Global Courant 2023-05-05 22:18:16
FedEx Corp, one of the top three express parcel carriers along with UPS and DHL, is reportedly moving its Asia-Pacific regional headquarters from Hong Kong to Singapore to achieve “greater speed and agility”.
Kawal Preet, regional president of FedEx Express, is transferred to Singapore, Bloomberg reported, citing an unnamed member of staff; some other Hong Kong-based executives will move to Singapore in September.
The US carrier said in an emailed statement quoted by Bloomberg that it can connect its Asia-Pacific, Middle East and Africa (AMEA) operations in Singapore more quickly and flexibly. It said less than 15% of its positions in Hong Kong will move to Singapore, while retaining a “significant” presence and leadership roles in the special administrative region.
The company said some functions that do not need to be located in the city of its headquarters will shift to Malaysia or India to cut costs.
Commentators said some foreign companies are leaving Hong Kong because they are unsure whether they will one day be targeted by China’s national security investigations or by the United States’ secondary sanctions as Sino-American political tensions rise.
“The move of FedEx’s regional headquarters is a blow to Hong Kong, which has always emphasized FedEx’s status as an international logistics hub,” said Chau Sze-tat, a Hong Kong political commentator. say on his YouTube channel. “The company is moving its senior executives to Singapore, which shows that it sees Hong Kong’s value as a regional logistics hub declining.”
“When foreign companies left Hong Kong in the last three years, the government could still blame their departure on the pandemic,” says Chau. “But if they are still leaving the city after all the Covid rules have ended, it shows that the long-term business climate in Hong Kong has deteriorated. Some foreign firms are concerned about the National Security Law.”
He says the fact that FedEx was investigated by the Chinese government in 2019 for withholding packages from Huawei Technologies may be a factor in the relocation of the US carrier’s regional headquarters.
On May 27, 2019, Huawei said it was reviewing its relationship with FedEx after the US carrier inexplicably diverted two packages bound for Huawei offices in China to the US and also attempted to divert two other packages. The next day, FedEx apologized for mishandling Huawei’s packages and said it had not received any external pressure demanding overcharge.
Image: Pandaily.com
Early next month, June 2019, the Chinese government said it was investigating FedEx in response to the issue raised by Huawei over misrouted packages. A little later, in late July, it said FedEx may have held back more than 100 packages sent to Huawei.
The incident was politically sensitive, as it came after Huawei Chief Financial Officer Meng Wanzhou was arrested in Canada in December 2018 on charges of violating US sanctions. Meng was released in September 2021 after a legal settlement with the US court.
There were tensions between China and the US grown after protests against extradition broke out in Hong Kong in June 2019. On Sept. 12, Todd Hohn, a FedEx Express pilot and a retired U.S. Air Force colonel, was detained at Guangzhou Baiyun International Airport for being detained during his departure, China’s foreign ministry said. He was granted bail but was under investigation for ammunition smuggling.
Hohn was allowed to leave Guangzhou on June 27, 2020, just days before the national security law was implemented by Beijing in Hong Kong on June 30.
Anthony Leung, General Manager of FedEx Express Hong Kong and Macau, told HK01.com said in a December 2020 interview that he was confident that he could run the express in Hong Kong despite the volatile global situation.
Commenting on the business climate in Hong Kong, Leung said Hong Kong is an international financial center with many advantages, including a prime location, zero tariffs and simple customs procedures. He said FedEx would continue to maintain its Asia-Pacific headquarters in Hong Kong, while senior management and support staff would work in the city.
But in January 2021, FedEx began moving its Hong Kong-based pilots to San Francisco, saying its operations were impacted by the Asian financial center’s strict Covid rules. In November 2021, it said it would close its crew base in the city.
While Hong Kong ended all of its anti-epidemic rules by the end of 2022, deteriorating US-China relations continue to create operational risks for Hong Kong-based foreign companies, some commentators said.
In February this year, the US sanctioned five Chinese companies, including one in Hong Kong, for allegedly providing services and products to the Russian military. Last month, it sanctioned 12 Chinese companies, mainly based in Shenzhen, for shipping electronic parts through Hong Kong to Russia.
By the way, Chief Executive John Lee said in January that Hong Kong will pass additional national security legislation by the end of 2024, under the requirement of Article 23 of the Basic Law.
The current National Security Act covers crimes such as secession, terrorism, subversion of the central government and collusion with foreign powers. The new legislation will target treason, sedition and theft of state secrets espionage activities.
Read: The trade in fentanyl and Russia leads to new friction between China and the US
Follow Jeff Pao on Twitter at @jeffpao3
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