HONG KONG (BLOOMBERG) – Signs keep emerging that Hong Kong’s financial hub status is increasingly at risk. The latest red flag comes from a new survey by the Hong Kong Investment Funds Association that shows more than a third of fund-management companies moved some or all regional and global roles from Hong Kong to other places.

Nearly 70 per cent of the respondents said it was “extremely difficult” or “difficult” to hire and retain expatriates in the city, and almost 20 per cent of them had to offer hardship allowances to lure talent to relocate there, according to the July poll of 36 firms.

Hong Kong saw a record 121,500 drop in its population in the year through June, partly due to strict Covid-19 policies.

Beijing’s tightening grip has also prompted more people to leave, fuelling concerns about a brain drain.

Former Chief Executive Carrie Lam implemented some of the city’s stringent social distancing measures last year. While her mass testing plan never materialised, people fled, due to growing concern about school disruptions and fear of family separation in quarantine.

Hong Kong has since lifted many of its restrictions, but a three-day hotel quarantine requirement for arrivals still isolates the city from much of the world.

Ms Sally Wong, the investment-fund association’s chief executive officer, urged the government to provide a clear road map for removing restrictions.

She added that Hong Kong’s plan to host a high-level, government-sponsored financial forum in November could become an opportunity for the city to open up.

“It’s an important window for Hong Kong to show to the rest of the world that we are back,” she said. “We will come back with a very strong rebound. People will come back to Hong Kong very soon, because there is a lot that only Hong Kong can offer.”

She declined to identify respondents of the survey.

The associations counts global giants such as Capital Group, FIL Investment Management and BlackRock as members.

About 13 per cent of the firms in the survey have cut headcount in the city, and 55 per cent have added jobs elsewhere.

The companies have also provided flexibility for staff locally.

Most of them – 58 per cent – have allowed Hong Kong-based employees to work from other offices on a temporary basis for three to six months, and 32 per cent of them have let some staff members work overseas permanently.