Hong Kong’s officials are confident that talent will come back and stay with city’s ‘0+3’ quarantine easing

Hong Kong’s ranking in the Global Financial Centres Index slipped to fourth place as many professionals left the city out of their frustration with Covid-19 rules
The exodus has led to a severe shortage of talent across the job market from banking to teaching, forcing many employers to raise their salaries to attract applicants

Banking & finance

Enoch Yiu

Published: 4:45pm, 27 Sep 2022

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Hong Kong’s officials are confident that they can attract bankers, fund managers and other finance professionals to return to the city, now that one of the strongest reasons for their exodus has been removed with this week’s “0+3” quarantine rule.

The quarantine policies to contain “Covid-19 may have hampered our attractiveness and retention of talent, but we will soon reconnect with the world and talent will return,” Financial Secretary Paul Chan Mo-po said during the annual conference of the Hong Kong Institute of Bankers (HKIB). “We are determined to roll out a message to attract more people to come [back] to Hong Kong.”

Chan’s confidence ran in the face of a survey by the London-based Z/Yen Partners, which showed Hong Kong slipping to fourth place out of 119 markets in the Global Financial Centres Index, behind New York, London and Singapore. More than 113,000 residents have left Hong Kong in the 12 months through June, according to government data, which did not show the number of new immigrants arriving in the same period.

The exodus has led to a severe shortage of talent across the job market from banking to teaching, forcing many employers to raise their salaries to attract applicants. Professionals with transferable skills, many of them with families abroad, were most prone to leaving because of their frustration with Hong Kong’s previous quarantine rules, slashed from 21 days last year to three days in August.

Financial Secretary Paul Chan Mo-po speaking at the annual conference of the Hong Kong Institute of Bankers (HKIB) on 27 September 2022. Photo: Handout

“It is clear that there has been an exodus of talent, both local and foreign, from Hong Kong, and Singapore is often a favoured destination,” said Lee Quane, Asia regional director at ECA International. Singapore’s recent changes in immigration policies “may succeed in retaining talent .. from Hong Kong to Singapore, particularly given the disparity in the two cities’ policies in dealing with Covid-19.”

One in five fund management companies operating in Hong Kong had to offer hardship allowances to maintain expatriate staff in the city, according to a July survey by the Hong Kong Investment Funds Association (HKIFA).

“We face significant talent gaps in ESG (Environmental, Social and Governance), finance, fintech, [expertise of dealing with] the Greater Bay Area, and wealth management,” said Arthur Yuen Kwok-hang, deputy chief executive of the Hong Kong Monetary Authority (HKMA), who spoke at the HKIB conference.

Arthur Yuen Kwok-hang, deputy chief executive of the Hong Kong Monetary Authority (HKMA), during a briefing on virtual banking at the HKMA Auditorium in Central on 30 May 2018. Photo: Jonathan Wong

“Some banks were so desperate that they were [poaching] people from the HKMA,” with buyout offers for them to start work the day after their resignations, he said.

Chief Executive John Lee Ka-chiu made the right decision to scrap the seven-day quarantine rule for inbound travellers, delegates to the HKIB conference said. The new “0+3” rules that took effect this week required just three days of medical surveillance at home or in a hotel, allowing business travellers to work and meet clients.

“That first zero is the real deal,” said Charles Li Xiaojia, who founded the investment platform Micro Connect after retiring as chief executive of Hong Kong Exchanges and Clearing Limited (HKEX).

Charles Li Xiaojia, who founded the investment platform Micro Connect after stepping down as chief executive of Hong Kong Exchanges and Clearing Limited (HKEX), photographed in Central 26 September 2022. Photo: Xiaomei Chen

“[Chinese emigrants] and people who do not feel welcomed in the Western world, like many scientists and technology experts, are going to be [here],” said Li, who grew up in Beijing before making his career in Hong Kong. “Their technological expertise and creativity can create a lot of opportunities for innovation here.”

The HKMA is going on a charm offensive, inviting top executives from dozens of the world’s largest banks, funds and asset managers to Hong Kong on November 1 and 2 to assure them that the city is back for business.

“Hong Kong is ultimately the ideal place for them,” said Chan, citing one of Asia’s lowest tax rates, a world-class international school programme, diverse cultural activities, rich variety of cuisines and a climate that is conducive to water activities and trekking.

Ultimately, it is Hong Kong’s unique location on the doorstep of the world’s second-largest economy that will make the city indispensable for any business with a China strategy, delegates and officials said.

One of the 11 cities of the Greater Bay Area (GBA), Hong Kong also offers companies a front-row seat to access one of the world’s most vibrant growth centres, with a combined population of 70 million people and a US$1.5 trillion economy, Chan said.

The opportunities offered by the GBA, and in the various Connect cross-border investment schemes from bonds to wealth management will attract talent, he said.

Enrolments for ESG courses surge in Hong Kong amid demand for skills

Hong Kong reopening and return to business will not end with the “0+3” quarantine policy, as Lee’s administration will continue to “navigate Hong Kong out of the adverse impact of the pandemic in a safe and sustainable manner as quickly, and as practically as possible.”

“Above all, we know that connectivity is our lifeline,” Chan said. “One of our most distinctive advantages, and this is why I’m confident that as short-term difficulties are overcome, Hong Kong’s long term prospects remain tremendously promising.”