Foreign companies downsizing, not quitting Hong Kong: InvestHK

Some foreign companies downsized operations in Hong Kong, but they are not pulling out of the city en masse, said Invest Hong Kong.

As of last June, the number of US firms headquartered in Hong Kong dropped by nearly 10 percent to 254 – the lowest in 18 years, official data. The number of Japanese companies operating in the financial hub also fell by 7 percent to 210.

Stephen Phillips, the Director-General of Investment Promotion at InvestHK – the official body responsible for attracting and facilitating foreign direct investment into Hong Kong – admitted some companies are downsizing. But he said they are not pulling out of Hong Kong altogether.

Phillips dismissed claims that the drop has to do with the national security law, and said it is likely to be caused by economic challenge brought by the Covid-19 pandemic.

Although the epidemic and quarantine policies pose challenges to businesses, they still value opportunities in Hong Kong, he said. Companies also use technological solutions to overcome challenges posed by Covid.

The number of overseas and mainland enterprises' units in Hong Kong rose to a record high at 9,049 last year, while data from the Hong Kong Monetary Authority has not shown any major capital outflow from the city, he added.