Hong Kong leader John Lee presented his 2022 policy address today with a strong emphasis on a global recruitment drive. Will the troubled financial hub be able to reverse the talent flow?

Hong Kong chief executive John Lee delivered his policy address for 2022 and unveiled a host of measures with no small focus on attempting to ignite a turnaround for the global hub, especially in finance.

Chief among the issues that were addressed for Hong Kong, which has been under the pressure of political tensions and Covid curbs for over three years, was the reversal of the talent outflow.

What Say John Lee?

As expected, Lee rolled out a number of incentives during his policy address in a «trawl for talent», according to the official transcript, after the city’s workforce shrunk by about 140,000 over the past two years

This includes a «Top Talent Pass Scheme» targeting individuals with an annual salary of HK$2.5 million ($320,000) or above as well as individuals graduating from the world's top 100 universities with at least three years of work experience over the past five years. Recipients of this pass will be allowed to stay in the city for two years and explore local opportunities. Eligible incoming talents can also apply for a refund of the 30 percent stamp duty for purchasing residential property upon becoming a permanent resident.

A dedicated office to attract business and talent has also been set up.

Full Reopening?

But what remained elusive was a clear roadmap for a full reopening of the city. While border controls have been loosened in time for marquee events like the Hong Kong Sevens rugby tournament and the global financial summit, inbound travellers still need to undergo three days of self-monitoring and numerous local restrictions remain in place.

As a reference, Beijing doubled down on its zero-Covid policy during Chinese President Xi Jinping's 20th Party Congress speech on Sunday while also underlining the importance of the «one country, two systems» framework. A number of banks, such as UBS and UBP, predict that the second-largest economy could pursue relaxation starting in March next year.

Talent Exodus

The Hong Kong government faces no easy feat in closing the city’s widening talent gap, especially with a number of other hubs not only also offering their own incentives but also rapidly pursuing full reopening.  

A survey in August by industry body Hong Kong Investment Fund Association (HKIFA) found that 35 percent of global asset managers had moved regional and international posts out of the city. In 2021 alone, a report by recruitment firm Robert Walters estimates that more than 718 professionals left for Singapore – a key beneficiary of the talent outflows. 

Overall, Hong Kong’s population registered a second consecutive annual decline, as of mid-2022, shrinking 1.6 percent to 7.29 million with a net outflow of 113,200 residents, according to local census data.

Financial Hub Plans

The policy address also included a section on maintaining Hong Kong’s positioning as an international financial center.

Areas of focus include enhancement of its fundraising platform, growth of the offshore yuan center, further promotion of mutual market access with mainland China and development of green and sustainable finance.