Recession is looming...
Located in the heart of Hong Kong, Canton Street is home to the the most luxurious brands: Cartier, Dior, Louis Vuitton. Usually crowded, the shops hardly attract anyone anymore. And this seems to be a representation of Hong Kong: an economy in slow motion.
Some expatriates are considering Singapore as an economic alternative to Hong Kong. "We are going to Singapore," states an American entrepreneur to Asian Nikkei Review. Based in Hong Kong for two years, his startup made more than $ 100 million last year. But that's not enough to convince us to stay here. The violence has definitely made investors think twice. “I don't really care who is wrong or right. What we see is people are leaving” explains the entrepreneur.
And as if this was not enough, now the region has to deal with the coronavirus outbreak. The virus is emptying the streets.Philippe Branche, a finance expert in Hong Kong, reports to the Huffington Post: “Expats are leaving, disinfection teams regularly survey the city and the elevator buttons now carry plastic filters changed at a fixed time. " Certainly, this epidemic will have an impact on the Hong Kong economy.
Nicolas Boutin, French chef owning a gourmet restaurant reports his restaurant is almost always empty. Speaking to France TV info, he states that more than 400 restaurants have already closed and more than 1,000 would probably close at the beginning of the year. The chef claims that his daily loss averages $ 8000.
Hong Kong government economist Andrew Au said "the economy is officially in recession". The first time in ten years this has happened. GDP has shrinked by 1.2% in 2019. Against 3.5% in 2018. The IMF, providing reassurance, speaks of a “limited recession”. While the financial sector is driving the economy, it certainly shows a decline (+ 6.3% in September 2019, against 21.4% in 2017 - figures from Le Figaro), but remains solid. For expatriates working in banking, insurance, technology and real estate, business continues. The hotel, tourism, aviation and trade sectors are the most affected by the crisis. Trade is particularly targeted, with a drop in sales forecast from 8.1 to 3.7%, according to Hong Kong Business. The Hong Kong Retail Management Association (HKRMA) paints an even darker picture. It claims, 97% of its members said they have suffered commercial losses.
And a lot of these business owners are expats, like David McEwan, owner of a bar in the central district of Hong Kong. He says, the demonstrations slowed down his business. “Roadblocks, strong police presence [...] people tend to go home straight after work, instead of going out for a drink. It's frustrating." (cnbc.com) The coronavirus has only amplified the phenomenon.
Although Hong Kong remains a strategic place for finance, many foreign entrepreneurs and professionals wonder how long they can remain in uncertainty. Ross Darrell Feingold, director of the global travel security consultancy SafePro Group, said: “Although Hong Kong is" not yet at an inflection point ", [...] more foreign companies have started to review their emergency plans. ” (Nikkei Asian Review). The IMF, on the other hand, predicts darker economic days if tensions tighten.
Should I leave or should I stay?
November 2019. The local elections appeared to be a sanction vote towards Carrie Lam, Chief Executive, who admitted loopholes. With more than 70% voter turnout, Democrats largely outdid the ruling party. Carrie Lam does not seem ready to give in, however. And that's exactly what expats find worrying.
While many expatriates understand the movement, they fear for their safety. Some are leaving and others are thinking twice about settling in. Work visa applications have gone down by 7% compared to August 2018 according to Courrier international. Those who have decided to stay behind worry about their children.
Hong Kong has 7.5 million inhabitants, 25,000 of whom are French. Delphine, who has lived there for 17 years, deplores having received “no information from the French Consulate". The Hong Kong police would sometimes notify her by text whenever there were protests and she would also get notified about the evolution of the coronavirus by text. Nathalie concludes: if we do leave, it will be temporary. “Hong Kong is our home. We love it here and we hope we can stay as long as possible. ”
A feeling shared by other expatriates. Some support the pro-democracy movement, such as Marc Progin, a Swiss photographer who has lived in Hong Kong for 40 years. He distinguishes 3 opposing camps: "In front of the pro-democrats, there are the pro-establishment or pro-Beijing." Himself victim of an assault, he said that "the pro-Beijing people are much more violent than the police and the students." Others, like Eric and Anne, French expatriates, also choose not to sit by and wait it out. For Anne, it is a question of fulfilling "a moral duty".
The protests were usually mostly happening around metro stations, business districts, government offices. And while things seem to be getting back to normal, it is only deceptive: the coronavirus is on everyone's mind. Hong Kong has raised the maximum alert level. Authorities count 42 cases and one death. Shortage of masks, toilet paper, rice, gloves, hydroalcoholic solutions ... The police even deplore thefts of toilet paper in organized gangs. The psychosis is quickly setting in. Expatriates - especially families - prefer to leave. Jacob, originally from New Zealand, is leaving because he wants to bring his daughter to safety (Bloomberg.com). Hong Kong still bears the stigma of SARS, a virus that killed more than 300 people in 2003. The anxiety is even spreading to places of worship. A missionary in Hong Kong since 2014, Nicolas de Francqueville has temporarily suspended masses and celebrations. Cultural events are suspended or canceled. Schools, closed. This further encourages expatriate families to consider leaving.
2020 promises to be a challenging year for Hong Kong. Health emergency, with the coronavirus outbreak. Political challenge, with the demands of the Democrats.
