Hong Kong’s rich preparing for likely worst-case scenario

Bloomberg

One Hong Kong businessman moved $10 million to Singapore and plans to transfer more.
Another is eyeing London property, worried that prices in Hong Kong are too high. Well-to-do families across the city are
opening offshore bank accounts and applying for alternative passports.
While it doesn’t add up to an exodus just yet, Hong Kong’s rich are increasingly hedging their bets as the financial
hub suffers its worst economic and political crises since at least 1997.
Many high-net-worth investors are either reducing their Hong Kong exposure or taking steps to ensure they can withdraw assets at a moment’s
notice, underscoring the challenge for Chief Executive Carrie Lam as she tries to maintain the city’s status as magnet for
Asian wealth. Rich individuals are major players in Hong Kong’s equity and real-estate markets as well as big buyers of Chinese corporate bonds issued in the city.
Private bankers say their clients accelerated contingency planning efforts after China announced last month it would
impose controversial national security laws on Hong Kong. The legislation threatens to erode the former British colony’s judicial independence, provoke sanctions from the US and revive street protests that battered the tourism and retail industries even before the coronavirus outbreak plunged the economy into its deepest recession on record.
“What we’re basically seeing is a bit like a slow-moving train wreck,” said Richard Harris, chief executive of Port Shelter Investment Management in Hong Kong. “People who haven’t moved their money out may be tempted to think: ‘Well, maybe I should be moving my money out.’ That process is likely to continue.” To be sure, there’s little evidence so far of widespread capital flight.
Hong Kong bank deposits increased to a record in April and the city’s currency has continued to trade at the strong end of its permitted band against the dollar. Hong Kong’s wealthiest billionaires have publicly endorsed the proposed security laws and expressed confidence in the city’s future.
Cheng, the businessman who moved $10 million to Singapore, also secured his permanent resident status in the city-state this year and has been selling his Hong Kong properties. He has no concrete plans to emigrate yet, but is considering his options. He and his family have passports from the US, Canada, Australia and France.
Cheng, who was born in Hong Kong, said he worries about China’s tightening grip on the city and the prospect for more unrest. Like several of the people quoted in this story, he asked not to reveal his full name because of the political sensitivity of the subject.
Sam, a senior investment banker in Hong Kong, has decided to leave the city. The 43-year-old is emigrating to Australia with his wife and two young boys in about three months, the second time he will have left Hong Kong during a period of political turmoil.