Hong Kong's New Chief Executive Acts to Staunch Exodus

John Lee set on growing city’s workforce . . .

At his inaugural policy address on Wednesday, Hong Kong’s Chief Executive John Lee revealed the measures he plans to implement to combat Hong Kong’s brain drain and boost business. Lee proposed five main strategies to achieve these goals: increasing the availability of public housing, bolstering Hong Kong’s status as a financial hub, introducing policies to attract talent, strengthening mechanisms to improve the legal system, and reducing COVID-related travel barriers. Some of his most notable policies include a two-year visa for graduates of the world’s top 100 universities or those with annual earnings above C$438,165 and an allocation of C$5.24B to attract businesses to Hong Kong.

National Security Law and COVID spurring exodus . . .

Since 2020, Hong Kong’s population has shrunk by roughly 140,000, with this number jumping to 200,000 when the exodus of foreign residents is included. Between June 2021 and June 2022, some 121,500 residents left the city, resulting in a record-breaking population decrease of 1.6 per cent. The two main drivers of this population loss are the implementation of the National Security Law in 2020, which has enabled a crackdown on political freedoms, and the city’s stringent COVID-19 regulations. These two forces have also contributed to Hong Kong’s drop in the Global Financial Centres Index, which this year ranked Singapore higher than Hong Kong, with the former in third place and Hong Kong in fourth.

Will new measures be sufficient?

Despite the comprehensiveness of the initiatives outlined in Lee’s speech, it remains uncertain whether these policies will be able to revitalize Hong Kong. Lee also reinforced the importance of “safeguarding national security” and indicated that regulations will be expanded to new areas, such as cybersecurity and misinformation. Many countries, including Canada, have expressed concern over the National Security Law, and a further expansion of restrictive regulations and policies might discourage talent from remaining in or relocating to Hong Kong.