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Opinion
Hong Kong must be ready for Chinese firms’ ‘great repatriation’ of wealth
The city’s biggest growth catalyst of the next decade will be to embrace its role as China’s global treasury capital
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Chow Chung-yan began his journalistic career at the South China Morning Post and rose to become Editor-in-Chief in 2025.
In my travels around the world, I’m often asked if the best days of Hong Kong are behind us. My answer is always an emphatic “no” – and this is not merely a pep talk. When you step back and take a broad macroeconomic view, it becomes clear that, structurally speaking, our greatest opportunities lie just ahead.
While many commentators scramble to draw parallels between Japan’s “lost decades” and China’s economic headwinds, they miss a far more apt and profound comparison: the phenomenon known as the “Great Repatriation”.
In global financial circles, this term describes the unique structural shift that began in the 1990s. Facing sluggish growth and deflation at home, Japanese conglomerates began aggressively shifting their manufacturing bases overseas. Unlike capital flight in emerging markets – which is often sudden, panicked and triggered by crises – Japan’s transition was a controlled, institutional evolution.
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It transformed the country from a traditional manufacturing exporter into the world’s pre-eminent “foreign rentier” state. Over the decades, Japan built a multitrillion-dollar portfolio of overseas assets, equivalent to or exceeding its gross domestic product.
For years, despite intense speculation from Wall Street, Japanese corporations chose to keep their overseas profits abroad rather than bring them home. That dynamic shifted dramatically in 2009. Spooked by the global financial crisis, Tokyo overhauled its tax regime to encourage corporations to funnel offshore profits back home.
Intriguingly, China is tracing a similar trajectory, albeit on a grander scale and with distinct characteristics. As the world’s undisputed manufacturing powerhouse, China commands 30-35 per cent of global value-added production – significantly higher than Japan’s share at its 1990s peak. Faced with fierce domestic competition, deflationary pressures and rising foreign tariffs, Chinese manufacturers are aggressively expanding abroad. This wave is a well-documented phenomenon and has brought substantial business to Hong Kong.
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