While Hong Kong’s political opposition is being suppressed, freedom of speech is being stifled and the democratic environment is deteriorating, mainland Chinese companies are quietly expanding in the city of more than 7 million people. According to Bloomberg, several Chinese companies are renting buildings, buying land and acquiring media in Hong Kong. Thirty percent of the top office buildings in Hong Kong’s Central district are now occupied by Chinese companies, a percentage that was less than 5 percent in 2008.
Chinese billionaire families eyeing Hong Kong
Bloomberg reported on April 9 that Chinese real estate family Jia Zhaoye Group, which originated in Shenzhen, is becoming one of the most active Chinese companies in Hong Kong through property investments and media acquisitions.
According to Jia Zhaoye Group’s Hong Kong Stock Exchange filings, the company purchased four large blocks of property in Hong Kong last year for 7.1 billion yuan, and also confirmed a 50 percent stake (or 3.2 billion yuan worth) in Hong Kong’s Kai Tak Residential Land in March this year.
Hong Kong media reports said that after Jia Zhaoye’s shareholding, the investors of the Kai Tak site became an “all-Chinese portfolio”, in which in addition to Jia Zhaoye Group, there are also Chinese property group Yan You Limited and Sinolink Group.
The Group’s ambition to expand in Hong Kong does not stop there, as Guo Xiaoting, the 27-year-old daughter of Group President Guo Yingcheng, bought Hong Kong’s oldest media, Sing Tao Daily, for about HK$370 million in February this year. Responding to the Bloomberg report, Goodwill said the company sees Hong Kong as one of the core cities in the Greater Bay Area and its market potential is huge, while the Goodwill Group is also confident in the long-term prospects of Hong Kong and will continue to actively explore investment and business opportunities in the city.
Founded in Shenzhen in 1999, Jia Zhaoye had made a name for itself by renovating bad projects. in 2020, Jia Zhaoye ranked in the top 20 in contract sales in mainland China.
However, Bloomberg reports that Glorious has had a checkered past. in late 2014, Glorious was embroiled in an investigation over its alleged involvement with Jiang Zunyu, the former secretary of Shenzhen’s political and legal committee, who was later convicted of bribery, leading to a suspension of Glorious’ Shenzhen project sales and new project approvals at the time.
Foreign investors consider downsizing Chinese companies’ business expansion in Hong Kong
In addition to Jia Zhaoye, several Chinese property developers such as Evergrande Group and Vanke Corp. are also showing ambitions in Hong Kong, such as Evergrande’s purchase of a nearly 800,000-square-foot residential site in Tuen Mun District from Hong Kong’s Henderson Land for HK$6.6 billion in 2018 to build Hong Kong’s largest luxury homes, the report said.
In addition, according to Savills data, Chinese companies are now renting up to 30% of the office space in Hong Kong’s top commercial offices in Central, compared to less than 5% in 2008, showing that Chinese businesses are expanding.
As Hong Kong’s free environment deteriorates, the global banking industry is scaling back office space in Hong Kong’s expensive business districts, and many residents are considering emigration, the report said. The influx of money from mainland China has boosted Hong Kong’s real estate market amid fears of capital outflows from the city.
The report quoted French foreign trade bank (Natixis) economist Wu Zhuo Yin (Gary Ng), who pointed out that the Chinese government welcomes more Chinese companies to expand in Hong Kong to improve local business confidence and create jobs, Chinese companies will also recruit more people in Hong Kong to help the Chinese government stabilize the negative impact of the current situation.
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