For the First Time in 31 Years, American Companies’ Regional Headquarters in HK Are Fewer Than Chinese Companies

In the last year, regional headquarters for American owned companies in Hong Kong have reduced by 14 to 240, while those for Chinese owned companies has reduced by one to 251

The financial Central district in Hong Kong, China, on July 25, 2019. Tyrone Siu/Reuters

In 2022, among all the foreign companies with regional headquarters in Hong Kong, the number of Chinese companies surpassed that of the American ones for the first time in 31 years.

On Nov. 24, the Census and Statistics Department of the Hong Kong Government published the report “2022 Annual Survey of Companies in Hong Kong with Parent Companies Located Outside Hong Kong.” Using June 1 as the cut-off date for all companies in Hong Kong, with parent companies located outside Hong Kong, there were 1,411 regional headquarters, 2,397 regional offices, and 5,170 local offices. The corresponding numbers in 2021 were 1,457, 2,483, and 5,109. Regional headquarters of foreign companies have reduced by 46 since 2021 and 130 since 2019, a drop of eight percent. There were 1,541 regional headquarters in 2019 in Hong Kong, with parent companies located overseas.

The results show that Chinese companies have the highest number of regional headquarters in Hong Kong, with 251, followed by the United States with 240, and Japan with 212. However, U.S. companies still have the highest number of regional offices in Hong Kong, with 430. This is followed by Japan with 402 and China with 327. Chinese companies have the highest number of local offices, with 1,536, followed by Japan, 774, and the U.S., 588.

According to the report, the top five countries with regional headquarters in Hong Kong are, in descending order, China 251 (17.79 percent), the United States 240 (17 percent), Japan 212 (15 percent), the UK 134 (9.5 percent), and Germany 92 (6.5 percent).

Having “regional headquarters in Hong Kong” refers to an office that has a parent company outside Hong Kong but itself has management rights over various offices and/or operations within the region (Hong Kong and one or more other places).

A “regional office” refers to an office that has a parent company outside Hong Kong and is responsible for coordinating various offices and/or operations within the region (Hong Kong and one or more other sites).

And “local office” refers to an office with a parent company outside Hong Kong that is only responsible for its business within Hong Kong (and not in any other place).

Since the beginning of 2020, the number of overseas companies stationed in Hong Kong began to decline due to the effects of the COVID-19 pandemic and the Hong Kong National Security Law.

The number of employees on the payroll of overseas companies also decreased significantly. As of this year (2022), the total number of employees of Hong Kong-based companies with overseas parents has dropped to 468,000 from 473,000 in 2021. The number of employees has dropped by 25,000 since 2019.

The number of employment visas issued by Hong Kong to overseas workers has fallen by about two-thirds during the pandemic, and strict travel restrictions have cut Hong Kong off from the rest of the world in its role as an international financial centre.

Hong Kong Chief Executive John Lee Ka-chiu admitted during his policy address in Oct. 2022 that the labour force has lost about 140,000 people in the past two years. Among those losses, more than 60 percent are from management or senior management levels. Among them, young people aged 25 to 39 were the hardest hit.

In response to the numbers, independent writer Chu Kot Ming-yeung told The Epoch Times on Nov. 27, “The CCP’s stringent pandemic prevention measures and the enforcement of the Hong Kong National Security Law have turned Hong Kong into just another city in mainland China, completely subordinate to the CCP. Many elites have left for new pastures overseas, and many companies have also transferred their assets and resources elsewhere. Hong Kong’s status as an international financial centre is getting worse and worse.”