not a good time to move to Asia

often I get asked on WSO how I would advise someone try to make the move to Asia/HK/China. Simply put, at this time, I'd not recommend it.
* China growth has slowed dramatically - first from less-than-commercial government policies, and an unnatural amount of debt, and then from a trade war
* HK's own position in the world has been made partially redundant. Since 1841 the role of HK was to serve as the gateway into China - something that was exacerbated after 1949. .But now? If one wants to do business in China, one can just take a flight to Beijing or Shanghai. HK's role is now less necessary, and the city has not diversified its economy. It still is just focused on finance.
* HK is in a recession due to protests and a slowing China, and it's going to get much worse before it gets better. A year ago HK averaged 200k visitors per day. During the protests, tourism fell by more than half. Now, nearly 0 tourists (due to corona virus). Even if tourism recovers, there is a stain on HK that will take time to wash out.

And if you're a foreigner (even a Chinese one) just forget it. Why go thru the pain?

Comments (23)

Feb 19, 2020 - 8:38am
thebrofessor, what's your opinion? Comment below:

where are you based? mainland china? singapore? HK? would love to see you do a AMA.

my main question is where do we get reliable information on china and the periphery? I've heard SCMP is good, and I know you can't trust state run media, but I worry about how legit some of the twitter people are as well. I realize that if the numbers are off, there's no reliable data sources, just some additional non-state media would be helpful.

another question is on china slowing. is it actually a decline like a recession? or, is it just growth in the 2-4% range instead of 5%+? where is the slowdown hitting them hardest?

thanks man!

Most Helpful
Feb 19, 2020 - 2:53pm
earthwalker7, what's your opinion? Comment below:

I'm in Hong Kong. My FT job ended due to the economic slowdown due to the protests 6 months ago. It was part of layoffs across the company, and I was assured it was not performance related, but rather an effort by the company to get thru the nuclear winter, and I was one of the more high-paid people. My company was uniquely exposed to the drop in tourism traffic which fell from 200k per day to 3k per day. But the thing is, I didn't feel like I was maxing out my potential in Asia anyway. Not for years. So maybe this is the chance to move back to USA that I had been waiting. I couldn't justify it when I was employed but now....

It's really hard to know what data is reliable in China. SCMP is usually ok, as it is theoretically not state owned, but it is owned by a wealthy Chinese person, and hence may be subject to pressures. Other than that, there's some international agencies that seek to provide some data, but it's highly imperfect.

I can't tell how much China is slowing. It's significant, but we don't know the real details. I can't tell if growth rate is 5% or 2%. And it's not even mostly due to trade war. China was slowing for quite some time. The trade war however doesn't help things.

I am in HK however, which has been pushed by the protests into a bona fide recession. Maybe things will get better in a few months. Who knows. The protests are a funny thing because they are an artificially created, black swan event that has led to economic downturn. I empathize with the protesters' calls for greater say in their government. Sovereignty tho? That's crazy talk. US wouldn't allow NYC to secede if it so demanded. Overall I think most HK people sympathize with the protesters' demands but not the way in which they are seeking to achieve them (bombing subway stations and hospitals and beating up mainland Chinese people).

Feb 19, 2020 - 3:01pm
BobTheBaker, what's your opinion? Comment below:

Isn't Hong Kong a largely sovereign entity to begin with (they have a separate passport and everything)? Quite different from U.S. vs. NYC....

Array

Feb 19, 2020 - 3:18pm
Jamoldo, what's your opinion? Comment below:
earthwalker7:
I'm in Hong Kong. My FT job ended due to the economic slowdown due to the protests 6 months ago. It was part of layoffs across the company, and I was assured it was not performance related, but rather an effort by the company to get thru the nuclear winter, and I was one of the more high-paid people. My company was uniquely exposed to the drop in tourism traffic which fell from 200k per day to 3k per day. **But the thing is, I didn't feel like I was maxing out my potential in Asia anyway. Not for years. **So maybe this is the chance to move back to USA that I had been waiting. I couldn't justify it when I was employed but now....

It's really hard to know what data is reliable in China. SCMP is usually ok, as it is theoretically not state owned, but it is owned by a wealthy Chinese person, and hence may be subject to pressures. Other than that, there's some international agencies that seek to provide some data, but it's highly imperfect.

I can't tell how much China is slowing. It's significant, but we don't know the real details. I can't tell if growth rate is 5% or 2%. And it's not even mostly due to trade war. China was slowing for quite some time. The trade war however doesn't help things.

