Will Japan PM Suga’s latest moves help Tokyo take Hong Kong’s finance crown?

Prime Minister Yoshihide Suga says Japan plans to offer tax and other perks to lure foreign firms and talent to Tokyo but will these proposals become reality?

Recruitment firms say uncertainties in Hong Kong and financial inducements by Japan could help some companies make the jump

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Both the government of Japan and the city authorities of Tokyo have ambitions to turn the Japanese capital into the financial hub of the Asia-Pacific region and put it on a par with London and New York.

Published: 9:30am, 8 Oct 2020Updated: 10:01pm, 8 Oct 2020

One of the Asia-Pacific’s leading recruitment agencies began to receive the first, tentative inquiries about opportunities in Tokyo in the early months of the year, as international corporations with their regional headquarters in Hong Kong felt out the alternatives.

Already spooked by the unrest that has plagued Hong Kong in the last couple of years, companies were further concerned about the controversial national security law – that went into effect on June 30 – and the implications of Beijing tightening its control over a city that has long enjoyed broad freedoms.

The coronavirus pandemic abruptly shut down the initial inquiries about Japan, said Vijay Deol, the Tokyo-based managing director of En World, as companies prioritised staying solvent ahead of relocating their operations. But Deol expects the approaches to start again as soon as the health crisis has been brought under control and restrictions on travel are lifted.

“We heard the rumblings out of Hong Kong back at the start of the year, with companies and executives worried about the changes there and the restrictions being imposed on freedoms,” Deol told This Week in Asia.

“Things were just about getting to boiling point when the coronavirus broke out,” he said. “The virus means that relocating a major business is not feasible now as many companies are in survival mode, but this is definitely something that is going to come up again in boardrooms when the crisis is over.”

This will be music to the ears of the government of Japan and the city authorities of Tokyo, both of which have grand ambitions to turn the Japanese capital into the financial hub of the Asia-Pacific region and put it on a par with London and New York.