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More than 40% of members surveyed by the American Chamber of Commerce in Hong Kong said they might leave the city, highlighting the business community’s concerns over a China-imposed national security law and the local government’s handling of Covid-19 outbreaks.

Singapore figured among the most popular potential destinations, while some mentioned Tokyo, Taipei and Thailand as alternatives, the lobby group said in a report released on Wednesday. Conducted between May 5 and 9, the survey received responses from 325 members, accounting for 24% of the total.

“We believe many businesses will have strong opportunities to thrive in the future,” President Tara Joseph said in a statement. “Right now though, it’s easy to worry about a brain drain of top talent and skills in a gateway city that is fueled by trade, international capital flows and global connectivity.”

Since Beijing passed the sweeping national security legislation last year to strengthen control over the semiautonomous territory, the local government in Hong Kong has disqualified lawmakers, delayed a local election and jailed dozens of pro-democracy politicians and activists. While the moves effectively ended all protests that rocked the city two years ago, they have also prompted concerns about whether the former British colony can continue as an open, liberal city and retain its independent judiciary — attributes that have helped Asia’s financial hub to thrive.

The law uses vague language to ban subversion, secession, terrorism and collusion with foreign forces, with sentences as long as life in prison. It also gives police broad surveillance powers that are spooking individuals and businesses alike.

The new security law topped the list of concerns of those looking to exit, AmCham said, with 62% queried in the survey citing discomfort with the law as a reason to depart.

One respondent cited “the rise of illiberal values as Hong Kong becomes more closely integrated into China,” while another said the national security law “is destroying Hong Kong’s international appeal.”

A Hong Kong government spokesman cited the “violent protests and anarchy” that prompted the security law as one reason that people might want to leave the city, even though that wasn’t among the answers reported by AmCham. The government was committed to promoting economic development, fostering local talent and attracting foreign workers, he said.

“The implementation of the National Security Law has reverted the chaotic situation and serious violence and restored stability and increased the confidence in Hong Kong, thereby allowing the city to resume its normal operation and return to the path of development,” the spokesman said.

Many participating in the survey also worry about the law’s impact on Hong Kong’s schools, with 36% of those considering a move saying they’re concerned about the impact of the security law on education.

On April 15, schools across the city marked the first National Security Education Day as part of the government’s efforts to overhaul the education system and instill patriotism following the anti-Beijing demonstrations of 2019. Institutions were mandated to hold events including singing the Chinese national anthem and raising flags.

Though international schools, the first choice of expats, seemed exempt from participating in the April 15 event, many in the survey worried that the government would eventually gain control of the curriculum at these elite institutes where tuition can cost upwards of $20,000 a year.

In addition, 49% of respondents said Hong Kong Chief Executive Carrie Lam’s quarantine policies have made travel difficult, prompting them to consider leaving.

Hong Kong has some of the world’s most draconian COVID-19 quarantine rules, including 21-day hotel stays for most people entering from abroad and detainment in government-run centers for residents of apartment buildings with confirmed cases of variant strains of the coronavirus.

One respondent said the tolerance toward non-ethnic Chinese and Caucasians in particular – once a hallmark of post-colonial Hong Kong — is waning.

“Based on the survey results, AmCham strongly suggests that the government pay close heed to the sentiment of expatriates in Hong Kong and work towards allaying major concerns through stronger understanding of Hong Kong’s international talent, lest the city lose competitiveness versus other business hubs,” AmCham said.

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