The Chinese Communist Party drastically reduced Hong Kong’s autonomy in 2020 with a national security law and has cracked down on resistance ever since. The consequences have left its people culturally and economically poorer, writes Casey Moser.

The encroachment of the Chinese Communist Party in Hong Kong’s political economy has begun to markedly reduce the internationalism of the territory’s culture and environment, depriving the city of the people and businesses that have historically enriched it. I left Hong Kong, where I’d grown up, in 2017. After six years, I finally returned this summer after completing my master’s degree at the University of Chicago. On the face, things remain the same, but beneath the surface it is apparent how the consequences of the CCP’s crackdown on Hong Kong’s autonomy and liberal tradition have rippled throughout the broader culture. 

In daily conversations, there is a nervous feeling that you are always under potential observation from state authorities. Even the mention of “Taiwan” or “communism” results in an awkward silence from interlocutors. This vigilance is not unjustified. In response to the 2019-2020 Hong Kong protests against a bill, ultimately resolved, that facilitates extraditions to Mainland China, the Chinese national government enacted in 2020 a Hong Kong security law granting themselves the authority to monitor and arrest Hong Kong citizens. Since then, nearly 200 Hong Kongers have been arrested for allegedly threatening national security. Despite the fact the protests ended several years ago, the national government continues to track down and arrest participants of the protests. The government has arrested over 10,000 people in connection to the protests, though it has charged fewer than 3,000. Even discussing the protests feels taboo, and one friend felt compelled to whisper the word “protest” rather than say it aloud. Hong Kong Chief Executive John Lee has called for vigilance against “soft resistance” against the government.

Local businesses also continue to suffer from the fallout of the 2019 protests. Many stores closed early due to unrest during the 2019 protests. These early closures were then temporarily codified into policy through the government’s strict Covid rules. However, they still continue unofficially despite the end or easing of other pandemic restrictions. Worse still, the government harasses some local businesses for having supported the protests (these businesses are part of the so-called “yellow economy,” named after the pro-democracy Umbrella Movement that used umbrellas, many of them yellow, to shield protestors from police pepper spray). The clothing store Chickendeeduck, which was famous for supporting the Hong Kong protests, was forced to shut down due to losing its suppliers in Mainland China after the suppliers received warnings not to work with the company.

Local businesses have claimed that the government has increasingly targeted pro-democracy businesses with Covid crackdowns compared to silent competitors. According to the South China Morning Post, the owners of Mee, an app that advertised yellow economy businesses, were “arrested for allegedly conspiring to raise funds from yellow businesses to support “anti-China” activities overseas.” Cha chaan tengs, restaurants that serve a cuisine based on Hong Kong’s adoption of Western cooking techniques, have closed in large numbers due to Covid restrictions and the restaurants’ support for the protests. Lung Mun Cafe, a cha chaan teng known for being pro-protest, was violently vandalized, likely because of the owner’s outspoken political beliefs. Government officials have publicly dissuaded businesses from identifying with the yellow economy, warning them that identifying as a yellow business “will not help your business at all.”

The CCP’s intrusion on Hong Kong’s autonomy and crackdown on contrarian thought has led to a significant brain drain.  According to Hong Kong’s Census and Statistics Department, the territory’s population declined by 1.2% (about 89,000 people) in 2020, when the security law took effect. Much of the decline was due to native Hong Kongers emigrating. Between January 2021 and March 2022, over 100,000 Hong Kongers applied for the British National Overseas (BNO) resettlement visa in Britain. This visa was designed for British nationals in Hong Kong (which includes anyone in Hong Kong who applied for eligibility prior to the handover in 1997) and their children to immigrate to Britain as an escape from the increasingly authoritarian government of Hong Kong.

Hong Kong’s exodus of people is both a cause of and caused by changes in its business environment, which includes in addition to political silencing the increasingly exclusive use of the Chinese language to the detriment of English speakers. Over 75% of Hong Kongers had an average-to-above-average understanding of English in 2016, which helped make the city attractive to international business. However, job ads that might once have included English are now entirely in Chinese. Perhaps as a greater sign of things to come, the attrition rate of native-speaking English teachers in Hong Kong’s primary schools jumped from 11% in 2021 to 18% in 2023, in part due to worsening work conditions, such as “Chinese-only” meetings. Stricter education requirements mandate that teachers promote Chinese patriotism and discourage political dissent. The government encourages students and parents to report teachers who appear to breach Hong Kong’s security law.

The exodus of Hong Kongers has left businesses struggling to hire. According to the South China Morning Post, in 2022, half of Hong Kong businesses reported having a harder time hiring talent than at any point in the last five years, in part because of the decrease in talent pool due to emigration. The primary sectors struggling to hire are corporate sales and business development, which is particularly problematic when considering that Hong Kong’s primary industry is finance. In 2022, Hong Kong reported that 4,000 teachers had quit their jobs, corresponding to a 70% spike in teacher attrition compared to the year before. It was a five year high for the city. Many teachers report leaving or considering leaving the territory altogether.

Hong Kong is one of the main entrepots for East Asia and it has relied on international trade for its prosperity. According to the Council on Foreign Relations, in 2021 the number of American companies that had regional bases in Hong Kong dropped to its lowest level in 18 years. Furthermore, the CFR reports that “nearly half of European firms are considering fully or partially moving out of the city by 2023,” based on data from the European Chamber of Commerce. The severity and longevity of Covid restrictions are certainly one cause of this souring business climate, but so is the CCP’s clampdown on Hong Kong autonomy.

According to the American Chamber of Commerce, “over 8 in 10 [member] businesses have been impacted by Hong Kong’s National Security Law.” These effects have come in the form of emigration of Hong Kongers (45% of companies reported having lost workers due to emigration from the National Security Laws) and from the overall drop in workforce wellbeing due to Hong Kong’s increasingly authoritarian government. The American Chamber of Commerce reports that 47% of its member companies have reported decreases in staff morale due to the National Security Law. The transition of Hong Kong from an autonomous, international city to an extension of Mainland China will be disastrous to Hong Kong’s future as a trading hub if companies join Hong Kongers in leaving. Already, the IMF predicts that Hong Kong’s real GDP growth will steadily decline from 4.4% in 2023 to 2.4% in 2028. It notes that political fragmentation and a reduction in Hong Kong’s openness is one of the more critical risks the territory faces in the medium to long term.

When the United Kingdom handed Hong Kong over to the Chinese in 1997, economists were concerned that the CCP would abandon promises to respect Hong Kong’s liberal freedoms.  As political scientist Alvin Rabushka speculated prior to the handover, “if the autocratic, but benevolent, colonial structure remains intact until 1997, China will inherit a mechanism whose virtually unconstrained authoritarian legal powers are no longer moderated by British traditions of individual rights and gaining the consent of the governed.” Unfortunately, these concerns have been proven right. Hong Kong is not yet a totalitarian society, but the continued erosion of Hong Kong’s freedoms are already leaving its people economically, politically, and culturally worse off.

Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.