Dagen HK Article(English)
More and more of Hong Kong’s super-rich are preparing evacuation of family members and capital to countries such as Portugal and the United States. The reason is the city’s growing conflict with Beijing. Now there is also speculation about an attack on the Hong Kong dollar.
“Nobody calls me until they are scared, and I really mean scared. Right now, the super-rich people from Hong Kong are calling, ”says David Lesperance, founder of consulting firm Lesperance & Associates, which for the past 30 years has helped wealthy families relocate to new countries.
According to him, the increase in inquiries has increased successively in recent years but has exploded in total in recent weeks. A year ago he received just over one enquiry from Hong Kong per month.
After rumors began earlier this year that the Hong Kong government was planning to introduce a controversial extradition act with China, which analysts believe would undermine the legal security of the former British colony, inquiries increased to one per week.
Now that pro-democracy demonstrations are raging on the streets of Beijing and Beijing is threatening to deploy Chinese military, David Lesperance is getting a request almost daily.
“More and more wealthy Hong Kong residents are realizing that they and their families need an emergency plan, with residence permits in other countries, if they need to leave the city very quickly,” said David Lesperance, who is from Canada but based in Poland.
One of the most popular destinations is Portugal, he says. It is one of Europe’s simplest and cheapest countries for so-called golden visas, which gives access to 26 countries in the Schengen area. Other destinations such as the United States, Canada, Australia, Singapore or the Caribbean are also common.
The cause of the unrest is not the clashes between protesters and police in Hong Kong per se, but rather the underlying problems. Although Hong Kong is governed by the “one country two system” principle, concerns over the city’s partial autonomy have been eroded.
The proposed Extradition Act, which is now paused but not scrapped, also means that assets can be confiscated and family members fortified with an outlaw ban. That Beijing threatens to send in the military “was a further shock to the business elite,” says David Lesperance.
He goes so far as to compare the situation with those in Poland who fled just before the country was attacked by Germany in 1939.
“Pessimists leave and live. Optimists stay and die. My clients are becoming increasingly pessimistic, ”he says.
Several other consulting firms that specialize on the relocation and international real estate agents confirm the picture.
Edward Mermelstein, founder of asset management firm One & Only Realty in New York, tells the South China Morning Post that the number of applications from the super-rich in Hong Kong has skyrocketed in recent months.
“Hong Kong drilling traditionally was only investors and had no intention of moving to the United States. Today, the ambition is definitely to relocate both families and businesses, ”he says.
“We have handled numerous transactions for clients from Mainland China over the past ten years. But I have never seen the interest from Hong Kong increase so much as now. ”
Kingston Lai, founder of the Asia Bankers Club, tells the magazine that the number of requests to emigrating from Hong Kong has tripled in recent weeks, and predicts that it will continue to increase as the conflict between Hong Kong and Beijing worsens.
It is not only the super-rich who are planning the exit, but people from several parts of society. The number of applications to immigrate to Taiwan increased in June and July by just over 50 per cent compared with last year, according to the Swedish Immigration Service.
From year-end to August 11, 2,027 Hong Kong residents had applied for a residence permit in Taiwan this year, of which 95 percent were approved, according to the SCMP. Personnel at Taiwan’s immigration office are reported to be working a lot of overtime to catch up with the storm.
At the same time, the Hong Kong conflict has become central to the US- China trade war. Donald Trump said on Sunday that Beijing must resolve the situation in Hong Kong without military force before a trade agreement can be reached.
Hong Kong Finance Minister Paul Chan Mo posed last week’s forecast for GDP growth to 0-1 percent for this year, from the previous forecast of 2-3 percent. Several analysis houses predict that the city’s economy is heading into recession.
At the same time, there is rumoured to be an attack against the Hong Kong dollar, and that it will lose its peg against the US dollar. As Di previously reported, many of the city’s financial and real estate magnates have raised large amounts of capital, especially to Singapore.
According to Bloomberg, options traders are increasingly aggressively speculating against the Hong Kong dollar.
“Hong Kong is currently sitting on one of the world’s largest financial timer bomb,” said US investor Kyle Bass, founder by Hayman Capital, earlier this year.
Hong Kong’s de facto Riksbank states that they have “enough ammunition” to defend the currency.
On Sunday, hundreds of thousands – organizers say 1.7 million-demonstrated in Hong Kong against the government. At the same time, demonstrations raged for and against the Hong Kong conglomerate world, from London to Toronto.
David Lesperance predicts increased demand for relocation from Hong Kong.
“You don’t buy home insurance when the house is already burning, but before. And we all already know the smell of smoke,” he says.