HK’s ambitious plans to attract global talent miss the wood for the trees

The Hong Kong government’s ambitious plans to attract global talent to the city is its mea culpa that its policies have driven tens of thousands of people away from its shores. 

But observers say until wider concerns, especially those about Covid-19 travel restrictions, are addressed, the government’s schemes to stem Hong Kong’s brain drain remain aspirational at best.

“These schemes might help, but the essence of it is really what employers do, and what individuals see is the long-term future of Hong Kong,” John Burns, a public administration expert at the University of Hong Kong, told The Business Times (BT). “Until they further relax the Covid restrictions, the schemes will not have that much impact.”

Hong Kong tightly controlled its borders during the pandemic in order to avoid flare-ups in coronavirus infections, but businesses bemoan the fact that these travel restrictions drove scores of expatriates away and battered the local economy. 

Between mid-2021 to the middle of this year, some 113,200 Hong Kong residents left the city, according to data from Hong Kong’s Census and Statistics Department in August. Official figures released on Monday (Oct 31) showed that the city’s economy continued to shrink in the quarter ended Sep 30, marking its biggest drop in two years and taking economists by surprise.

“Many people told us that they were not able to walk the corridors of their companies’ headquarters outside Hong Kong, and that would gradually make them feel they were losing relevance, which would impact their careers,” Inaki Amate, chair of European Chamber of Commerce in Hong Kong, told BT.

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In an attempt to address criticisms, Hong Kong Chief Executive John Lee focused his recent maiden policy speech, delivered in mid-October, on how he plans to “build a better Hong Kong”.

He devoted much time to talent attraction, stressing that his government will “proactively trawl the world for talents” in order to be more competitive. Lee’s plans for talent attraction are a response to the 140,000 shrinkage in Hong Kong’s workforce over the past two years.

One of Lee’s most eye-catching initiatives is a new talent scheme that will grant visas to anyone earning at least HK$2.5 million (S$450,000) a year, or is a graduate of one of the world’s top universities and has worked for at least three years.

His government will also extend employment visas to a maximum of three years, and allow companies to transfer staff from elsewhere into the city, without having to prove that they cannot find a local to fill certain roles.

Foreigners can also expect a partial refund of the stamp duty that they paid for their first homes in Hong Kong when they become permanent residents.

Lee also sees improving Hong Kong’s housing situation as a means to keep residents grounded to the city. “The objective is to let people see the hope of getting on the housing ladder earlier and having more decent housing,” he said.

Among his plans for property is to increase the public housing supply by 50 per cent in the next five years, and earmarking more land for housing. 

But Lee did not provide any indication that Hong Kong would ease Covid-19 restrictions further in his three hour-long speech.

Investors did not seem convinced by what he had to say, either. The city’s benchmark Hang Seng Index was down 2.4 per cent the day he delivered his speech, according to Bloomberg. An index of property developers fell 1.8 per cent to its lowest level since 2011.

For now, observers are waiting to see how Lee’s government plans to deliver on his promises of revitalising Hong Kong’s economy. They are also assessing if the private sector is responding to his proclamation that Hong Kong remains a competitive financial hub in Asia.

“Overall, the policy address, if well executed, should help revive the growth in Hong Kong in the long term. Immediate benefits are limited for now,” said Richard Tang, an equity research analyst for Asia at Julius Baer, in a note. “Most of them are long-term measures, so execution is key. The near-term policies are likely headwinds to developers.”

“These measures are not enough. We think that Hong Kong needs to remove all the remaining Covid-related measures for inbound visitors” and then work with businesses to revamp Hong Kong’s image, said Amate from the European Chamber of Commerce. “We remain optimistic as we are starting to see some positive signals of an increase in requests and applications to come to Hong Kong.”