A year after Beijing imposed its national security law on Hong Kong, many residents are leaving the city or are contemplating departing. Since 2020, close to 90,000 people, or 1.2% of the population, have gone. Scenes of hundreds of people tearfully sending off their loved ones have become common at the city’s international airport. Most of those leaving are not expected to return.

The concerns of those wanting to leave are not unfounded. A new law passed in August last year without scrutiny or public consultation has given the head of immigration ^[1] the power to stop anyone leaving the city without needing to seek a court order. The Hong Kong Bar Association raised concern about the ‘apparently unfettered power’ this new law gives to the government. The association has since been silent on political issues after being targeted ^[2] by pro-Beijing politicians.

The exit-ban law fits the pattern of how China targets dissent and unwelcome business figures. It could render meaningless the efforts of any country offering Hongkongers immigration opportunities as anyone can be barred from leaving. That’s not just active dissenters, but also journalists and businesspeople.

Not too long ago, Hong Kong’s financial sector felt relief ^[3] as an anti-sanctions law decreed by Beijing’s National People’s Congress was shelved at the last minute. Observers believe ^[4] the sudden about-face was to salvage foreign investors’ confidence in Hong Kong and China after recent crackdowns on the Chinese tech and educational sectors.

This law, if implemented, would extend China’s tough anti-sanctions regulations to Hong Kong, barring companies from enacting US sanctions on Chinese entities. It would essentially upend the city’s status since it would then be impossible for it to stay in the US-led international economic system.

Nonetheless, financial regulatory changes are making departure from Hong Kong more challenging. Regulators have issued ^[5] a statement restricting residents who hold British national (overseas), or BNO, passports from extracting their retirement funds after soaring early withdrawals by leavers. Their funds could be locked within the city until they reach the legal retirement age or receive citizenship in their host country.

Despite obstacles, the emigration wave continues. But the possibility of being barred from leaving is always around for some. Authorities have prevented members of the University of Hong Kong’s student union from leaving ^[6] and then arrested them for incitement after they staged a commemoration for a man who stabbed a policeman before killing himself. Police also temporarily seized the passport of a reporter who covered the episode.

At least for now, Beijing and Hong Kong have not placed a blanket ban on movements into or out of the city even though Australia, the US, Canada and Britain have pledged to provide a haven for those who wish to exit. Immigration schemes targeting young professionals are becoming increasingly popular measures for countries like these.

Tensions between China and the US could always worsen but, for Hong Kong, total isolation from the rest of the world is unlikely at this stage. Beijing’s ‘greater bay area’ vision, a multi-city development spanning across the border from Hong Kong to several cities in Guangdong province, has become a focal point ^[7] of China’s plan to integrate Hong Kong and Macau—two former Western colonies—with the mainland. Beijing’s vision, if fully realised ^[8], would ‘facilitate in-depth integration’ and transform these cities into an ‘international first-class bay area ideal for living, working and travelling’.

Hong Kong’s longstanding position as Asia’s financial hub is intended to link ^[8] China with global investors under its promise of ‘one country, two systems’. The Hong Kong’s government’s policy push ^[9] suggests the city will be further integrated with China but its global connections will play a strategic role. Keeping the city under its control, but with its access to the world intact, allows Beijing to exploit the financial hub to fulfil its economic goals. Despite, or perhaps because of, geopolitical tensions with other countries, a window for foreign investment is essential for China.

However, it remains to be seen how the world will respond to Beijing’s tightening controls over Hong Kong. The city’s harsh Covid-19 border measures are already chipping away at its attractiveness. Chief Executive Carrie Lam has cancelled ^[10] most exemptions from the city’s mandatory and self-funded quarantine periods despite the city’s global business community lobbying for an easing of restrictions.

The tighter restrictions bring Hong Kong closer to China’s zero-Covid policy while most of the world is opening back up. The city is retreating into isolation as many expatriates and travellers, like those fleeing the national security law, have decided to depart.

New laws and financial regulations have not so far closed Hong Kong’s doors but, despite the grand greater bay area plan, its ongoing status as a global financial centre may be in question. Foreign companies have begun to relocate to other financial hubs like Singapore which are more business-friendly and where it’s easier for companies to attract talent and make long-term decisions.

Despite the drain, Lam has made opening the border with China her main priority, saying: ‘Of course, international travel is important, international business is important to us. But by comparison, the mainland is more important.’