Hong Kong is being called the ‘new Switzerland’ – what’s changed?
By Thomas Barrie for The Rest is Politics
“In recent years, the story emerging from Hong Kong has been of violence, repression of freedom of expression, an exodus of foreign capital, and talent brain drain.
Yet last month, Hong Kong overtook Switzerland as the world’s largest wealth hub in 2025, for the first time, according to a report by Boston Consulting Group (BCG).
In other words, a greater volume of private wealth flowed into the Asian city than to the European country known for banking, watches, low taxes and a thriving economy.
It could mark an astonishing turnaround for a city that saw 190,000 people leaving between 2019 and 2022, as China tightened its grip on the former British colony.
Their reasons for leaving? A violent government response to pro-democracy protests and a damaging “Zero Covid” pandemic policy which led some to write the city off as a global financial centre.
We spoke to economists, journalists and China watchers in and around Hong Kong to examine the decline of the city at the turn of the 2020s, how it seems to have bounced back, and who exactly is investing anew.
What emerged was a complex picture from a place which has long defied categorisation and shown an ability to evolve from its origins as a simple fishing village – via industrialisation in the 1950s and 1960s and the British pull-out in 1997 – to become a humming global financial centre increasingly under the watchful gaze of Beijing and the Chinese Communist Party (CCP).
An exodus of talent and wealth
In 2020, as Nick Marro, Principal Economist for Asia at the Economist Intelligence Unit, explains, “Hong Kong purposefully cut itself off from the rest of the world”.
“This really led to an exodus of talent and people leaving the city, moving away from Hong Kong, and towards Singapore,” said Marro, who has lived there since 2017.
The double impact of mass pro-democracy protests, followed shortly by extremely tough Covid-19 restrictions, meant that Hong Kong’s investment-friendly image took a significant hit.
The announcement of a proposed National Security Law (NSL) in 2019, that would more closely align Hong Kong to the Chinese mainland – including permitting extradition, secret trials and Beijing-appointed advisors to oversee its implementation – led to massive public protests. Ten thousand demonstrators were arrested, hundreds injured and two killed.
But the law was passed, and by January 2021, the authorities had arrested 47 pro-democracy figures from across civic society under the law, including student leader Joshua Wong and businessman Jimmy Lai.
In response, then-Deputy Prime Minister of the UK, Dominic Raab, extended the right to Hong Kong residents with British national (overseas) (BNO) status and their dependents to come to live, study or work in the UK for five years. By December 2022, 105,000 people had fled to the UK under the scheme.
The outlook in the city, says Ryan Ho Kilpatrick, a Hong Kong-based journalist who was born and raised there, was “extremely grim.”
Simultaneously, Hong Kong was placed under mainland China’s ultra-strict “zero
Covid” policy.
While many expats felt insulated from the political upheaval and were willing to tolerate a short-term Covid lockdown, the Omicron variant overwhelmed the health system.
In Hong Kong, where Covid numbers were previously low, the death toll spiked and became one of the world’s highest in early 2022. The city authorities doubled down on restrictions and many white-collar expats, who had not been able to see their families in two years, decided to leave entirely.
Expat residents fled, while property prices crashed in parallel with the Chinese mainland.
The Hong Kong dollar, pegged to the US currency, suffered from interest rate hikes in America that pushed up mortgage costs.
To a would-be wealth manager or someone running a private office, Hong Kong looked unstable and unprofitable.
“In the immediate aftermath of the protests and the pandemic, this narrative began to emerge that Hong Kong was cooked,” recalls Ho Kilpatrick. “It was done for: just pack it up and go.”
Luring wealth back
Yet since 2024, capital has been trickling back in. “Since late last year, we’ve really started to see a recovery picking up pace,” says Leah Fahy, Senior Economist and a China expert at Capital Economics.
In last month’s BCG study, Hong Kong was placed at the pinnacle of international investment, recording the highest global volume of cross-border wealth bookings – essentially a measure of how much wealth is handled in a particular financial jurisdiction.
The city just edged out Switzerland, recording $2.95 trillion of cross-border assets under management to the European haven’s $2.96 trillion. Cross-border wealth grew by 10.7% in Hong Kong in 2025, and only 7.6% in Switzerland.
The city has multiple pull factors working in its favour, not least low taxes: there has
never been VAT or sales tax, nor capital gains tax, and estate and inheritance taxes were abolished in 2006.
Changes to tax law in 2024 partially abolished stamp duty and reduced levies on the profits of family offices.
In March that same year, the city launched the New Capital Investment Entrant Scheme (New CIES), which offers residency visas to anyone who can satisfactorily show they have HK$30 million (£2.85 million) to invest, as well as their spouse and dependent children. This was essentially a ploy to entice family offices to invest their money in Hong Kong.
By September 2024, authorities recorded more than 5,000 enquiries into the investment scheme.
To the city’s cheerleaders, it’s not surprising that it has rebounded quickly. Hong Kong is around four hours’ flight from Beijing, Seoul, Tokyo, Singapore and Bangkok.
It sits at the heart of China’s Greater Bay Area – a region of some 86 million people
whose GDP of nearly $1.9 trillion would have made it the world’s 18th largest
economy in 2023, were it its own country.
It also retains traces of British colonial control, which boost its soft-power cachet in comparison to the Chinese mainland.
