‘The future is elsewhere’ for Hong Kong’s youth as the outlook is bleak, says analyst

Hong Kong will likely see a mass migration of its youth as the city is thrust into a renewed period of uncertainty, following China’s decision to impose a national security bill, one analyst warned.

“For young people in Hong Kong, the future is elsewhere, it’s as simple as that,” David Roche, president and global strategist at Independent Strategy, told CNBC’s “Squawk Box” on Friday.

“Young people, with all of their lives ahead of them, they’re making their own decisions,” Roche said, adding that Hong Kong’s youth are looking to move abroad for reasons such as education and their careers. “A big proportion of these people will seek to leave, whether they’re protesters or not.”

Roche’s comments came after China’s National People’s Congress on Thursday approved the proposal to implement new national security legislation for Hong Kong, a special administration region under China. The move has raised questions over the territory’s semi-autonomous status which took effect when the former British colony returned to Chinese rule in 1997. 

In response to Beijing’s move, U.S. President Donald Trump announced Friday that he would be taking steps to revoke Hong Kong’s preferential trade and travel privileges. One concern among observers is that any potential sanctions which the U.S. applies on China, could also be imposed on Hong Kong. 

Hong Kong is governed by the “one country, two systems” principle which gives it certain freedoms that are not available to those on the mainland, including limited election rights and the power of self-governance. Critics say the new law will grant Beijing greater powers to crush dissent.

Even before the proposed security law, Hong Kong was rocked by months of pro-democracy protests last year that were sparked by a proposed extradition bill. Those mass demonstrations turned increasingly violent and morphed into broader anti-government demonstrations. Months of civil unrest thrust the city’s economy into a recession as tourist arrivals and retail sales took a hit.

The coronavirus outbreak, with the city reporting its first case in January, brought some reprieve to the city as social distancing measures were put in place. But protesters are back on the streets again after China’s new law was proposed.

“Whether you’re a protester or not a protester in Hong Kong, if you’re a young person, the outlook for you given wage levels in Hong Kong and in the Greater Bay Area and everything else. The outlook for you is — career-wise, lifestyle-wise — not good,” Roche said.

“It’s very, very bad. It’s probably the biggest hit that can come from the deteriorating situation,” he added.

Taiwan has stepped forward with the offer to help resettle Hong Kongers who want to leave the city. The U.K. has also reportedly suggested the possibility of offering Hong Kongers with a British National (Overseas) passport — a document given to some citizens of the city during its days under the colonial government — a path to citizenship, according to the BBC.

Still, it is not known how many would actually be able to go away.

According to Roche, “approximately 70% of all the people who have demonstrated or voiced either pro-democracy or more independence-type thinking in Hong Kong, do not have a passport which enables them to leave.”

Commenting on the current sentiment among Hong Kong’s youth, Roche said: “Young people are still pretty defiant and I expect we haven’t seen the last of the street demonstrations.”

Still, he warned that the repression will get “much more severe.”

“We’ll see to what extent that actually triggers huge crowds coming out on the streets or not,” the strategist said. “That is clearly, clearly a risk.”

“I would say the mood is not resigned, it is somber,” Roche said.

— CNBC’s Yen Nee Lee contributed to this report.