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What's Driving Hong Kong's Uptick In Emigration?

The Tsim Sha Tsui area in in southern Kowloon, Hong Kong
The Tsim Sha Tsui area in in southern Kowloon, Hong Kong
Dai Tian

HONG KONG — While migrating to Hong Kong has become trendy for certain Chinese middle-class families, a wavelet of Hong Kong’s own middle class seems to be moving off the wealthy island.

According to data from Hong Kong’s Security Bureau, some 3,900 people emigrated in the first half of this year. Though this is still far fewer than the tens of thousands of people who left every year before the island’s handover to China in 1997, it is nonetheless a sign of a new trend.

Chen Xiaoyi, a migration agent specializing in Canada, says there have been a “massive number of requests” recently from those looking for information about emigrating. “Some migration intermediary agencies are obliged to hold migration seminars on weekends,” Chen explains. “Such seminars were very popular before 1997 and then disappeared for years.”

The 30-year-old Audrey and her husband Samson chose to move to Australia last August. “Hong Kong’s living space is tiny,” she says. “It’s hard to buy property. The air is bad, and the work pressures are heavy. In an economic downturn one can be laid off anytime.”

According to a Hong Kong government annual report, an average of 20,000 people moved abroad annually in the early 1980s. At its peak, this rose to around 60,000 people a year in the early 1990s. The emigration tide had fallen below 10,000 since 2003.

According to the latest report by the Hong Kong government, the main destinations of Hongkongese are the United States, Australia and Canada. And 2011 saw the first increase in the number of people leaving in a decade. Based on data from Hong Kong’s Security Bureau, 3,900 residents relocated abroad in the first half of this year, 8.3% more than during the same period last year. The total number of people who moved out of Hong Kong last year was 7,600.

The reasons for leaving include politics, the economy and education, says Ho.

It’s the economy

In 2012, Hong Kong’s real GDP grew 1.4%. The growth is expected to be between 2.5% and 3.5% this year. Due to the features of its tiny, liberal and free economy, Hong Kong is vulnerable to external economic shocks. As its 2012 annual report showed, the island’s economy has undergone a significant slowdown since mid-2011. Because the European debt crisis is not resolved, the recovery of major advanced economies is weak. This is challenging for Hong Kong’s trading environment and its services exports.

Whereas the previous waves of those leaving were victims of real estate devaluation in the financial crisis, with the middle class losing their biggest assets, now people are leaving because real estate prices are soaring, says Chen. Since Hong Kong homeowners don’t know when the housing prices will fall, they prefer to sell while the prices are still good, said Chen. More than 70% of Chen’s clients have expressed interests in selling their Hong Kong properties.

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Hong Kong's Victoria Harbor — Photo: Ding Yuin Shan

Meanwhile, based on the International Housing Affordability Survey conducted by Demographia, which looked at more than 300 cities worldwide, Hong Kong has the least affordable housing. According to a Bank of America Merrill Lynch property market outlook report released in October, Hong Kong’s property prices are expected to fall by 5% this year, and by 15% next year.

As Ho says, half a million euros of investment would buy a resident permit in Portugal, whereas it’s not enough even for a small Hong Kong apartment.

Everything’s political

At the same time, ever since Leung Chin-Ying became chief executive of the island last year, he has been highly controversial, as many of his top staff have been involved in scandals.

“Regardless of whether they are wrong or right, the involvement of senior officials in scandals has led to people distrusting the government and has affected government administrative efficiency,” says Rita Fan, former chair of the Hong Kong Legislative Council.

“Hong Kong’s political situation right now is in the biggest mess of the past 12 years,” adds Ma Ngok, associate professor of politics and administration at the Chinese University of Hong Kong.

Don't forget the kids

Chen Xiaoyi notes that 80% of her clients are middle-class people with children from newborns to teenagers. And emigration is often driven by a desire to give kids a better education.

Stephanie went to Canada with her parents before the former British colony’s handover, but she returned to Hong Kong on her own afterwards. This year, she decided to return to Canada with her husband and her 5-year-old son. She is convinced that her children will receive a better education there, just like her parents believed.

“All the parents around me arrange intense activities for their kids,” Stephanie says. “Otherwise it just seems impossible to compete with other children.” She says that were her son to stay in Hong Kong he would be obliged to follow the rules of the game, which create too much stress and competition.

Thoug evidence seems to suggest a definitive disillusionment in Hong Kong, some experts caution against interpreting the latest news as another wave of emigration.

“It’s true the number of people moving abroad has increased, but it's because the global economy is sluggish, whereas Hong Kong is near China so everybody else thinks that it has better prospects and a more active economic environment,” says attorney Huang Shuyun.

Indeed, some of her clients even gave up their U.S. citizenship now that the country taxes its citizens’ gains abroad. While the West continues to struggle to pull itself out of crisis, Hong Kong has a solid economy and perhaps the world’s simplest and most transparent tax system. There will always be people leaving Hong Kong, Huang says, but plenty of new people coming too.

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