49% Of European Firms To Downsize Or Close HK Operations

HONG KONG – A survey by the European Chamber of Commerce (EuroCham) shows that almost half of all European businesses in the Chinese territory plan to relocate in the near-term, reported CNN on Friday evening (25 March, SGT).

Among the European companies planning to leave, 25 percent disclosed that they intend to fully exit Hong Kong in the next 12 months, while 24 percent are considering a partial relocation. Only 17 percent of the polled firm said they don’t have any plans to relocate during the aforementioned period.

The respondents cited the Hong Kong government’s harsh COVID-19 restrictions as their main reason for relocating. The Chinese’s territory’s zero COVID strategy has significantly impacted not only residents, but also the commercial operations of the European companies, according to the report from the EuroCham.

Hong Kong’s top advantage, its global connectivity and proximity to mainland China, “has been almost completely disabled” by its COVID measures, noted the Chamber of Commerce.

Hong Kong’s quarantines are infamous among residents and foreign workers. At one point, the authorities required most inbound travelers to self-isolate in hotel rooms at their own cost for 3 weeks – one of the longest isolation periods in the world.

While local government officials recently removed flight bans and reduced Hong Kong’s quarantine period to 7 days, an exodus of expatriates is already ongoing.

Last week, the city’s Chief Executive Carrie Lam admitted that the COVID restrictions are reducing residents’ satisfaction with the government, adding she had a “very strong feeling that people’s tolerance is fading.”

EuroCham’s survey involved 260 members from different chambers of commerce. These include that of Belgium/Luxemburg, the Netherlands, France, Greece, Italy, Portugal, Spain, Denmark, Finland, Germany, Ireland, Lithuania, Norway, and Sweden. 70 percent of the respondents represent firms with less than 100 staff.

In January, a survey by the American Chamber of Commerce (AmCham) showed that 44 percent of foreign workers and companies will likely leave Hong Kong due to its draconian COVID restrictions.