Expat Advice

Expat Families Flee Hong Kong After Double Whammy of Virus, Protests

After a decade and a half in Hong Kong, New Zealand native Ian Jacob is calling it quits. The owner of a construction-materials company, Jacob and his wife were worried last year about the political unrest, especially after the temporary suspension of schools. “We watched as the situation got worse and worse,” he said.

With classes suspended again amid the coronavirus outbreak, the prospect of more home schooling for their 10-year-old daughter pushed them to take refuge in Auckland, New Zealand. Jacob said they’ll be moving back there for good once the school year ends in Hong Kong.

“It’s just becoming an unstable environment to raise a child in,” he said.

The debate about leaving Hong Kong — which began for many expats during the unrest last summer and fall — has taken on a greater urgency with the spread of the virus, which has claimed more than 1,800 lives globally, and caused many companies in the financial hub to require employees to work from home. Critics accuse Chief Executive Carrie Lam’s government of mishandling the latest crisis compared with Singapore, which has kept schools open.

An exodus by expats like Jacob could further damage an economy already reeling from the unrest and the virus, with visitor numbers plunging and unemployment rising.

Hong Kong residents who come from elsewhere play outsized roles in finance, law and other service industries that make the city a global business capital. About 690,000 foreigners and non-Hong Kong Chinese live in the Special Administrative Region, accounting for about 9.5% of the population, according to the 2016 census.. Half were from the Philippines and Indonesia, the main sources of domestic helpers; the former colony also had about 35,000 Britons and 14,800 Americans.

The city’s population at the end of 2019 fell 0.1% from the midyear count, the first decline in almost two decades, according to government data released Tuesday. There was a net outflow of Hong Kong residents — excluding one-way permit holders from mainland China — of 29,200 in 2019, compared with a net inflow of 23,000 in the 12-month period ending in the middle of 2019.

Though there are no statistics on the number considering permanent moves, there is growing anecdotal evidence of a shift in sentiment among expats. Relocation companies are seeing a spike in inquiries about overseas moves with growing predictions that the political stalemate will lead to more instability.

Grim Outlook

As the city combats the virus outbreak, the political situation “could well worsen in the days and weeks ahead,” risk consultancy Steve Vickers and Associates said in a report released Feb. 11.

There were at least 62 confirmed cases of the virus in Hong Kong as of Feb. 19, fewer than in Japan or Singapore, and two deaths. That’s enough to create widespread fear. Many employees are working from home and many restaurants are struggling. Panic buying has emptied supermarkets, with bare shelves where toilet paper and hand sanitizer used to be.

Links International Relocation Ltd. had a 45% increase in inquiries about moves in the second week of February compared with a year earlier, said Patrick O’Donnell, the company’s Hong Kong-based managing director. The government’s announcement on Feb. 13 that schools would remain closed until mid-March — at least — will likely prompt more families to relocate, he said.

Typically the peak season for overseas moves is in June, yet springtime already is starting to look busy, said Timothy Tao, Hong Kong-based director of business development with relocation company Asian Tigers Group. Inquiries have jumped in the past month, he said.

Robert Chipman, Asian Tigers Group Hong Kong CEO, said in an interview with Bloomberg Television Wednesday that while there’s strong demand for moves from Hong Kong, there is almost no interest in relocations to the city. He’s been in his position for almost 20 years.

“I’ve never seen anything like this,” he said.

Permanent Damage?

Hong Kong is at risk of an exodus that could threaten the city’s global status, the heads of the local British and French chambers of commerce warned in a Feb. 12 letter.

“If the specific needs of international schools cannot be rapidly addressed, this will very likely trigger decisions of families (not just expatriates) to leave Hong Kong in the coming weeks,” wrote Rebecca Silli and Peter Burnett, chairs of the French and British chambers, respectively. “This would also have dramatic consequences on the international schools’ financial position, even to the point of putting at risk the continued operation of some.”

Still, many businesses and families are staying put, saying they’re confident Hong Kong will remain a hub for multinationals. Among the optimists is two-decade resident Donna NguyenPhuoc, a partner with Sparq Capital, which works with family offices to co-invest in such industries as technology.

“A lot of people who are planning to move haven’t been in Hong Kong enough to see how resilient Hong Kong is,” she said. “If you have been here long enough, you realize Hong Kong will push through this as it has before.”

Other families are going elsewhere at least temporarily, as they wait to see what happens next.

Insurance industry executive Ruth Lu, who has children ages 7 and 11, has rented a house with a pool on the Thai island of Koh Samui while schools are closed. “We don’t even need to wear masks,” she said.

A native of China’s Jiangsu Province who has lived in Hong Kong for more than 20 years, Lu has no immediate plans to move but the unrest has soured her on the city. “It’s not the old Hong Kong like when I first arrived,” she said.

Several bankers interviewed by Bloomberg, who asked not to be identified because they were not authorized to comment, said they had moved abroad with their families at least until the outbreak subsided and have postponed making longer-term plans.

About three-fourths of the families with children at Chinese International School, a popular private school with more than 1,530 students, have provided information on their whereabouts, and about 20% of those reporting are outside Hong Kong, according to the head of the school, Sean Lynch. That’s understandable, he said, because the closure announcement came during Chinese New Year, when many families already were away from home.

Waiting, Watching

Some families aren’t counting on schools reopening next month. Betty Lai, born in Hong Kong, raised in Canada and married to a Briton, has gone to the U.K. and enrolled her two young children in schools in Suffolk, England. Her husband, a recruiter, can work from London so the family plans on living there for now.

“We may end up staying for good if the situation in Hong Kong hasn’t settled by summer,” she said.

Departures that become permanent could hurt the city’s competitiveness, according to Tara Joseph, president of the American Chamber of Commerce in Hong Kong. “Once talent is lost from Hong Kong, it will be very hard to get it back,” she said.

— With assistance by Bei Hu, Manuel Baigorri, Sheridan Prasso, Vinicy Chan, and Natalie Lung

(Post Credit: www.bloomberg.com)