The national security law could turn Hong Kong into Asia's Monaco

That Hong Kong is in a period of flux was brought home to me recently as I queued for 90 minutes at DHL in Central, surrounded by people clutching large envelopes addressed to the Passport Office in Liverpool, filled with multiple BN(O) passport renewals. A middle-aged gentleman told me he was renewing for the whole family as they were planning to leave. Talk of an exodus from Hong Kong is nothing new, so assessing the actual scale and impact the national security law might have on emigration is difficult. What we can say is that this isn't the first time.

Jiang Zemin shakes hands with Prince Charles at the Hong Kong handover ceremony in 1997. Photo: Robert Ng alt=Jiang Zemin shakes hands with Prince Charles at the Hong Kong handover ceremony in 1997. Photo: Robert Ng

In the years leading up to Britain's handover of sovereignty to China, Hongkongers shocked by the events in Tiananmen Square in 1989 were increasingly worried about their future. In the subsequent eight years to the 1997 handover, about 500,000 people, or a little over 8 per cent of the population, left for Britain and former Commonwealth countries to secure a stable national identity and a familiar passport. Cantonese-speaking communities in Canada and Australia blossomed as immigrants replicated their lifestyles back home. Back in Hong Kong, it was a struggle to get an authentic local meal as all the chefs had fled.

However, there were plenty of people waiting to move in from the mainland as Hongkongers left, and they have continued to come in at a predetermined rate of 150 per day, with local authorities having no say who comes over " that is 1.26 million so far.

By the early 2000s, with the realisation that the People's Liberation Army wasn't pushing people around with cattle prods, many emigrants came back gingerly and Hong Kong went into a sustained period of growth, both economically and in terms of population. Things took a turn for the worse in September 2014 when growing anger and disillusionment among Hongkongers, brewing since the handover over Chinese national education and even the express rail link " what many felt was the mainland encroaching on Hong Kong " manifested itself in anti-government protests that are still going on.

After China's National People's Congress announced plans to impose a national security law in Hong Kong, British Prime Minister Boris Johnson published an op-ed in the South China Morning Post vowing that steps would be made towards making the BN(O) passport whole by allowing holders to remain in Britain for extendable 12-month periods to both study and work, providing a path to citizenship.

Several pertinent questions arose, among them: how would Britain cope with an influx of people? Would there be enough jobs? On the employment question, Britain seems to quickly exhaust its pool of workers for the jobs that Brits either can't or won't do. People with physical skills are in short supply, and British businesses have been relying on migrant workers from Europe for a wide range of skill sets " try finding a local plumber or washing machine technician.

After eight Eastern European countries were accepted into the European Union in 2004, they provided a rich supply of workers for labour-starved countries in Western Europe, including Britain. By 2006, nearly 600,000 were working in Britain alone, attracted by the relatively high pay. These were not only labourers, but also people in management roles, administration, hospitality and catering. With Brexit and the collapse of sterling many went home, which has resulted in a shortage of labour since 2016. This year, as commercial airlines halted operations because of the coronavirus, emergency farm workers had to be flown in for two-week stints on expensive charter flights to pick fruit and veg. While I am certainly not suggesting Hongkongers are destined to pick asparagus in Shropshire, the point is that the British workforce is in need of extra hands.

It is also in need of fresh brains for its manufacturing industry. Britain's impending exit from the EU, a weak sterling and a much-needed rethink about global supply chains open opportunities for the young and brightest from Hong Kong's universities as well as seasoned business owners concerned about their assets in Hong Kong.

And there are never enough medical staff " the National Health Service is currently importing from the Philippines, for example. And while Brits are often caricatured as having bad teeth, Hong Kong University has been the world leader in dentistry for the past two years. It's clear: Britain needs you!

Other countries, too, may embrace liberal-minded emigrants. Japan could be an option, with Governor Yuriko Koike and Prime Minister Shinzo Abe keen to make Tokyo great again. After multiple failed attempts at trying to revive Tokyo since the mid-1990s, success is somewhat hard to imagine, but the young and growing city of Fukuoka, on the southern island of Kyushu, is a thriving city of start-ups, and a promising new tech hub in Asia that could be good for Hongkongers. The United States, too, is looking for the best and brightest (but only those), though that, too, is probably a tough sell right now, given its various social problems.

So where does that leave Hong Kong?

Here in Hong Kong, those who remain would likely see a quick transformation of business as the city's role as a port declines and its importance as a sanitised financial centre for Chinese-listed companies increases.

" Trade through the Port of Hong Kong would likely decline faster if the Americans were to take away Hong Kong's special trading status, as they have threatened, and if the Greater Bay Area becomes a single economic zone, the Hong Kong advantage goes as it is cheaper to move containers through ports in Shenzhen and Guangzhou. The local economy then would rely on finance " banking and insurance " and getting the tourists back with its low-tax environment. Hong Kong's GDP in 2018 was 93.1 per cent services, of which Import-Export in was 17.1 per cent, having slipped from 24.1 per cent in 2014.

"As port operations shrink, land gets freed up for luxury waterside development. Instead of container ships, it could welcome posh yachts of the rich and famous, as Discovery Bay's new "Lantau Yacht Club" is planning to do " as well as new housing a little further inland for the less well-heeled, making the South Lantau reclamation appear even more ludicrous.

Foshan, one of the cities in the Greater Bay Area. Photo: Shutterstock alt=Foshan, one of the cities in the Greater Bay Area. Photo: Shutterstock

"Hong Kong's property market was not troubled by last year's anti-government protests, and the Covid-19 outbreak this year did not lead to the kind of collapse seen during Sars, although cracks are starting to appear in the high end of the market. This demonstrates a remarkable resilience in the market " at least so far " which should attract investors rather than scare them.

"The Greater Bay Area offers rich opportunities that Hongkongers may be able to tap, especially in the tech and manufacturing sectors. By allowing a freer movement of people and money, with tax advantages, the greater integration would boost confidence in Hong Kong's financial resilience.

"The Hong Kong stock exchange is entering a new growth phase. Thanks to the Americans, the pressure is mounting for US-listed Chinese companies to relocate back "home" and tap regional pools of money. I see no reason for this to stop.

Based on what happened before 1997, and the concerns expressed by local people, I think it is highly likely history will repeat itself. That suggests Hong Kong must be ready for another exodus, of a similar nature seen pre-1997, in the coming months as travel restrictions are eased and the price of relocating comes down. Britain would probably need to accommodate a significant number of Hongkongers with the establishment of new Chinatowns, and the move could be quick " it's better to be on the first lifeboat than the last one.

For the foreign community, the prospect of navigating another autumn of protests is unappealing. If it comes to pass, we could see a repeat of last August when expat families sent the kids on one-way trips back "home", leaving the breadwinner here pending a relocation opportunity. We know from recent surveys that a large percentage of businesses are considering relocation, or at least contingency plans.

British Home Secretary Priti Patel has indicated that the British government's pot of gold at the end of the rainbow for BN(O) passport holders " UK citizenship " would take five years to qualify for.

That is a long time to wait for such a small pot of gold.

This article originally appeared on the South China Morning Post (SCMP).

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