Hong Kong is Over and We Told You This Would Happen

Home | China Law Blog | Hong Kong is Over and We Told You This Would Happen On August 13, 2019, in Hong Kong for International Business: Stick a Fork in It we made clear Hong Kong would soon cease to be an international business center and companies needed to consider moving out. To say this generated anger would be an understatement. In comments, I was called a "turd", "hopelessly naive" someone who "does not understand anything" and told that I was "engaging in a temper tantrum." I got thinly veiled threats (the usual, "China is a paradise for foreigners, but you had better never come here" sort of thing) and called even worse by email. Those whose livelihoods depended on Hong Kong swore Hong Kong was as vibrant as ever and called us "fake news" and said we were "making up stories to fit their own agenda." I am here today to scream to the world that we were right and they were wrong and there is an obvious reason for this. We try our utmost to call things as we see them, no matter whose business that may hurt, including our own. Far too many "China experts" are really nothing more than China cheerleaders, who will say and do just about anything to justify their existence in China/Hong Kong and to try to keep their China money pipeline flowing. There I said it. Anyway, here is what we said back in 2019 that drew so much heat and on which we proved to be so right. Not sure why nobody has just come out and said this yet, but Hong Kong as an international business and financial center is no more. I take no comfort in saying this because I have many friends in Hong Kong and I’ve always loved going there, but Hong Kong’s special position is over. Kaput. Fini. Terminado. 完. законченный. Done. Over. No more. I challenge you to say “one country two systems” with a straight face. For the last few months I have been relentlessly asking everyone I know in Hong Kong or who used to be in Hong Kong or who at one time contemplated setting up a business in Hong Kong how what has been happening in Hong Kong has and will or would impact their doing business in Hong Kong. Based on those responses and on my own experience with how international companies operate, I foresee the following: Companies that were deciding between Hong Kong or Singapore for their Asian headquarters will choose somewhere other than Hong Kong. Growing companies with offices in Hong Kong and with offices somewhere else in Asia will increase their hiring outside Hong Kong and decrease or eliminate their hiring in Hong Kong. Companies with offices in Hong Kong and with offices somewhere else in Asia will be move personnel from their Hong Kong office to their other offices. Fewer contracts will be drafted with Hong Kong as the venue for arbitration. Companies will move their Hong Kong bank accounts elsewhere. It is no coincidence HSBC stock hit its 52 week low today. Travelers will choose somewhere other than Hong Kong as their Asia stopover. It is no coincidence Cathay Pacific stock hit its 52 week low today. Many Hong Kongers will eventually go elsewhere. I am not saying any of the above will be noticeable tomorrow or even a month from now, but I am saying that all of the above have already begun and all of the above will accelerate once China’s army goes in at full force, which is pretty much inevitable. Within two years Hong Kong will be a very different place than it is today and within five years it will hardly be recognizable for those of us who have been there within the last five years. Since the inception of the US-China trade war, this blog has been relentlessly downbeat about the US-China trade war and its impacts. Way back in October 2018, we called the US-China trade war the “New Normal” and in Would the Last Company Manufacturing in China Please Turn Off the Lights, we forecast an inevitable sharp decline in China manufacturing. On May 8, 2019, in The US-China Cold War Starts Now: What You Must do to Prepare, we warned of a “straight line decline in US-China relations” and we laid out what businesses should do in response to that. Our gloomy predictions have angered many, and I get it. What we are saying is not pleasant, especially for those with companies or livelihoods that depend on free trade with China or on Hong Kong remaining as Asia’s leading business hub. But please understand that we are only calling things as we see them, not as we want them to be. As for Hong Kong, we are now suggesting our clients (and you) (1) consider places like Singapore and Bangkok as your Hong Kong replacement, (2) implement