I am in HK however, which has been pushed by the protests into a bona fide recession. Maybe things will get better in a few months. Who knows. The protests are a funny thing because they are an artificially created, black swan event that has led to economic downturn. I empathize with the protesters' calls for greater say in their government. Sovereignty tho? That's crazy talk. US wouldn't allow NYC to secede if it so demanded. Overall I think most HK people sympathize with the protesters' demands but not the way in which they are seeking to achieve them (bombing subway stations and hospitals and beating up mainland Chinese people).

My response to the bolder and echoing the OP....As a fellow professional with long Asia experience this is exactly what I tell everyone that has asked me about going to Asia.

It's less technically demanding and far more network driven (Ie. Who you know).

The big leagues are in the US if one cares about that (and frankly there is a lot more to life than work). But generally speaking the best and most challenging work and corresponding people (Ie. Talent) is NOT in Asia. Lots of folks spinning wheels there (once again there is more to life than work)...

I used to do Asia-Pacific PE (kind of like FoF). Now I do something else but happy to try and answer questions on that stuff.
  • 5
Apr 23, 2020 - 8:46pm
iridescent007, what's your opinion? Comment below:

South China Morning Post mimicks the name of a very famous Chinese Newspaper, Southern China Weekly Report / Nan Fang Zhou Bao in Chinese. It is not the most reliable source for information regarding China. As someone who has been in the US for 8 years, I have yet found a very reliable Western source or an English media in general that covers China very well. FT is okay. The Economist likes to trash talk on China. Won't rely on SCMP.

Persistency is Key
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Feb 19, 2020 - 10:23am
I quit this site because of censorship, what's your opinion? Comment below:

Yeah, my co-worker went to Singapore for 2 weeks and then was told she couldn't come back into the office for 2 weeks to ensure she had no symptoms of the virus. A complete headache for everyone.

Array

Feb 21, 2020 - 5:06am
neink, what's your opinion? Comment below:
earthwalker7:
fun graph of the day. HK tourism down from 200k visitors/day to now less than 3k/day. Rekt. Savage. Absolutely taken down

Taleb: day of the Turkey.

CLASSIC

Never discuss with idiots, first they drag you at their level, then they beat you with experience.

Feb 21, 2020 - 7:37am
setarcos, what's your opinion? Comment below:

I mean if you're trading asia at the moment you'd be pretty happy.

Commodity guys moving a tonne on basis plays, hedgies playing china bonds etc.

Just gotta know where the opportunity lies.

In terms of traditional deals - largely agree, the fading is kicking in, with the Virus accelerating this (see HNA takeover).

  • Analyst 1 in IB-M&A
Apr 23, 2020 - 5:46pm

earthwalker7 Understand the context of your viewpoints but would respectfully disagree on your conclusions.

1) On China - Yes GDP growth is slowing down but China is only increasingly important on a global stage in terms of everything else. In emerging markets, governments aren't looking to the West for financing but to China, entrepreneurs aren't trying to build domestic versions of Uber or Google but domestic superapps like Alibaba and Tencent, etc. If you want to understand the world you have to understand China; that is more than a good enough reason to experience working in China.

2) On HK - Agree that the best for HK has passed but there's still quite some time away from the city being redundant. HK is not a physical gateway to China and hasnt been for a while. People have been able to fly directly to BJ/SH for a long time so not sure what your point is on that. More importantly, HK is an economic gateway to China. 60% of FDI into China flows through HK and unless China is going to change its economic and legal structures to resemble that of the west (low likelihood), HK will continue to be important. The reality is the Chinese economy needs HK and the CCP must hate that but know it's a fact. If China could make HK redundant that easily, it would be by now. Yet the unpatriotic, whitewashed city of HK (in the lens of mainlanders) is still standing and important globally.

3) On Asia - Asia is so much more than just China and HK. Just look at SEA, which is the most attractive growth story in the world right now and relatively foreigner friendly.

I see why Asia isn't attractive to you in this moment but I think that is unique to your circumstance. To everyone else, there are an abundant of reasons to move to Asia and there is never a bad time to take that leap.

Dec 10, 2020 - 5:51pm
McChicken, what's your opinion? Comment below:

I think China will grow around 5% for the next 7 to 10 years or so; you can't expect a big economy like China to constantly grow at 8%, 9%, etc. And for HK, it might not be the right time to move there right now during the recession, but over the long-term, I am quite optimistic because I believe things will get sorted out. Like it or not, HK will probably become more and more like mainland China.

But in general, I agree that it is very difficult for non-natives to move to East Asia or SEA in general because of the language and cultural differences. You'll just have an entirely different experience if you are fluent in the native languages. 

  • Associate 1 in CorpFin
Jan 12, 2021 - 12:51pm

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