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Biden to warn US companies of risks in operating in HK

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  1. #1

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    Biden to warn US companies of risks in operating in HK

    According to a Reuters report, Biden will issue a warning to US companies in HK of the risks they are subjected to while operating in this city:

    https://www.reuters.com/business/bid...ft-2021-07-13/

    Biden plans to mention the risk of Chinese counter-sanctions over Xinjiang, according to the above report.

    So how serious should one take this report? How much of an impact will it have? If anyone here is employed by a US firm in HK, should we be worried? Or is this nothing more than a storm in a tea cup? And expats like us should not get unduly ruffled by this?


  2. #2

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    I think the HK warning will lead to increased red tape and possibly some activities that use sensitive data moving abroad.

    The Xinjiang sanctions will ensure US companies are very sure of the source of their goods made in China, and the materials used to make them. Not a bad thing.


  3. #3

    Warning to companies for not taking sanctions seriously enough - quoting from FT:

    “The point of the advisory is to stress [that] if you do not exit these supply chains you run a risk of violating US law,” said an official who did not want to be named. “We want to make clear to the business community . . . that they need to be aware of reputational, economic and legal risk of their involvement with entities involved in human rights abuses.”

    For Hong Kongers in US:

    The White House is also considering a policy that would allow Hong Kong citizens in the US to remain after their visas expire if they face potential political persecution in Hong Kong. But that policy is being debated and is not expected to be part of the package of actions to be announced this week.
    https://www.ft.com/content/8ca8fbfb-...c-f2fd624da608
    shri likes this.

  4. #4

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    Quote Originally Posted by Coolboy:
    So how serious should one take this report? How much of an impact will it have? If anyone here is employed by a US firm in HK, should we be worried? Or is this nothing more than a storm in a tea cup? And expats like us should not get unduly ruffled by this?
    To answer your question, I'd start by identifying criteria for which we shouldn't take this seriously. I suppose if there was the belief of some golden pot at the end of some rainbow in Wan Chai, but last time I checked during the double rainbow event, there wasn't one.

    I do have an anecdote for you: a large major tech company transferred roles out of HK because they had access to sensitive data. those who didn't move needed to resign. Data security is a sensitive matter for any country.

    But things often start with a few anecdotes here and there and end up snowballing. Like the UK exodus which is very real.
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  5. #5

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    Quote Originally Posted by seirin:

    But things often start with a few anecdotes here and there and end up snowballing. Like the UK exodus which is very real.
    If you are the head of a US firm in HK, at what point will you say: "No, this is too much. It's not worth it to stay in HK anymore". So far no major foreign firm, US or otherwise, have really openly stated they are leaving of course. So the good news is that we haven't reach that point where firms are really getting up to go enmass (there is a considerable cost involved to relocate a regional headquarters in Asia obviously, so firms won't make that decision lightly). And I imagine it also depends on what sector or industry the firm is in. But where is that redline(s), if there is one?
    Last edited by Coolboy; 14-07-2021 at 06:45 PM.

  6. #6

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    Quote Originally Posted by Coolboy:
    If you are the head of a US firm in HK, at what point will you say: "No, this is too much. It's not worth it to stay in HK anymore". So far no major foreign firm, US or otherwise, have really openly stated they are leaving of course. So the good news is that we haven't reach that point where firms are really getting up to go enmass (there is a considerable cost involved to relocate a regional headquarters in Asia obviously, so firms won't make that decision lightly). And I imagine it also depends on what sector or industry the firm is in. But where is that redline(s), if there is one?
    Moving to another country / region is time consuming and a company won't announce it before they have committed resources into executing the move. The process is usually to first move the core operations out then let attrition deal with the rest. I know a few companies doing this.
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  7. #7

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    Quote Originally Posted by aw451:
    a company won't announce it before they have committed resources into executing the move. .
    Companies won’t announce it until it’s COMPLETE
    aw451, MatthieuTofu, shri and 3 others like this.

  8. #8

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    Quote Originally Posted by aw451:
    Moving to another country / region is time consuming and a company won't announce it before they have committed resources into executing the move. The process is usually to first move the core operations out then let attrition deal with the rest. I know a few companies doing this.
    Well...it will be pretty clear if companies are moving out of HK. You can't really hide that. Their action will annouce their intentions.

  9. #9

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    It's going to be like a lot of Brexit cases - they're not going to announce anything, they may not even take a formal decision, but when they're considering where to hire, where to expand, where to replace employees, Hong Kong will slip down the rankings over time...

    aw451 and MatthieuTofu like this.

  10. #10

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    Seems like Biden’s announcement is spot on. The SCMP already got the instruction to publish a countering article today about some American entrepreneurs saying it’s no good


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