COVID, the pro-democracy crackdown and China's trade war with the United States have dealt a severe blow to Hong Kong's reputation as an international financial hub. Once seen as the main gateway between the West and China, many investors now believe it is increasingly hard to separate Hong Kong from the authoritarian mainland — a dilemma that has sparked an exodus of foreign firms from the city known as the Pearl of Asia.

Since 2019, the number of global companies with regional headquarters in Hong Kong has fallen by 8.4%, according to data from the city's census and statistics department. The figures are even more stark among US firms, a third of whom have shifted out of Hong Kong over the past decade, the Wall Street Journal reported recently. Those multinationals that remain have cut headcount in the semi-autonomous city by nearly a third over the past four years.

After having a national security law imposed by Chinese President Xi Jinping in 2020, Hong Kong's legislators have just passed further legislation that rights groups say will all but wipe out dissent. The first put paid to the yearlong democracy protests, saw hundreds of activists arrested and shuttered independent media outlets. The second makes it even easier to target individuals, companies and civil society groups deemed to be anti-government and anti-Beijing. Many foreign investors are just as worried.

The US Consul General to Hong Kong Gregory May........

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