Dual citizenship crackdown could fray Canada’s Hong Kong ties

New restrictions threaten transpacific economic and social links, Asia analysts say

More than 300,000 Canadian citizens live in Hong Kong | 4045/iStock/Getty Images Plus

Hong Kong’s recent decision to crack down on dual-nationality residents holds potentially grave consequences for the more than 300,000 Canadian citizens living in the Chinese Special Administrative Region (SAR).

That’s the observation of several Canadian experts on Hong Kong and China, who add that new restrictions – which move Hong Kong closer in policy alignment with China’s central government – may throw Hong Kong’s role as an international business centre into the deep freeze.

“This time, it’s real,” said Kenneth Tung, public affairs commentator on Fairchild Radio and the former chairman of immigrant services group SUCCESS. “Even though the Chinese government has been very technical in tightening and loosening laws in Hong Kong for the last few years, people realize what is happening, and now there is no hope … China will not provide ‘one country, two systems’ as it promised to the Hong Kong people.”

Hong Kong’s close links to Vancouver have been well documented. According to Global Affairs Canada, Hong Kong has been Canada’s third-largest market for service exports ($2.9 billion in 2017) and 13th largest for merchandise trade ($2.2 billion). More importantly, waves of immigration from Hong Kong in the 1980s and 1990s, followed by a reverse flow of Canadian citizens who returned to Hong Kong to pursue career opportunities, means that there are an estimated 300,000 Canadians who live in Hong Kong. Many also hold Hong Kong residency cards and are therefore also considered Chinese citizens.

The latest regulation change means that Canadians holding dual citizenships will have to choose between becoming full Chinese citizens – losing Canadian diplomatic protection in doing so – or keeping their Canadian status, which means that Hong Kong can deny their permits to live, work and hold property in the city, or even expel them from their longtime homes.

“Presumably, if a Canadian citizen were to travel to Canada for family purposes or other reasons … and then sought to re-enter Hong Kong, they could be denied entry if Hong Kong immigration determines the purpose for re-entry is not for a visit but rather for work,” said Charles Burton, senior fellow at the Macdonald-Laurier Institute and a former counsellor at the Canadian Embassy in China. “The other issue is, if a Canadian of Hong Kong origin decides to go to Hong Kong to work and had to process a work visa through Chinese immigration, would they be turned down?”

Tung, who emigrated to Canada prior to 1997, is also originally from Hong Kong. He noted that almost all the people holding Canadian passports in the city that he has talked to are either leaving or planning to leave.

But Tung Chan, a former Vancouver city councillor and deputy mayor who served as CEO of SUCCESS, said many have shown a reluctance to leave Hong Kong despite current events.

“I’d use the term ‘a trickle’ for people coming back to Canada,” said Chan, who is also a former Hong Kong resident. “We are not seeing a panic or a big wave … but I do see some cases where the older generation who moved back to Hong Kong are staying while their grown children are leaving. Young people are making their own decisions, even if their parents are supporters of the PRC [People’s Republic of China].”

He said China is unlikely to reverse course on its latest push to reaffirm control over Hong Kong, adding that the city’s policy change driving people to leave the uncertainty of the city may be Beijing’s goal.

“The goal is to get people who don’t really like the system – and cannot survive in that new system – to slowly move out.”

Regardless of its purpose, Burton said, the new policy on dual citizenship in Hong Kong creates a huge obstacle for Canadians living and working in the city, because there has been practically no enforcement of China’s stated rules that outlaw dual citizenship officially prior to this month.

So the close personal ties that Canadian citizens have made while making Hong Kong their home now create a complex web of regulatory entanglements as each individual has to decide who in their families is Canadian and who is not.

The most worrisome aspect in the regulatory change, Burton added, is that it goes along with Beijing’s increasing push internationally to represent all people of Han Chinese (the main Chinese ethnicity) descent – essentially pushing those in overseas communities like the expats in Hong Kong or even groups in Vancouver and Toronto to choose sides.

In that sense, the Hong Kong immigration rules are essentially an attempt to clearly mark a resident’s loyalties to one system or the other.

The creation of the us-versus-them dynamic also hurts Hong Kong’s future as an international finance and trade centre, Burton said.

“It could be that Hong Kong becomes more like a Chinese city like Wuhan rather than being able to preserve its distinct business culture based on freedom of expression, uncensored internet, international accounting standards and free exchange of currency. All of those things made Hong Kong very attractive to international business people as opposed to China – which has improved, but still isn’t as attractive a place to live and work as Hong Kong.”

But Chan said Hong Kong’s global economic role should not be underestimated – especially when it still provides the West and the enormous Chinese market with the closest thing to an exchange point and has a western-based judicial system that makes businesses more comfortable to operate there versus a typical Chinese city.

“The reason why I say that Hong Kong’s role will not change is because its talent pool is so deep,” Chan said. “The people are so quick in learning and re-training. Hong Kong has gone through many different crises, and every time, it has survived. It is difficult to bet against Hong Kong people.”

But Tung said that, for businesses wanting the Chinese market, a city like Shenzhen within China now makes more sense as an exchange point.

Hong Kong, meanwhile, is stuck in a situation where economic potential is stifled by the internal struggle between cultures: Cantonese versus Mandarin, West versus China, free-market versus state-controlled.

Tung, Chan and Burton agree on one point: Canada must step up its outreach to Canadians in Hong Kong to offer assistance and extend diplomatic protection as much as possible.