British private schools including Harrow, Wycombe Abbey, Shrewsbury Abbey and Malvern College all have outposts.
Tori Cadogan, an education expert and editor of the Tatler Schools Guide, describes Harrow Hong Kong as “a phenomenal success story”. She puts the education sector’s ongoing growth partially down to enticing financial incentives. “The big school groups in the UK will open wherever there are golden visas, and wherever people are moving according to macroeconomic trends,” Cadogan says.
High-profile sporting events such as the HK Rugby Sevens, alongside a low crime rate, and dozens of Michelin-starred restaurants, all help contribute to the impression that Hong Kong can still compete with other centres of international capital.
“The rumours of Hong Kong’s death have been greatly exaggerated,” jokes Ho Kilpatrick. So, does Hong Kong pose a threat to Switzerland? Not quite.
The 15 minute commute
Look more closely at the influx of cross-border wealth, and you’ll see that it hasn’t come far.
According to the BCG report, more than 60% of assets under management in Hong Kong had their origins on the Chinese mainland.
While international business is returning to the city, incentives offered to mainland investors from Beijing and Hong Kong alike are driving its recovery.
A case in point is the city’s “Top Talent” scheme, a visa which allows those with a
demonstrable income of more than HK$2.5 million (approximately £237,000) per annum to move to Hong Kong with their dependents for three years.
According to The Financial Times, about 90,000 mainland Chinese arrived in Hong Kong in 2025 via visa schemes for top talent workers, up from 19,000 in 2016.
Ho Kilpatrick estimates that 95% of Top Talent visas are drawn from the mainland.
With the Chinese city of Shenzhen a mere 15 minute commute away, workers from the mainland are increasingly coming over for jobs that might once have been filled by expats.
Ho Kilpatrick, Fahy and Marro all separately agree that, at least anecdotally, non-Chinese-speaking foreigners are having more trouble securing white-collar jobs than in the past.
Cadogan, the education expert, meanwhile, notes that many pupils at prestigious schools in Hong Kong come in from Shenzhen each morning or to board for the week.
The days of Brits moving seamlessly to the city – once leading to the derisory acronym “FILTH”, or “Failed In London, Try Hong Kong” – are over.
“Expats expect to be hired on virtually local terms now,” says Ho Kilpatrick. “You don’t really get the company car, flat, and club memberships anymore. That’s a thing of history.”
As the numbers of Chinese educated abroad increases, there’s simply less demand for Westerners.
The trend has been referred to as “Mandarinisation”, and on the one hand, it’s simply another reorientation on the part of a city which has shown a knack for reinventing itself time and again.
On the other, it’s symptomatic of place which, slowly but surely, is being pulled closer into Beijing’s political orbit.
‘They’ve gone underground’
The vigil in Hong Kong’s Victoria Park, in memory of those killed during the CCP’s 1989 clampdown on pro-democracy demonstrators in Tiananmen Square, would attract thousands on June 4 each year.
It was the only place in the whole of China where such a commemoration was permitted. Since 2020, it has been banned.
Even symbolic commemorations of the massacre are circumspect.
This year, an artist named Sanmu Chen was stopped by police while attempting to hang a 6.4 metre thread from a lamppost in Hong Kong, in reference to the date.
Hong Kong was once the place where dissidents could gather, says Marro, where ideas could be openly discussed by the overseas diaspora and activists alike. This might range from advocacy for full Cantonese independence to complaints about government abuses of power.
On Hong Kong’s national day on July 1, there was traditionally a peaceful protest at which anyone could air a grievance, with topics ranging from independence to “kids protesting that they have too much schoolwork.”
Yet that “emblematic” march no longer takes place, says Marro. Many of those people have either left Hong Kong entirely or “gone completely underground,” he says.
He points to the Economist’s Global Democracy Index, a measure which aims to assess the quality of democracy around the world, noting that Hong Kong’s score saw one of the sharpest deteriorations ever recorded in 2019 and 2020.
The Swiss story
Switzerland might not have registered the same volume of investment in its ledgers as Hong Kong in 2025 – yet its status as a destination for international capital is unlikely to suffer.
The former is a famously neutral haven for assets, while the latter is increasingly under the thumb of a regime whose interests might be at odds with those of the West in the very near future.
Marro sums it up: “I think that the reputation of Switzerland being ‘the safe haven’ is something that Hong Kong is really going to struggle to dislodge.”
As Alastair said on the podcast episode that inspired this piece, recalling the British handover of Hong Kong to the Chinese: “Back in 1997, and we were there for the handover, it was ‘One Country, Two Systems’.
“I think you can safely say it’s ‘One Country, One System’. You’d have very little sense of being in a place that was once run by the Brits.”
Politics and freedom of expression is still nowhere nearly as harshly policed in Hong Kong as in mainland China, agree both Marro and Ho Kilpatrick.
Nonetheless, there has been a chilling impact on freedom of speech in the city, alongside the concrete restriction on political rights. The same goes for the once-vibrant civic life.
“The sense that things were electric that you felt Hong Kong had in the 2010s comes back intermittently,” says Marro. “But it’s not constant.”
Cadogan, the education expert, visited Hong Kong over Christmas. “It was booming,” she says. “There’s not really another word for it.”
The caveat is that it’s increasingly mainland Chinese money fuelling that boom. And, looming over it all, Beijing maintains a watchful eye.