The survey, conducted jointly earlier this month by three Japanese organisations in Hong Kong, found that 68.6% of respondents said the talent drain and difficulty in finding capable people were the top concern stemming from the NSL, which was imposed by Beijing in June 2020.
That answer rose by 6.9 points compared with the previous poll taken in January. It overtook concerns over restrictions on the free flow of information, which fell 15.7 points to 56.2% in the most recent survey.
“The drain of talent is not only a factor caused by the NSL,” Tomohiro Takashima, director general of Japan External Trade Organization (JETRO) Hong Kong, said in a media briefing Tuesday.
“The promotion of ‘patriotic education’, and the change in children’s educational environment are also big factors,” he said, referring to Beijing’s growing influence over school curricula and textbooks. He also cited strict quarantine rules for pushing people out of Hong Kong.
The drastic change in classrooms, which has happened alongside the implementation of the NSL, has prompted parents with school-age children to leave the city en masse to seek more liberal education opportunities in places such as the UK, Canada, Australia and Taiwan.
According to Hong Kong government statistics, the city’s population at the end of 2021 declined from a year earlier. The second straight yearly drop in the territory’s population was driven mainly by a net outflow of 23,600 people last year.
The talent leakage has also affected how Japanese companies view the broader business environment in Hong Kong. While 6.5% of respondents – 0.8 point less than the January survey – said that the environment had improved compared with a year ago, 23.4% felt that it had either deteriorated or seriously deteriorated, an increase of 2.4 points.
The biggest reason cited for the deterioration of the business environment among the six listed factors – including operating costs, political stability, and the free flow of information – was securing talent, where 43.5% said that had worsened compared with a year ago, marking a 7-point deterioration from the January result. Many respondents cited the talent drain due to emigration as their most pressing concern.
Takashima said the biggest group caught up in the brain drain was people in their 30s to mid-40s. “The difficulty is that companies are not able to find substitutes,” as there are so many in that age group who have left Hong Kong.
In addition to local talent abandoning the city, a much smaller number of expats now works in the city. According to the latest statistics on general employment visas, Hong Kong’s Immigration Department issued 5,701 such visas during the first six months of the year, 72% less than for the same period in 2018, before Covid and the ripples of social unrest in 2019.
“While we are not able to stop the wave of emigration,” Takashima said, the short-term remedy for Hong Kong, according to his analysis, is to “let people to come in”.
The veteran industrial analyst said the current wave of emigration “is much larger in magnitude”, compared with those in the past, and urged the government to loosen Hong Kong’s border restrictions, which are being influenced by Beijing’s strict “dynamic zero-Covid” policy, which seeks to eradicate the virus.
The twice yearly survey was conducted by JETRO Hong Kong, in conjunction with the Japanese Chamber of Commerce and Industry and the Japanese Consulate in Hong Kong, with 266 companies responding.