No sé muy bien por qué nadie se ha atrevido a decirlo abiertamente todavía, pero Hong Kong ya no es un centro financiero y de negocios internacional. No me alegra en absoluto decirlo, porque tengo muchos amigos en Hong Kong y siempre me ha encantado ir allí, pero la posición privilegiada de Hong Kong ha llegado a su fin. Kaput. Fini. Terminado.完.законченный. Done. Over. Se acabó.
I challenge you to say “one country two systems” with a straight face.
For the last few months I have been relentlessly asking everyone I know in Hong Kong or who used to be in Hong Kong or who at one time contemplated setting up a business in Hong Kong how what has been happening in Hong Kong has and will or would impact their doing business in Hong Kong. Based on those responses and on my own experience with how international companies operate, I foresee the following:
- Las empresas que estaban dudando entre Hong Kong y Singapur para establecer su sede asiática optarán por un lugar distinto de Hong Kong.
- Las empresas en expansión que cuentan con oficinas en Hong Kong y en otros lugares de Asia aumentarán su contratación fuera de Hong Kong y reducirán o eliminarán la contratación en Hong Kong.
- Companies with offices in Hong Kong and with offices somewhere else in Asia will be move personnel from their Hong Kong office to their other offices.
- Se redactarán menos contratos en los que se designe a Hong Kong como sede del arbitraje.
- Las empresas trasladarán sus cuentas bancarias de Hong Kong a otros lugares.
- Travelers will choose somewhere other than Hong Kong as their Asia stopover. It is no coincidence Cathay Pacific stock hit its 52 week low today.
- Muchos habitantes de Hong Kong acabarán marchándose a otro lugar.
I am not saying any of the above will be noticeable tomorrow or even a month from now, but I am saying that all of the above have already begun and all of the above will accelerate once China’s army goes in at full force, which is pretty much inevitable. Within two years Hong Kong will be a very different place than it is today and within five years it will hardly be recognizable for those of us who have been there within the last five years.
Since the inception of the US-China trade war, this blog has been relentlessly downbeat about the US-China trade war and its impacts. Way back in October 2018, we called the US-China trade war the “New Normal” and in Would the Last Company Manufacturing in China Please Turn Off the Lights, we forecast an inevitable sharp decline in China manufacturing. On May 8, 2019, in The US-China Cold War Starts Now: What You Must do to Prepare, we warned of a “straight line decline in US-China relations” and we laid out what businesses should do in response to that. Long before that, my law firm brought on three additional sourcing experts experienced with product sourcing from Southeast Asia and with other countries outside China.
Our gloomy predictions have angered many, and I get it. What we are saying is not pleasant, especially for those with companies or livelihoods that depend on free trade with China or on Hong Kong remaining as Asia’s leading business hub. But please understand that we are only calling things as we see them, not as we want them to be.
As for Hong Kong, we are now suggesting our clients (and you) (1) consider places like Singapore and Bangkok as your Hong Kong replacement, (2) implement plans for evacuating your Hong Kong personnel, (3) cease using Hong Kong arbitration clauses (except with Hong Kong companies), and (4) avoid going there unless truly necessary. If corporate responsibility or data protection are at the core of your business your Hong Kong decisions are more pressing.
What are you doing about Hong Kong?
