On my travels to the United Kingdom this summer, we have visited old friends from Hong Kong who are now living in Manchester and Newcastle. My nephew, born in Baptist Hospital in Kowloon, will arrive next month to study physiotherapy in Bristol. His parents intend to follow.
The joke during the pandemic has been that the only way to leave Hong Kong is to leave for good. With an expensive and obligatory hotel quarantine on your return, the airport has been empty - other than the teary-eyed farewells of relatives bidding off family members. Not since the handover of the territory from Britain to China in 1997 has there been such an exodus, anecdotal evidence suggests, and those perceptions have now been confirmed.
Hong Kong's population saw a net outflow of 113,200 residents in the 12 months through mid-2022, Hong Kong's Census and Statistics Department reported in fresh figures released on Thursday. That caused the city's total population to fall 1.6%.
None of the demographics look good - the city is collapsing in on itself. Emigration is the root cause of the population drop. But there were also more deaths (61,600) than births (35,100), causing a natural decrease of 26,500 citizens. The city's birthrate has dropped by 41.0% in the last five years.
The declines were not offset to a significant degree by the 18,300 immigrants who moved into the city. That's substantially fewer than the daily quota of 150 mainland Chinese allowed to come live in Hong Kong, which could have resulted in fresh blood to the tune of almost 55,000 new souls.
In total, the city's population declined from 7.41 million people to 7.29 million, an overall drop of 121,500 when you add net deaths to net departures. Like Japan, it means Hong Kong is ageing, while the work force is falling.
It is not good news for the stock market, particularly consumption plays as well as the city's prominent property developers. The Hang Seng Index is down 24.0% in the last 12 months. The strong rally in the first half of 2021, when early Covid fears eased, has been thoroughly undone. Hong Kong stocks are at levels last seen in 2016, and are showing no inclination to rally.
Hong Kong's economy is also stuck in the quagmire of recession. It shrank 1.4% in Q2, year on year, exacerbating the 3.9% fall in Q1. On top of that, interest rates are rising in tandem with the United States, since the Hong Kong dollar is pegged to its U.S. counterpart. The peg effectively imports tightening U.S. monetary policy at a time Hong Kong would be best-poised to ease.
It is the Hong Kong government that has brought these problems on itself. It has turned Hong Kong into Beijing's colony, also importing the mainland's oppressive one-party-state dictatorship, and eviscerating the freedoms that Hong Kongers used to enjoy.
The government statistics department blames the pandemic, and Hong Kong's quarantine, which was originally a prohibitive 21 days. Hong Kongers may be staying abroad and waiting for the situation to ease before they come back home, a spokesperson suggested rather optimistically.
"It is believed that the pandemic and the related quarantine requirements would have impacted talent inflow," the unnamed spokesperson said in the department's commentary, which could resolve when quarantine and social-distancing measures are eased. "Meanwhile, Hong Kong residents who had left Hong Kong before the pandemic may have chosen to reside in other places temporarily or were unable to return to Hong Kong."
Hong Kong has at last cut its quarantine to three days, which you must pay yourself in an expensive hotel. I explained the ramifications on Monday, but travel and consumer plays likely won't recover until all quarantines are gone - just as they have been lifted in the Western world.
A lot of Hong Kongers have gone, and aren't coming back. They're typically young and educated. This trend first appeared last year, after Beijing imposed a draconian National Security Law in July 2020 that has been used to stifle all critics. The net outflow of Hong Kongers last year, for the 12 months through mid-2021, tallied 89,200. Now we see that the emigration has intensified in the last year.
Since the National Security Law was imposed, the city has lost more than 200,000 Hong Kongers. They're not waiting in London, or Toronto, or Sydney, or Los Angeles, desperately looking to rebook their flights to Chek Lap Kok. They're diligently carving out new lives for themselves as immigrants. And they've taken their brains and their money with them.
The government spokesperson made no mention of the National Security Law, or the desire of many Hong Kongers to leave. "Flight boarding restrictions" get a mention, but the topic of Beijing and its iron-fist rule goes unremarked. The closest the government comes to recognizing the emigration exodus is to note that Hong Kongers don't have to declare their motives for leaving, whether for emigration, work or study.
"Therefore, the Government does not have direct statistics on emigration of Hong Kong residents," the spokesperson said. "Being an international city, Hong Kong's population has always been mobile." People come, they go.
In fact, I would argue that the pandemic has probably caused fewer people to leave than otherwise might. Those who do go have been taking a leap into the unknown - a tennis teammate of mine departed for a new life in Coventry, a city in the British Midlands near Birmingham that he had never visited. Friends told him on Zoom that it was pleasant, with good schools, and that was good enough for him.
But it takes a certain boldness, a level of desperation and a strong-headed person to depart for shores unseen. To my mind, more Hong Kongers would have left had they been able over the last 2-1/2 years to travel to foreign cities and check them out, to make some preparations on the ground before leaping from their hometown for good.
I have a British passport, but I'm not overly keen on a return. However, the political situation in Hong Kong does make me think that there's little future in the city for my teenage kids. My sister, who married an Aussie and lives in Sydney, makes Australia seem attractive. But the last time I went Down Under was a decade ago, and I can't say I know the country well. Given a little time to visit Sydney, or Brisbane, or Melbourne, or Perth, we might feel a little more confident about the upheaval.
My father is South African, and there has also been a steady flow out of South Africa for the better part of 30 years to points all over the world. Australia has a similar climate and outdoors lifestyle. The Aussies used to joke that "Saffers" were on LSD trips when they visited Australia: Look, See, Decide.
My family's U.K. trip, which will be topped and tailed by visits to Portugal and the Netherlands, is also a bit of an LSD trip. No, we won't be nibbling any brownies in Amsterdam's hashish-friendly "coffeeshops." But we are trying Europe on for size. Australia, once the quarantine comes down, would be our next destination.
Look, See, Decide. Hong Kong is becoming unrecognizable to my wife, her hometown a shell of its former glory. Where next, though, would she feel comfortable to call home?