Business

Employees of Guangdong companies can apply for quarantine-free business permits to visit Hong Kong starting today.  The online booking system has a daily quota of 1,000 for entry via the Shenzhen Bay Port or the Hong Kong-Zhuhai-Macao Bridge Hong Kong Port.  This is on top of the existing scheme that allows non-Hong Kong residents from Guangdong province to enter the city without quarantine, which has been in effect since Sept. 15.  Macau was removed from exemption on Sept. 25 because of its latest Covid-19 outbreak. Business owners welcome the new travel scheme. “Because of Covid and the quarantine policies, we were unable to meet friends and families, and I could not meet my business partners in Hong Kong,” said Feng Minliang, who owns a fashion exhibition-organising company in Zhongshan in Guangdong. “I think the new policy is very useful,” said Feng. “Although it is only a temporary solution, it is definitely a good start to help the economy recover from Covid.” Meanwhile, foreign businesses have expressed frustration with the city’s “zero-Covid” strategy. The American Chamber of Commerce said their efforts in lobbying the Hong Kong government to reopen its borders with the rest of the world has been fruitless, as reported by Bloomberg. “We’re at the point where it just feels like we’re talking to a wall,” Tara Joseph, president of AmCham in Hong Kong, told Bloomberg. “The longer the closing of borders goes on, the more vulnerable many businesses are,” said Brian King, the Associate Dean and Professor of the School of Hotel and Tourism Management at Hong Kong Polytechnic University. “There will be job losses.” The number of headquarters and offices of mainland Chinese companies in Hong Kong increased by 22% to 1986 between 2019 and 2020, according to latest statistics from the Census and Statistics Department. Meanwhile, …

Chief Executive Carrie Lam Cheng Yuet-ngor announced a massive development plan, including  housing, commercial property, transportation infrastructure and technology companies, on the border with the mainland in her last policy address today. The Northern Metropolis Development Strategy will add around 600 hectares of land to the Northern District and Yuen Long District for housing and commercial use, including 165,000 to 186,000 additional housing units, she said, bringing the total number of units to 926,000 for around 2.5 million people.  “It is the most vibrant area in Hong Kong, where urban development and major population growth will occur over the next 20 years,” Lam said. The area is also expected to generate about 650,000 jobs, of which 150,000 will be IT related.  Some of the land to be developed is brownfield, undeveloped  land mainly used as open storage yards, warehouses and other industrial or rural workshops. The land-use efficiency of these brownfield operation sites is generally low.  Li Che Lan, professor in public policy at City University Hong Kong said land is one of the most pressing issues in Hong Kong. She said the development of the New Territories will alleviate the problems of high housing prices and a housing shortage in Hong Kong. Mee Kam Ng, Director of the Urban Studies Programme at Chinese University of Hong Kong, said that the development of New Territories Area can considerably increase land supply. Li said the government should emphasize environmental protection during the development. However, Ng said the development plan is more realistic and environmentally friendly, compared to Lantau Tomorrow Vision, which will be built on reclaimed land. “The New Territories is the largest area in Hong Kong with the most ample development space, which has rich cultural heritage and historic sites,” she said, expecting that the area can turn into a …

Hong Kong companies reported increased cyberattacks over the last year, including ransomware attacks, as more employees work from home, said US security service provider Barracuda at a press conference in Hong Kong today. In Hong Kong, 76% of companies saw at least one cyberattack compared to 81% globally, according to a survey of 750 companies around the world conducted by UK market researcher Vanson Bourne and commissioned by Barracuda. A total of 66% Hong Kong companies interviewed reported ransomware attacks last year, and those with remote staff were more likely to be attacked.   Remote work may contribute to an increased risk of network security breaches and being attacked, Conrad Lee, senior sales engineer of Barracuda, said at the press conference. He also said that phishing has become more specific as hackers take advantage of wide-spread discussion of social issues on the web. “For example, attackers can make use of the discussion of COVID-19 on the internet to send phishing emails to several accounts or induce people to download apps,” he said, adding that the improvement of attack software could also be a factor. Hong Kong is a “relatively safe city” in network security but remote work and the use of web-based applications, such as Google Docs and Zoom, is a concern, Mr. Lee said. All Hong Kong enterprises in the survey reported concerns regarding security risks caused by the use of web applications, and 98% worried about problems of data leakage and ransomware gaining access through unmanaged devices. In another survey, 42% of Hong Kong companies reported ransomware attacks over the last 12 months, an increase of 1%, according to research by the Hong Kong Productivity Council in August and commissioned by Hong Kong Telecom. “The remote work will probably become the new trend and continue even though the …

Hong Kong British National (Overseas) (BNO) passport holders moving to Britain tend to sell their properties in the city to avoid related taxes charged by the UK government on overseas properties and that may trigger a capital outflow of up to HK$280 billion from Hong Kong, based on banks and media estimation. BNO migrants will be subject to the UK's global tax system, under which their rental income from Hong Kong will be taxed and if they want to buy a residential property in Britain without selling their Hong Kong residence they have to pay an extra 3% of stamp duty. Therefore, Hong Kong residents emigrating to the UK are pondering what to do with their Hong Kong flats. Chan Siu-yi, 36, who moved to the UK several months ago with a BNO visa, has decided to sell her property in Hong Kong to avoid extra taxes. “The global taxation policy might charge us about €2000 (HK$18,717) every tax season if we don’t sell our property in Hong Kong after moving to the UK within 9 months,” she added. The British government launched a new policy after China passed a national security law last year, to allow Hong Kong BNO holders to live and work in the UK for up to five years and eventually seek citizenship. The policy is expected to spark a new wave of immigration. The British Home Office said in January that the number of immigrants via HK BNO visas is expected to reach between 258,000 and 322,400 over five years. Based on the estimation of Bloomberg Intelligence Research, up to 16,300 Hong Kong households may move to Britain via BNO visas this year and a maximum of HK$150 billion worth of properties from these families could be on sale in 2021 alone. A Bank of …

Erica Lam, a 30-year-old broker eager to buy new shares of technology companies for profit, saw the Hong Kong secondary listing of online entertainment company Bilibili Inc. (9626) a great opportunity and bought 3,000 of its new shares.  However, the stock price of Bilibili fell as much as 6.8% on the first day of trading, translating into a loss of HK$165,000 for Ms Lam. Before Bilibili, search giant Baidu also briefly fell 0.2% below its Hong Kong IPO price and ended the first day of trading unchanged. "The listings of Baidu and Bilibili came amid a cooling market when Asian investors showed less enthusiasm for IPOs and worried about the increasingly high valuation of technology stocks in recent years," said Wang Hui, a portfolio manager at Haitong Securities. "On top of that, the rise in U.S. bond yields has also caused many investors to sell tech stocks." Higher interest rates are particularly damaging to high-growth tech companies as investors value them based on expected earnings over the next few years, she said. The Hang Seng Tech Index of top technology companies has dropped 22.3% from its Feb.17 high to 8500.13.  Also, China set its 2021 GDP growth target at above 6%, lower than the market’s expectation of  8% growth, which made investors worry about a tightening in monetary and fiscal policies. "Such a conservative GDP forecast would undermine investor confidence," said Ms Wang.   Booming home-coming trend under increasing Sino-US tensions Bilibili, like many Nasdaq-traded Chinese companies, jumped on the homecoming bandwagon by listing their stocks in Hong Kong with tech heavyweight Alibaba taking the lead in late 2019 due to growing Sino-US tensions. The two countries have played tit-for-tat with increased tariffs, imposed sanctions and targeted regulations. To hedge against rising risks, more mainland tech companies chose to seek secondary …