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Quinton Chan

Pollution, high costs and lure of mainland blamed for diminishing foreign professional workforce

Warnings that Hong Kong is becoming less attractive to top foreign professionals have been underlined by figures indicating that the number of western expatriates working and living in the city plunged last year.

Arrival and departure records of foreign expatriates showed the number of Americans, Britons, Canadians and Australians dropped by 14 per cent - from 93,000 to 79,190 - continuing a steady decline in recent years.

A top government adviser and academics said the city must act quickly to restore its appeal, which they said was being damaged by worsening pollution, high costs and a growing tendency for foreign companies to base their staff on the mainland.

The news came two weeks after an international human resources group said Hong Kong had plummeted down the list of cities favoured by expatriates and suggested companies should offer staff a hardship allowance to work in the city.

'We have to look for ways to resolve the problem,'  Lau Siu-kai, head of the Central Policy Unit, said. 'But there is no quick fix ... The important thing is to keep Hong Kong as the gateway to the mainland.'

The arrival and departure records, collected annually, are used by the government to estimate the number of expatriates living and working in the city.

They do not include tourists or permanent residents.

The biggest decline was among British expatriates - 24 per cent, from 17,780 in 2004 to 13,490 last year. The numbers of Canadians and Australians were down 18 and 15 per cent respectively, while a 5 per cent decrease was recorded for Americans.

The Immigration Department does not have separate figures for the number of expatriates with permanent residence.

But the number of approved applications for permanent residence, including mainlanders, dropped from 68,700 in 2004 to 54,400 last year. The department yesterday could not provide the figures for other years.

The number of western expatriates on work visas has fallen 30 per cent from 113,600 in 1998.

Professor Lau said the latest drop was a concern because it showed that fewer westerners were coming to Hong Kong to work, even though it did not necessarily mean a significant drop in the total expatriate population. He said the government was looking for ways to maintain Hong Kong's attractiveness.

'There are many reasons behind the fall, such as the high living cost in Hong Kong, the poor air quality and the lack of international school places. Also, some working expatriates may have moved up to the mainland,' he said.

He said Hong Kong's housing costs were very high but this was hard to change. 'However, we can simplify our business regulations and improve the city's air quality in the medium term,' he said.

Shen Jianfa, professor of the department of geography and resource management at the Chinese University, said some foreigners might have become permanent residents but the figures  reflected that fewer expatriates were coming to Hong Kong to work.

He said the weaker US dollar was a factor, making salaries paid in the greenback-pegged Hong Kong currency less attractive.

The Australian and Canadian dollars have appreciated by 25 and 30 per cent since 2003.

Christine Loh Kung-wai, of the think-tank Civic Exchange, said the deteriorating air quality in Hong Kong had driven some expatriates, particularly those from the financial sector, to relocate to Singapore. 'The financial sector deals only with money, they can operate in many places, not only in Hong Kong,' she said. 'Those young expatriates are usually with their families and after a quality of life. When they find that their children are getting ill [because of pollution], they would consider moving away.'

But foreign chambers of commerce denied that numbers for foreign talent were falling. Chief executive of the Australian Chamber of Commerce Deborah Biber said: 'I know our memberships are growing and the numbers of Australians working for non-Australian organisations are on the increase too,' she said, adding that the city was still attractive and competitive and its only problem was pollution.



Alarm raised as expats opt to shun HK