What started as a bold threat from the US Secretary of State Mike Pompeo, has been stripped of any pretence of mere possibility, as President Donald Trump declared Hong Kong is to officially have its special trade status revoked.
In a 63 minute speech that could kindly be described as ‘disjointed’, President Trump covered many topics — the only one of genuine lucidity however (at least to Asia), was his making good of a promise saying, ‘Hong Kong will now be treated the same as mainland China’.
The dramatic move comes of course in response to China’s escalating involvement with Hong Kong, most recently with its imposition of its controversial national security law. The law very loosely bans ‘secession, sedition, and subversion’ of the Mainland — undermining the ‘one country, two systems’ agreement, and ultimately posing serious threats to Hong Kong’s democracy.
China’s national security law in Hong Kong will, among other things, allow for warrant-free raids on all businesses, domestic or foreign, demanding companies delete data promoting succession, sedition, or subversion from the Mainland. Fines and prison sentences await those who do not comply.
It should be noted that the revocation of Hong Kong’s special status is no ordinary folly from the often blusterous President — it has the bipartisan support of the United States Senate. This is a clear sign to all that the United States, the number one economy in the world, is playing hardball in response to China’s geopolitical meandering.
What this surely means for foreign businesses operating in Hong Kong however, is that they should likely be looking for an exit strategy out of the Special Administrative Region (SAR) of China as soon as practicably possible.
Hong Kong’s plight is wholly lamentable, but it is unfortunately time for corporations using Hong Kong as an Asian base to look elsewhere for security, not to mention basic safety.
This is not a battle Hong Kong will slink out of unscathed — China has too much tied up in their geopolitical ambitions to worry about spoiling an economy as relatively small as Hong Kong’s.
In my humble but confident opinion, the only real beacon of security and genuine prosperity for those ostracised from Hong Kong, is Singapore.
We are indisputably the world’s freest economy. Deloitte ranked Singapore as the second best international wealth centre in 2018, and the World Economic Forum gave Singapore the top ranking for competitiveness. Crucially, we also cannot overlook the fact that English is an official language in Singapore, something other suitors like Bangkok, Tokyo, and Taipei cannot offer.
For better or worse, China is the world’s manufacturing capital, and one of the biggest cogs in the world’s economic machine. They cannot be completely avoided or dismissed, and any organisation serious about their global affairs should be looking at Singapore as a close, but politically insulated bridge to China.
Each company of course will have to make its own decisions as to the urgency in which they will want to leave Hong Kong — wherever they are in the decision process however, I would strongly advise them to at least reach out for advice.
The end decision itself might be simple, but the logistics are not, so they will need a strong and established partner to help them in such an operationally challenging shift. I know we have systems in place for the changing tide, and we are ready to help.
As concerned kin of Hong Kong, we continue to hope they find their feet in the near future, but until then, Singapore will be waiting with open arms to welcome those looking for the safe harbour of surety and continued prosperity in otherwise disturbing times. Singapore company Incorporation process is quite straight forward. You can be connected with me if you want to know anything about setting up business in Singapore.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Hongkong Business. The author was not remunerated for this article.
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Eric is the Chief Business Development Officer (CBDO) of InCorp Group. He provides consultancy to local and foreign entities on the ideal market-entry strategies for setting up or expanding operations in Southeast Asia.
Before joining InCorp, he was the Senior Vice President and Team Lead of the International Subsidiaries Banking division of HSBC and OCBC.
An ex-corporate banker for more than 11 years, he has extensive experience in working with companies of different sizes: tech startups, scaleups, international SMEs, and multinational corporations in Singapore and the rest of the world.
At present, Eric regularly participates as a guest speaker in business forums sponsored or organised by the Singaporean government or by InCorp’s corporate partners. He also participates as an advisor in mentorship programs for tech startups in Singapore.