Hong Kong's financial Berlin Wall
Pensions and punishing dissent
By Chloe Lo
Are you a Hong Konger who wants to rely on your hard-earned lifelong retirement savings to help with your relocation overseas? Think again! In the new Hong Kong, the authorities refuse to recognise the UK government-issued British National (Overseas) (BNO) passport, which has prevented an estimated 126,500 BNOs from accessing £3 billion worth of their Mandatory Provident Fund (MPF) retirement savings.
The MPF is a mandatory government retirement savings scheme in Hong Kong, in which a monthly contribution of up to HK$1,500 (£150) is required. Usually, when a Hong Konger completes a form declaring that they have permanently departed from the city, they are entitled to withdraw their MPF savings in full. However, the Hong Kong government is blocking citizens fleeing political repression from accessing their savings, both those with a BNO passport and those who are “under investigation” by the Hong Kong authorities for participating in peaceful pro-democracy activities.
A person who has worked for two decades in Hong Kong can expect to accumulate at least HK$360,000 (£36,000). Having worked in Hong Kong for two decades, I have accumulated over HK$570,000 (£57,000) in my MPF savings account. As I was preparing for my relocation to the UK, I had a consultation session with one of the MPF representatives at the HSBC headquarters, as I would need the funds as a single mother to support my new life abroad. My question to HSBC was simple: How can I withdraw all of my MPF savings, since I am permanently leaving Hong Kong? Instead of giving me direct instructions, the exchange was most surprising:
Representative (Rep): Where are you moving to?
Me: The UK.
Rep: Are you a British citizen?
Me: No.
Rep: What visa will you be using?
Me: The BNO visa.
Rep: Oh! Since the government no longer recognises the BNO passport, the Mandatory Provident Fund Schemes Authority (MPFA) will not approve it; we cannot release your pension.
Me: Is this definite? Has anyone successfully withdrawn their pension with the BNO visa?
Rep: No.
Just like that, I said goodbye to the HK$570,000 that is rightfully mine. I was hoping to use this money to clear some of my credit card debts, fulfil the ”12-month rent up front” requirement here in the UK, and have some to spare for the heating bills in winter.
The rent and cost of living in Hong Kong are among the highest in the world, and it is difficult for people to have extra savings in the first place. Yet many, still in their prime working years, are leaving with what they have to rebuild their lives abroad given the increasing severity of the human rights situation in Hong Kong.
So, the Hong Kong authorities have responded by building a “financial Berlin Wall” to stop the growing exodus. Rebuilding a life from scratch is never easy, and adding financial obstacles in the picture is another level.
I do have hope given the progress in Hong Kong Watch’s campaign to release the MPF savings of Hong Kongers, and the widespread support from the UK Parliament and even acknowledgement from the government.
At the end of the day, this seems to be the price I have to pay for freedom. However, we should beware. The world seems to be moving back to the situation from which we escaped in the 1980s. Globalisation is in decline. Economic freedom is in decline. This example shows that even exchange controls, which we thought were a thing of the past, are on their way back. I have been able to leave Hong Kong, but at a great cost. The Chinese government is using exchange control to curtail freedom of movement which, in turn, increases its ability to oppress others. It is a neat illustration of the intrinsic link between economic and political freedom, long recognised by free-market political economists such as Milton Friedman.
Chloe Lo is a former Bloomberg reporter, who covered court proceedings tied to the Hong Kong unrest and the new national security law.