AN outflow of expatriates is being fuelled by company budget cuts and lower living costs in other Asian cities, international removal companies say. They say big firms are trimming staff, hiring locals when they can, and opting not to replace expatriates who leave. Many are sending their expatriates to Singapore, where they see lower rents and environmental conditions their workers prefer. Santa Fe Transport International says the number of people leaving Hong Kong for Europe has risen 20 per cent this year, and twice as many people moved from Hong Kong to Australia as moved from Australia to the SAR. 'We are moving a lot of people into Hong Kong as well, but the general trend is they're leaving,' corporate services manager Bryce Burns said. Traffic coming from Australia has taken the hardest hit this year, falling 80 per cent on last year. About 16 per cent fewer people came from Europe this year, and seven per cent fewer from the United States, company figures show. Interconex Far East sales manager Stephen Owens said the Asian economic squeeze was spurring localisation and moves around the region. 'By far the biggest market for intra-Asia moves is Singapore. This reflects the lower cost of basing expatriates there,' he said. Santa Fe Transport, meanwhile, has seen Hong Kong-Singapore traffic rise 26 per cent, while that travelling in the opposite direction has fallen 27 per cent. 'We do know that Singapore has lower rents - the expats say 'this is great, I can get a bigger place for less money',' Mr Burns said. In the battle to lure international companies looking for an Asian base, Hong Kong has proximity to the mainland on its side. But Richardson Sells, managing director of removals firm Global Silverhawk, said the opening up of mainland cities could present a new threat on top of that from Singapore. 'For those companies with a China focus, they clearly have a lot of options throughout China that were not available two or three years ago, and at a much lower cost,' he said. 'Shanghai, Beijing and other major mainland cities are definitely viable options for basing the expat. 'Both have good schools, good housing and a good social life.' Mr Sells said pollution was one reason expatriates avoided the mainland - and looked to Singapore - and he warned that if Hong Kong's pollution was not reined in, the SAR stood to lose even more people. ING Barings analyst Tim Condon said Kuala Lumpur, and at a later stage other Asian cities, would give international firms more options in future. But the removal firms said that long-term, Hong Kong could retain its grip on the expatriate market. Mr Sells said: 'It is my belief that Hong Kong will bounce back . . . but I fear we will never see the glory years we saw in the 1980s and early 1990s.' Mr Condon said that just as Hong Kong diversified when manufacturing moved to the mainland, it would do it again and remain attractive. 'Hong Kong will survive,' he said. 'It's not about identifying right now what Hong Kong will look like in 10 years. Hong Kong will re-invent itself yet again. Markets which are free to adjust will find something to do and I'm optimistic.'
