Hong Kong’s financial talent pool could be facing unprecedented headwinds as banker inquiries about relocation and jobs outside of the city reach record-high levels, multiple sources told finews.asia.

«This national security law has really caught a lot of people off guard,» an anonymous recruiter specializing in private banking told finews.asia. «Although most are still in the consideration stage, I’ve never had this many calls about leaving. There is no pull factor – this is all push.»

The new legislation – aimed at acts of subversion, secession, terrorism and collusion with foreign forces – is being perceived as a sweeping measure to stifle any acts deemed threatening to the state. Politics aside, the source claimed that professional workers he spoke to expressed concerns about discomfort felt in terms of their day-to-day work or even conversations with colleagues in addition to ongoing unrest in the city.

«This is a very unfamiliar environment for anyone who knows Hong Kong,» the source added, noting that there were inquiries from both local and expatriate workers. «It is natural for those who are capable to consider their options.» 

Target Singapore

Due to its close vicinity and competitive financial sector, Singapore has been a natural target option for workers considering to emigrate even if it historically hasn't been a preference.

«We are seeing not only external inquiries but also some internal ones asking about relocation opportunities from Hong Kong to Singapore,» said another source from a European universal bank.

«[If not for the current situation,] this would be a bit unusual as local Hong Kongers have a historically boasted about how much better their city and lifestyle is. Many have said before that they would never move to Singapore.»

Wait-And-See

Despite the increased interest, broadly reduced hiring activity in the market and an ongoing coronavirus pandemic has made decision-making more difficult. According to both aforementioned sources, most candidates making inquiries to leave Hong Kong are still taking a wait-and-see approach for the time being.

In addition to Singapore, some have also expressed interest in Taiwan and, to a lesser extent, the United Kingdom.

Foreign Wooing

For their part, various foreign governments have also been actively wooing financial talent from Hong Kong as part of their response to Beijing’s tightening rule in the city via the national security legislation.

Shortly after Beijing enacted the law, Taiwan’s government opened an office dedicated to the migration of Hong Kong individuals and companies while its mainland affairs council minister Chen Ming-tong publicly said that it hoped to «attract capital and professionals from Hong Kong to Taiwan, especially talent in the financial industry».

Japan’s Prime Minister Shinzo Abe also welcomed financial workers from Hong Kong to boost talent diversity and transform Tokyo into a leading financial center.

Mainland Exodus Too?

Hong Kongers and expats may not be the only ones mulling an exit. Mainland workers, including bankers, are reportedly packing up to head home – or swap to foreign passports – after Beijing's introduction of a global income tax regime reportedly caught many off guard. Under the new rules, mainland workers in Hong Kong could face a tax rate of up to 45 percent – tripling the current 15 percent.

«In a nutshell, my pay is now subject to the high tax rate on the mainland but I need to cover the high cost of living in Hong Kong,» said a «Bloomberg» report citing an anonymous executive from a Chinese state-owned bank. «It’s a double whammy.»

According to the anonymous banking executive, referred to as «Donald», his firm was working on a plan to provide interest free-loans or cash payouts to affected employees but he doubts the measures will sustain for more than a year. Returning to mainland China is now his top priority.