Hong Kong’s Controversial Extradition Bill Sparks Over $10 Billion Capital Outflow, Huge Exodus of Elites

By Olivia Li, Epoch Times
June 25, 2019 Updated: June 26, 2019

Although Hong Kong Chief Executive Carrie Lam announced a suspension of the extradition bill, the move hasn’t restored public confidence.

A senior banker revealed that Hong Kong’s wealthy families transferred about $10 billion in funds to offshore accounts earlier in June. Tellingly, the number of emigration inquiries has increased multiple times recently, and surpassed the inquiry hike that occurred five years ago during the “Umbrella Movement.”

The Hong Kong government’s proposed amendments to its extradition laws would allow any country, including mainland China, to seek extradition of fugitives or criminal suspects. The proposed extradition bill has sparked widespread fear and anxiety given China’s disregard for the rule of law. More than 1 million Hong Kong residents participated in a mass parade on June 9 to protest the controversial bill, and police used violence to disperse demonstrators on the following days. Outraged Hongkongers organized another mass parade on June 16, with more than 2 million participants, to protest the extradition bill and previous police brutality.

Lam later announced that the bill would be suspended indefinitely. But Hongkongers are not satisfied and seek full withdrawal of the bill.

Outflow of at Least $10 Billion in Funds in June

Hong Kong has always ranked in the top ten globally in billionaire residents. According to the most recent report released by Wealth-X, a market research firm focusing on ultra-high net worth individuals, Hong Kong, with 87 billionaires, is ranked as the second most populous billionaire city after New York, which has 105 billionaires.

Citibank’s April report this year stated that roughly 7 out of 100 Hongkongers have a net worth of $10 million, which means, in a city of 7 million people, there are about 490,000 residents whose assets exceed $10 million.

Dr. Victor Ming Tak Ng, a Hong Kong senior banker and visiting professor at the Baptist University in Hong Kong, revealed to The Epoch Times that Hong Kong tycoons have recently accelerated asset transfers to foreign countries. He learned from a friend in the financial circle that between the two mass parades on June 9 and 16, at least $10 billion was transferred to offshore accounts.

He added that customers of a well-known bank with branches all over the world could transfer the money in their accounts from Hong Kong to other countries using a one-button operation. The recent transfers all involved wealthy individuals.

Ng anticipated that Lam will likely be replaced, as Beijing is unhappy with her handling of the extradition bill; but Beijing’s control of Hong Kong is anticipated to increase. If the United States imposes stricter sanctions on China or revokes Hong Kong’s position as a special trade zone, it will be a crushing blow to Hong Kong’s economic and business environment.

“If Hong Kong’s special trade status is revoked, Hong Kong will lose at least 50 percent multi-millionaires,” said Ng.

Previously, a June 14 report by Reuters quoted a financial advisor saying that a Hong Kong resident who considers himself potentially politically exposed “has started shifting more than $100 million from a local Citibank account to a Citibank account in Singapore.”

Richest People Leave Hong Kong for Singapore

Chen Ping, a descendant of Communist Party elders and a billionaire who has lived in Hong Kong for many years, told The Epoch Times that after proposed amendments to the Fugitive Offenders Ordinance, many wealthy people he knows sold their homes in Hong Kong and transferred their assets to other countries such as Singapore. “When human rights and the rule of law cannot be guaranteed, they definitely want to leave,” Chen said.

He recently gave a speech in Singapore at a seminar, hosted by billionaires from mainland China, where he met with many former and current business owners in China. Most of them were top executives or owners of listed companies.

Chen revealed that all of them have a net worth of more than $100 million and originally lived in Hong Kong but have moved to Singapore. According to Chen, about 2 million mainland Chinese have moved to Singapore in recent years. The sudden influx of expatriates has skyrocketed home prices in Singapore.

Immigration Firm: Inquiries Noticeably Increased

Many Hong Kong residents say they plan to immigrate to other countries. According to an immigration consultant, immigration inquiries have increased dramatically, including foreigners living in Hong Kong.

Mary Chan, an adviser at Rothe International Canada, Hong Kong Immigration Consultancy Service Company, told The Epoch Times that after the vast parade on June 9, immigration inquiries “increased two to three times,” with about 10 email inquiries every day. “Even some foreigners who have lived in Hong Kong for a long time wrote to us to seek immigration consultation,” she said.

The Umbrella Movement five years ago caused a spike in immigration as well, but Chan said the number of people intending to emigrate is a lot higher than five years ago. Among her current clients, there are high-income professionals, middle-class, and even government officials.

Chan explained that these people feel that Hong Kong is not as comfortable as it used to be. “Although (Beijing) promised that Hong Kong’s autonomous status would remain unchanged for 50 years, it has already started to change. Moreover, many people are tired of the living conditions here, jam-packed buses and subways, more social conflicts. Anyway, society is not as harmonious as before.”

In addition, there are about 300,000 Hongkongers holding Canadian citizenship who are able to go to Canada anytime.

According to Chan, those who are in the process of emigration are also selling the properties they own in Hong Kong and transferring money to their target countries.

Joseph Yau, an immigration consultant at JR Marriott Migration Consultancy Limited, also told The Epoch Times that recently, inquiries have doubled. “It’s mainly because they have lost confidence in the future of Hong Kong,” he said.

According to Yau, many young people, including singles, are applying for immigration, which is a prominent feature during this wave of applications.

“The extradition bill is a catalyst,” he said. “In addition, some people want to emigrate to other countries because they want their children to receive a better education or live a better life.”

In addition to the most popular destinations like the United Kingdom, the United States, Australia, and Canada, some inquired about opportunities in European countries such as Ireland and Portugal, where there is no minimum residency requirement and this enables emigrants to these countries to obtain residency status quickly.

“Even if Carrie Lam eventually withdraws the extradition bill, it is hard to say whether the emigration wave would be reversed,” Yau said. “Because it is a matter related to confidence. It remains a test for the current Hong Kong government as to what it would do to restore Hong Kong citizens’ confidence in Hong Kong.”

Hong Kong Issue Has Become a Key Issue in U.S.-China Trade Relations

Kevin Tsui, an associate professor of economics at Clemson University in the United States and a member of the Economic Research Center at Hong Kong Institute of Asia-Pacific Studies, believes the emigration and capital outflow will only continue given the current political and economic conditions.

Tsui pointed out that Hong Kong has become one of the key issues in U.S.–China trade talks. Although Beijing claims it won’t allow Hong Kong protests to be brought up at the upcoming G-20 Summit, Tsui believes the U.S. State Department will definitely continue to discuss the situation in Hong Kong, including considering revocation of Hong Kong’s special trade zone.

Epoch Times reporters Liang Zhen contributed to this article.

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