by Giorgi Mikhelidze (Partnership Manager, Forex News Now)
Hong Kong has been an epicentre of most global controversy for the past month or so. The battle against the extradition bill has been fierce and millions are still taking to the streets trying to protect their rights and combat the encroaching Chinese jurisdiction on Hong Kong’s territory.
Multiple local citizens have said that if the bill passes they will not feel safe anymore as Chinese laws are completely different from what Hong Kongers are used to in terms of minimal censorship and free-market opportunities.
However, aside from the citizens themselves, concerns have also been voiced by several Fintech companies located within the region, saying that their attempts at creating decentralised platforms could fall into jeopardy under Chinese governance.
Although Chinese laws have largely led to the country becoming an economic powerhouse of modern times, it is still being frowned upon by most international experts for being too restrictive and centralised.
Where could these companies go?
These fintech companies, most of whom are somehow related to the blockchain technology have several countries they can relocate to, but all of them come with their own benefits as well as difficulties.
Two jurisdictions that can be thought about straight from the top of the mind are South Korea and Japan, but they would be the least effective markets. One for being way too expensive in terms of operational costs, staff, license, and real estate. The second for having heavy regulations on Blockchain.
There is also Taiwan that can be considered, but it is also under heavy Chinese pressure, which does not make it a guaranteed safe location.
The only option that these Hong Kong-based companies are left with in terms of acceptance and relative ease of operational costs is Australia due to its location and policies.
Macau and Hong Kong already anxious for Australia
Although Macau has not been touched by Chinese influence as directly as Hong Kong yet, the local authorities, companies, and citizens understand that it’s just a matter of time before that happens. Therefore they’ve started to look for alternatives.
According to the chief editor of the Australia Playamo blog, Chris Chartoff:
“We’ve been experiencing a massive surge of visitors on our blog from Macau and Hong Kong. Although we don’t directly connect this to the events currently happening in Hong Kong, we’re definitely sure that citizens and companies are starting to become much more interested in the Australian market and are scouting out the competition before moving here. At least that’s what we can say about visitors from Macau as their primary business is and most probably always will be the gambling industry”
Having smaller Australian companies being “studied” by potential operations managers from Macau and Hong Kong is already an indication that not only are Fintech companies preparing to uproot, but also the notorious Macau casinos that are starting to fear Chinese law on local soil.
When it comes to both fintech and wagering, Australia is able to accommodate each of these industries due to already existing local market demand and easy access to the local markets.
When could the migration occur?
Judging by the fact that there is very little progress being made from the protests, the local companies should already have a plan written down on how they will be exiting the Hong Kong market in the future.
It is quite likely that the migration will occur once the local, as well as the Chinese government, start doubling down on their decision by making clear announcements that no protests will stop the implementation.
Should such statements be made it will be a clear signal to these companies to high-tail it out of there, and most likely relocate to Australia.
As already mentioned, this is warranted not because they can’t generate profits under Chinese law, but because most fintech and blockchain startups focus on decentralisation and added value on offered services, which could become an issue under Chinese jurisdiction.