Foreign firms not pulling out, but cutting back operations in HK

InvestHK, the city’s foreign direct investment agency, has downplayed claims that foreign firms are pulling out en masse, saying these firms are only cutting back on operations. Stephen Phillips, director-general of investment promotion at InvestHK, said neither does recent government data suggest any significant capital outflows. Earlier reports said the number of US firms that have their regional headquarters in Hong Kong had dropped by nearly 10% as of June 1 last year. The number of Japanese firms also dropped by 7%. Phillips said the drop was likely due to the economic challenges caused by the COVID-19 pandemic and not linked to the imposition of the national security law.