Beijing’s increasing control has now diminished Hong Kong’s role from being the premier bridge between the West and China to a lesser global financial center.
The integration with Xi Jinping’s authoritarian regime drives significant companies out.
Data from the region’s Census and Statistics Department show an 8.4% drop in foreign companies with regional headquarters in Hong Kong since 2019.
According to the Wall Street Journal, the decline among American businesses has been stark, with a third departing in the past decade.
Some staying multinational companies have cut their staff by about one-third in four years.
Investor interest fades significantly due to China’s crackdown, especially with the 2020 National Security Law. This law boosts surveillance, crushing dissent.
According to human rights groups, Hong Kong’s legislators will soon pass legislation that will nearly erase all opposition to Beijing.
The crackdown during the democratic protests saw hundreds arrested and independent media shut down.
The new law will further ease targeting of those seen as threats by Xi and his regime.
The US State Department warns that the security law’s “broad and vague” terms could silence critics.
Businesses in Hong Kong will thus endure more surveillance from Beijing.
Gregory May, the US Consul General in Hong Kong, told Bloomberg some American companies now use temporary devices in the city, fearing data insecurity.
Hong Kong has slipped to second in the Economic Freedom Index, bested by Singapore.
According to Bloomberg Intelligence, Singapore now hosts about 4,200 multinational corporate headquarters, while the Beijing-controlled area has 1,336.
The Hong Kong Stock Exchange index now trades around 50% below its 2018 high and just a hundred points over its 1997 level, the year the UK returned the territory to China.