Hong Kong’s Rich Are Preparing for a Worst-Case Scenario

One Hong Kong businessman moved $10 million to Singapore and plans to transfer more. Another is eyeing London property, worried that prices in Hong Kong are too high. Well-to-do families across the city are opening offshore bank accounts and applying for alternative passports.

While it doesn’t add up to an exodus just yet, Hong Kong’s rich are increasingly hedging their bets as the financial hub suffers its worst economic and political crises since at least 1997.

Many high-net-worth investors are either reducing their Hong Kong exposure or taking steps to ensure they can withdraw assets at a moment’s notice, underscoring the challenge for Chief Executive Carrie Lam as she tries to maintain the city’s status as magnet for Asian wealth. Rich individuals are major players in Hong Kong’s equity and real-estate markets as well as big buyers of Chinese corporate bonds issued in the city.

Private bankers say their clients accelerated contingency planning efforts after China announced last month it would impose controversial national security laws on Hong Kong. The legislation threatens to erode the former British colony’s judicial independence, provoke sanctions from the U.S. and revive street protests that battered the tourism and retail industries even before the coronavirus outbreak plunged the economy into its deepest recession on record.