A view of the Hong Kong CBD in February 2018 Photo: IC

Foreign companies have felt a chill amid social turbulence in Hong Kong, as the city hosts the regional headquarters of thousands of international companies in a wide range of industries. Some foreign businesses have warned that the riots are tarnishing the city's business reputation and their investment confidence.

Hong Kong, as international financial hub, hosts the regional headquarters of more than 3,700 international companies in a wide range of industries from international trade and retail to education and finance. 

For instance, about 1,300 US companies have operations in the city, including some of the biggest businesses and financial giants such as Amazon, Apple, Cisco and JP Morgan. US exports of goods and services to Hong Kong provide around 188,000 jobs in the US, whose direct investment in the city reached $81.2 billion in 2017. 

Hong Kong's direct investment in the US reached $11 billion, mostly in trade, manufacturing and real estate, according to statistics from the US Department of Commerce. 

Likewise, the UK and Canada also have heavily invested in the city. Hong Kong is the second-biggest commodity market in the Asian Pacific region. Around 120 UK companies have headquarters in Hong Kong, which is also home to more than 300,000 people from Canada. 

The impact of anti-government protests, which have turned into riots, has become more apparent in the Hong Kong capital market. Combined with pressure from the trade war, the violence has been dragging down Hong Kong's stock market. On Monday, the Hang Seng Index fell 1.91 percent to 25,680.33 points.

Besides, the city's exports in July slumped 5.7 percent year-on-year, dropping for the ninth consecutive month, media reported on Monday. 

Some foreign business representatives have warned that the street violence is now seriously tarnishing Hong Kong's business reputation, as its success has been mainly built on a stable environment. 

A French executive in a high-technology company told the Global Times from a recent interview that the anti-government protests are a "silly event," and there is an American scam behind them. 

"I feel sorry for Hong Kong not seizing the Greater Bay Area [Guangdong-Hong Kong Greater] opportunity, and they are screwing themselves," he said. 

The French businessman asked to remain anonymous as foreigners who do not stand with anti-government groups in Hong Kong are usually verbally attacked by pro-West activists. The social unrest will, for sure, affect business confidence, and he said he is now considering keeping his investment in Hong Kong small but increasing business footprints in Shenzhen.

As the street violence has continued to spread, the city will be sidelined in the Greater Bay Area development, the French businessman noted. 

The performance of Hong Kong's economy has been satisfactory since 1997, and many obstacles including trade friction between China and the US, and the previous financial crises, have all been surmounted. However, the riots are suicidal attempts that are damaging Hong Kong's position and credit internationally, some business representatives said. 

"The future is China," a Singapore-based businessman who has investment in Hong Kong told the Global Times. 

There appear to be the same mechanics as the Rose Revolution in Georgia and Orange Revolution in Ukraine, with external forces meddling in and leading those places into chaos, he said.

Thanks to the city's excellent business environment, tax policy and infrastructure, Hong Kong has always been especially appealing to international trade businesses, especially those with an eye to enter the Chinese mainland market. 

However, the biggest concern for the business world now is the damage to investors' confidence in Hong Kong following the riots, which are seriously sabotaging stability and normality.


Newspaper headline: HK unrest weighs on foreign firms