Why Is Hong Kong Now Less Attractive?

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Hong Kong leadership has promoted the city as Asias World City, equipped with a European-style legal system and business perspectives. It made Hong Kong a popular hub for multinational companies because China was a lucrative market that attracted many potential businesses (Lu et al., 2021). Nevertheless, while once popular, Hong Kong faces many issues that threaten its position as Asias hub for western multinational companies.

Hong Kong is experiencing a wave of governmental control coming from mainland China. With a new national-security law, the place became more hostile toward those who oppose the Communist Party (Wong, 2020). While Hong Kong was previously a safe place, free of Chinas main partys control, now it is slowly turning the opposite way, pushing many companies away from the island and its market. Various companies are currently looking for alternative cities that can provide a similar if not better quality of the market, without the same risks, such as Shanghai or Singapore (Lyons and Yoon, 2021).

Shanghai, in particular, is becoming a rival for Hong Kong in terms of multinational investments. By 2017, the citys synthetic index of innovation capability ranked 4th in the country, as it has for several years in a row (De Giorgi, 2017, p. 111). While some view it as secondary to Hong Kong, others see it as the future hub of an Asian global market that will outplay its competitors. The city has attracted many foreigners, both business people, and immigrants, with its market possibilities.

While Hong Kong remains one of the biggest multinational hubs in the Asian market, its position is beginning to dwindle with the recent government regulations that destabilize its market and scare away many investors. With a rise of competitor cities such as Shanghai and a growing attachment to mainland Chinas economy and politics, Hong Kong risks losing a significant portion of its business attractiveness to foreign businesses.

References

De Giorgi, L. (2017). Alien neighbours: foreigners in contemporary Shanghai. Journal of Architecture and Urbanism, 41(2), 110-119. Web.

Lu, H., Mao, K., & Yue, L. Q. (2021). One China: When do multinational corporations concede to nationalistic activism. In Academy of Management Proceedings, 2021(1), 14306. Briarcliff Manor, NY 10510: Academy of Management. Web.

Lyons, J., & Yoon, F. (2021). Do we need to be in Hong Kong? Global companies are eying the exits, The Wall Street Journal. Web.

Wong, C. H. (2020). Whats in Hong Kongs new national-security law, The Wall Street Journal. Web.

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