plans for evacuating your Hong Kong personnel, (3) cease using Hong Kong arbitration clauses (except with Hong Kong companies), and (4) avoid going there unless truly necessary. If corporate responsibility or data protection are at the core of your business your Hong Kong decisions are more pressing. We reiterated this call again in October, 2019, in Hong Kong for International Business: Stick a Fork in It, Part 2. In that post we wrote about what we were seeing and hearing about Hong Kong's decline: — Going to Hong Kong on the way to the PRC is likely to subject you to increased scrutiny when you arrive in the PRC. — Companies looking to form WFOEs in China are telling us they have heard that using a Hong Kong entity to own the WFOE is now a “bad idea.” Our China WFOE lawyers have not actually seen this to be the case, and even those who tell us this do not have any real evidence to back it up, but just the fact so many believe this is telling. — Some of our own clients are saying they do not want to use Hong Kong arbitration clauses any longer. — Many airlines have eliminated flights to Hong Kong and — near as I can tell — all have greatly reduced their fares on their remaining Hong Kong flights. I have heard countless stories of near-empty flights to Hong Kong and of how incredibly easy it is now to get bumped up to Business Class. — A number of Hong Kong law firms have told me that their business is way down, “for obvious reasons.” — Foreigners with kids are leaving or looking to leave in droves. Why are we so convinced we were right about Hong Kong? Because pretty much everything says we were. And based on what we are hearing from our clients still in Hong Kong and still talking about leaving, I'm betting Hong Kong's decline still has a ways to go. For more on Hong Kong's declining international importance, check out the following: How Singapore stacks up against Hong Kong in battle of Asia hubs Happy Hong Kong? Singapore Has Gone Laughing to the Bank Shifting financial centres sees Singapore overtake Hong Kong Brain-drained HK workforce marks historic decline Singapore Tops Hong Kong as Asia's Leading Financial Center Check Out Our China Law Services Share Twitter Facebook LinkedIn E-mail Comment Dan Harris Dan Harris is a founding member of Harris Sliwoski, an international law firm where he mostly represents companies doing business in emerging market countries. Most of his time is spent helping American and European companies navigate foreign countries by working with the international lawyers at his firm in setting up companies overseas (WFOEs, Subsidiaries, Rep Offices and Joint Ventures), drafting international contracts, protecting IP, and overseeing M&A transactions. In addition, Dan writes and speaks extensively on international law, with a focus on protecting foreign businesses in their overseas operations. He is also a prolific and widely-followed blogger, writing as the co-author of the award-winning China Law Blog. Harris Sliwoski Attorney Read more posts [email protected] Read More International Business Related Posts September 15, 2026 Your AI-Drafted China Contract Says It Needs a Lawyer. Listen to It. September 11, 2026 Forensic Accountants in China Business Litigation: How True Numbers Can Tell the Wrong Story September 4, 2026 China NNN Agreement or Trademark Registration? You Usually Need Both September 1, 2026 AI Didn't Replace Lawyers. It Gave Us the 48-Page Contract. August 27, 2026 Do I Need a China NNN Agreement or a China Manufacturing Agreement? Usually Both. August 26, 2026 China’s New Overseas Investment Rules: Can Your Chinese Investor Actually Get the Money Out? August 24, 2026 International IP Protection for Startups: What to Protect and Where August 19, 2026 The Documents Are the International Deal August 19, 2026 China Supplier Fraud in Yiwu: Why We Recommended the Police, Not a Lawsuit August 17, 2026 China Trademark Registration: Why U.S. Companies Need More Than a Filing Agent August 10, 2026 Buying Expensive Equipment from China: Seven Questions to Answer Before You Pay August 7, 2026 DDP Shipping Risks: What Boise Cascade’s Guilty Plea Means for U.S. Buyers August 6, 2026 Protecting Your Artwork Internationally: What Artists Need to Do Before the Work Travels August 5, 2026 Your China Employee Signed the Vacation Policy. You Can Still Lose. July 29, 2026 The RedNote Contract Lesson for Companies Doing Business in China One response to “Hong Kong is Over and We Told You This Would Happen” You were right then, you are right now. Reply Leave a comment Cancel reply