In fact, the National Security Law brought back social stability from the unrest of 2019, which was very disruptive for businesses.”
Michael Leonard, who spoke on the condition of anonymity and is using a pseudonym, is an American banker who was first lured to Hong Kong decades ago — before the 1997 handover. He and his wife raised children in Hong Kong, thrived and enjoyed life there. This year, they moved to California.
“For me it was purely related to the pandemic,” Leonard told Grid. “Now if you talked to my wife, she’d tell you how upset she is because of the National Security Law and the political changes, and there’s truth to that. But there’s no banker I know that’s leaving because of the National Security Law.”
The fact that Leonard won’t share his name — his company wants no unnecessary friction with China — tells you something about sensitivities vis-à-vis the mainland in Hong Kong. But others Grid spoke with agreed: For Hong Kong’s expats, it’s the covid-19 restrictions that have sent them packing.
Those restrictions included a mandatory 21-day isolation period for most visitors or returning residents, quarantine periods spent locked inside hotel rooms, at their own expense. Bills could run in the thousands of dollars. It was an inconvenience for most, but it was all but untenable for people with children or parents in other countries or for international bankers whose livelihoods depend on travel.
It’s not just covid — it’s China’s heavy hand
Mark Clifford has had a long and varied career in Hong Kong. He served as editor for two of its most prominent English-language publications — the now-defunct Hong Kong Standard and the still-running South China Morning Post — and as executive director of the Asian Business Council. He says he loves Hong Kong. But last year, he decided it was time to leave.
Clifford speaks for another category of expatriates in Hong Kong — journalists and those who work for civil-society organizations, many of whom “feel they can no longer do their jobs from Hong Kong. Or at least they can’t do their jobs the way they want to.”
In the wake of the National Security Law, hundreds of protestors, journalists, academics and pro-democracy lawmakers have been arrested. More than 50 nongovernmental organizations have disbanded; others have prepared risk assessment plans in the event of crackdowns on their operations.
While Clifford acknowledged that the pandemic restrictions have been a “last straw” for many, he believes the exodus is being driven largely by fear and uncertainty about mainland China.
“People just started to wonder,” Clifford said. He cited the arrests, limits on protest, self-censorship at news organizations and other factors as having contributed to a general uncertainty. “You have a lot of people wondering, ‘What’s next?’”
Ying Cheung said the unease is palpable. She was born in Hong Kong in 1981, studied medicine in the U.K. and is now a doctor at a public hospital in Hong Kong.
“For Hong Kong people, leaving is mostly political,” Cheung told Grid. “It makes you a little uneasy when you go around talking to people these days, because you’re either pro-China or you’re totally anti-China. There’s no in-between. You can’t talk to each other without arguments.” She added that “the worst thing is not just between friends, it’s between families and generations.”
She described the medical field as generally more “pro-West” and said many of her colleagues have chosen to leave. “You lose a lot of really resourceful manpower in a very short period of time. All they want to do is leave this place because they think there’s no future.” The loss of skilled workers will take years to replenish, Cheung said.
Cheung said she plans to stay — “I was never up at the front line or protesting” — but she understands those who feel differently. “I think for them, the reason to leave is obvious — it’s the political situation that they can’t bear, and fair enough to them. I think if you’re not happy living in a city, then going abroad is always an option.”
Younger residents of Hong Kong, graduates of local schools and universities, are more likely to have been on those “front lines” of the 2019 protests. They tend to have less allegiance toward the mainland — and sometimes veer closer to outright hostility. For them, the U.K.’s BNO visas hold an obvious allure.
Deborah Kan, a journalist and entrepreneur who has spent more than 25 years in Hong Kong, told Grid she hired eight summer interns from local universities last year. All eight came to her asking her for recommendations for study or work in other countries.
“The student population has basically been silenced by the government,” Kan said. “You can’t speak out now because of the impact of the National Security Law, so I think you have a group of young people in Hong Kong who are looking for ways out. And that’s tragic.”
For Shan, the CEO of PAG, these concerns are overwrought.
“If you insist on advocating or engaging in secession, independence, subversion, regime change or colluding with foreign sources,” he said, “you are likely to run afoul of the National Security Law.” If not, he said, Hong Kong’s freedoms of speech, publication, trade and the free movement of people “continue to make Hong Kong one of the most open societies in the world.”
That assessment — expressed often in Hong Kong — doesn’t assuage those worried about Beijing’s motives. As Clifford noted, the authorities might well use one of those charges — the ill-defined “colluding with foreign sources,” for example — as a means to pursue its enemies.
The entrepreneur Deborah Kan — daughter of a Hong Kong-born father and American-born mother — believes that at the end of the day, the covid response and the overall Chinese encroachment in Hong Kong are intertwined.
“Hong Kong cannot make its own decisions independent of China — covid is just an example of that, the way they followed the covid-zero approach,” she told Grid. Asked to name the primary reason for the exodus, Kan said, “I think a lot of people are just on edge. It’s very hard to go from a free society to one that’s less free.”
Last year, Kan made her decision. She, too, left Hong Kong for the U.S.
Even before the current upheaval and departures, there were questions about Hong Kong’s future. A perennial one was whether the city might lose out to Shanghai as Asia’s leading financial capital.
Now, Hong Kong is fighting to retain its global reputation and standing, and to calm the concerns.
At this week’s anniversary ceremony, Xi spoke of a “brighter future” for Hong Kong, adding that the territory “is entering a new stage — moving from the transition from chaos to governance, toward the transition from governance to prosperity.” Earlier this month, Hong Kong Chief Executive Carrie Lam assured a television audience that “Hong Kong is as free as ever, whether it’s in the freedom of expression, in the freedom of assembly, in the media, and so on.”
In one very obvious sense, it’s not true. The 1997 handover was one of the most widely covered events of that year; for the 25th anniversary, journalists from Reuters and a half-dozen other news organizations were barred from covering the ceremony.
“I think long term the city will be fine,” said Leonard, the banker who left recently. “But the city will be different. Hong Kong historically was both an entry point to China and a global Asia hub. Now the global city piece will decline a bit; the entry point for China will survive. And to flourish, it will become much more Chinese.”
Clifford, whose new book is called “Today Hong Kong, Tomorrow the World,” sees “a danger that Hong Kong becomes just another big Chinese city. I’m certainly not predicting the end of Hong Kong by any stretch, but the idea that it’s going to become a global financial center on a par with New York and London — which it was well on the way to being — I think that is gone.”
Recently, the South China Morning Post ran an op-ed under the heading, “Why this 25-year-old is not leaving Hong Kong.” The author was Brian Y.S. Wong, a Hong Kong native born in the year of the handover.
Wong wrote that “much of Hong Kong’s shine has dulled in recent years” and that “we have a deluge of problems to tackle — ranging from youth disillusionment to our faltering status as an international nexus.” But he went on to praise the city’s vibrancy, its blend of East and West, and the fact “you can commute between lush, green forests and swanky skyscrapers in minutes.” And then he finished with a flourish:
“There are some who assert that Hong Kong is dead — that it’s high time to leave. Here’s my rejoinder: this is my home, and it’s not going anywhere. I’m not going anywhere.”
It was a powerful sentiment, at once a ringing endorsement for his city and an example of the problem: The fact that he or anyone else had to defend Hong Kong as a place to live suggested something profound had changed.
Thanks to Lillian Barkley and Alicia Benjamin for copy editing this article.