Expats flee Hong Kong after double whammy of protests and virus

Residents wear masks as they march to protest against the government's plan to set up a quarantine site close to their community amid the Wuhan outbreak, in Hong Kong, on Feb 2, 2020. PHOTO: REUTERS

HONG KONG (BLOOMBERG) - After a decade-and-a-half in Hong Kong, New Zealand native Ian Jacob is calling it quits.

The owner of a construction materials company, Mr Jacob and his wife were worried last year about the political unrest, especially after the temporary suspension of schools.

"We watched as the situation got worse and worse," he said.

With classes suspended again amid the coronavirus outbreak, the prospect of more home schooling for their 10-year-old daughter pushed them to take refuge in Auckland, New Zealand.

Mr Jacob said they'll be moving back there for good once the school year ends in Hong Kong.

"It's just becoming an unstable environment to raise a child in," he said.

The debate about leaving Hong Kong - which began for many expats during the unrest last summer and fall - has taken on a greater urgency with the spread of the virus, which has claimed more than 1,800 people globally, and caused many companies in the financial hub to require employees to work from home.

Critics accuse Chief Executive Carrie Lam's government of mishandling the latest crisis compared with Singapore, which has kept schools open.

An exodus by expats like Mr Jacob could further damage an economy already reeling from the unrest and the virus, with visitor numbers plunging and unemployment rising.

Hong Kong residents who come from elsewhere play outsized roles in finance, law and other service industries that make the city a global business capital.

About 690,000 foreigners and non-Hong Kong Chinese live in the Special Administrative Region, accounting for about 9.5 per cent of the population, according to the 2016 census.

Half were from the Philippines and Indonesia, the main sources of domestic helpers; the former colony also had about 35,000 Britons and 14,800 Americans.

Though there are no statistics on the number considering permanent moves, there is growing anecdotal evidence of a shift in sentiment among expats.

Relocation companies are seeing a spike in inquiries about overseas moves with growing predictions that the political stalemate will lead to more instability.


As the city combats the virus outbreak, the political situation "could well worsen in the days and weeks ahead", risk consultancy Steve Vickers and Associates said in a report released on Feb 11.

There were at least 57 confirmed cases of the virus in Hong Kong as of Feb 17, fewer than in Japan or Singapore, yet enough to create widespread fear.

Many employees are working from home and many restaurants are struggling. Panic buying has emptied supermarkets, with bare shelves where toilet paper and hand sanitiser used to be.

Links International Relocation Ltd had a 45 per cent increase in inquiries about moves in the second week of February compared with a year earlier, said Mr Patrick O'Donnell, the company's Hong Kong-based managing director.

The government's announcement on Feb 13 that schools would remain closed until mid-March - at least - will likely prompt more families to relocate, he said.

Typically the peak season for overseas moves is in June, yet springtime already is starting to look busy, said Mr Timothy Tao, Hong Kong-based director of business development with relocation company Asia Tigers Group. Inquiries have jumped in the past month, he said.

"People are telling us: How soon can you pack us up?" Mr Tao said.


Hong Kong is at risk of an exodus that could threaten the city's global status, the heads of the local British and French chambers of commerce warned in a Feb 12 letter.

"If the specific needs of international schools cannot be rapidly addressed, this will very likely trigger decisions of families (not just expatriates) to leave Hong Kong in the coming weeks," wrote Ms Rebecca Silli and Mr Peter Burnett, chairs of the French and British chambers.

"This would also have dramatic consequences on the international schools' financial position, even to the point of putting at risk the continued operation of some."

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Some families are going elsewhere at least temporarily, as they wait to see what happens next in Hong Kong.

Insurance industry executive Ruth Lu, who has children ages 7 and 11, has rented a house with a pool on the Thai island of Koh Samui while schools are closed.

"We don't even need to wear masks," she said.

A native of China's Jiangsu Province who has lived in Hong Kong for more than 20 years, Ms Lu has no immediate plans to move but the unrest has soured her on the city.

"It's not the old Hong Kong like when I first arrived," she said.

Several bankers interviewed by Bloomberg, who asked not to be identified because they were not authorised to comment, said they had moved abroad with their families at least until the outbreak subsided and have postponed making longer-term plans.

About three-fourths of the families with children at Chinese International School, a popular private school with more than 1,530 students, have provided information on their whereabouts, and about 20 per cent of those reporting are outside Hong Kong, according to the head of the school, Mr Sean Lynch.


Some families aren't counting on schools reopening next month. Ms Betty Lai, born in Hong Kong, raised in Canada and married to a Briton, has gone to the UK and enrolled her two young children in schools in Suffolk, England.

Her husband, a recruiter, can work from London so the family plans on living there for now.

"We may end up staying for good if the situation in Hong Kong hasn't settled by summer," she said.

Departures that become permanent could hurt the city's competitiveness, according to Ms Tara Joseph, president of the American Chamber of Commerce in Hong Kong.

"Once talent is lost from Hong Kong, it will be very hard to get it back," she said.

The US warned Americans about travel to Hong Kong in a statement on Feb 11, advising increased caution visiting the city.

The State Department has allowed the departures of non-essential personnel and their families.

Still, many businesses and executives are staying put, saying they're confident Hong Kong will remain a hub for multinationals.

Among the optimists is two-decade resident Donna Nguyen Phuoc, a partner with Sparq Capital, which works with family offices to co-invest in companies in such industries as technology.

"A lot of people who are planning to move haven't been in Hong Kong enough to see how resilient Hong Kong is," she said.

"If you have been here long enough, you realise Hong Kong will push through this as it has before."

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