Once seen as the main thoroughfare linking the West and China, Hong Kong has watched its reputation as an international financial hub plummet as Beijing increases surveillance and repression in the semi-autonomous territory.
For many investors, the coupling of the former British colony with Xi Jinping's authoritarian regime is becoming increasingly clear, which is why large companies have left the city en masse.
Data from the Census and Statistics Department of the administrative region show that, since 2019, the number of foreign companies with regional headquarters in Hong Kong has fallen by 8.4%. The numbers fall even more among American companies, a third of which have left Hong Kong in the last decade, the newspaper recently showed Wall Street Journal. Some multinationals that remain based in the city have chosen to reduce their headcount by almost a third in the last four years.
This drastic drop in investor interest in the region is one of the main effects of China's greatest dictatorial repression in the territory, with the national security law, imposed in 2020 by the Xi dictatorship, which provides for increasingly stronger surveillance in the region, in order to avoid dissent.
According to the German newspaper D.W.Hong Kong lawmakers are expected to soon pass new legislation that rights groups say will virtually end any opposition to Beijing.
This Chinese reaction was already seen during the year-long democracy protests in the region. The actions resulted in the arrest of hundreds of activists and the closure of independent media outlets at the time. This new legislation promises to make it even easier to locate individuals, companies and groups considered a threat to dictator Xi and his regime.
According to the US State Department, the new security law will adopt “broad and vague” definitions of state secrets and external interference that could be used to silence critics. In other words, businesspeople based in Hong Kong will be even more monitored by the Asian dictatorship.
In an interview with the portal Bloombergthe US consul general in Hong Kong, Gregory May, recently warned that some American companies use phones and portable computers when visiting the city due to distrust of data security.
Hong Kong, once considered the world's financial center, fell to second place in the Economic Freedom Index, losing the top position it had held since the ranking's creation. for Singapore, which now hosts around 4,200 multinationals with regional headquarters there, while the Beijing-controlled territory was left with 1,336, according to the Bloomberg Intelligence.
The Hong Kong Stock Exchange index, the main indicator of stock market performance, currently trades around 50% below its 2018 all-time high and just a hundred points above what it achieved in 1997, when the territory was returned to China by the United Kingdom.
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