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 * A report on the decline in the number of overseas engineering professionals in Hong Kong: causes and possible solutions**


 * 1. Introduction**


 * 1.1** This report was requested by Mrs. Y.W. Smith, the Chairperson of the Hong Kong Engineering Association (HKEA), on 3 October 2007. The report is a response to the falling numbers of engineering professionals from overseas in the Hong Kong Special Administrative Region (HKSAR) since 2001, a phenomenon which is causing concern in engineering-related industries. The main aim of the report is to identify the causes of the decline and to recommend ways of attracting expatriates to the HKSAR in order to help the city take advantage of the booming infrastructure projects in the region.


 * 1.2** In the report, I present findings which attempt to explain the decline in the number of engineering professionals from overseas; a decline which can be traced back to the period following the peak of the number of overseas professionals employed in 2001. Following the findings, brief conclusions are drawn and a number of recommendations are made as to how engineering professionals might be induced to participate in Hong Kong’s effort to strengthen its role in the world economy.


 * 2. Procedure**

Data for the report were gathered between November and December 2007. Primary data were collected by interviewing 200 randomly-selected engineering expatriates in the HKSAR. Thirty engineering firms were surveyed in order to determine their overseas employment rates. Secondary data were obtained from literature produced by the Hong Kong Institute of Engineers (HKIE) and reports on engineering occupations in Hong Kong between 1996 and 2007.


 * 3. Findings**


 * 3.1** **Exchange Rates**

Perhaps the most important cause of the declining number of expatriate engineers is the declining value of the Hong Kong dollar over the last few years, a result of the linking of the Hong Kong dollar to the US dollar. As the US dollar has lost value in relation to other world currencies, including the Euro, the British pound, and the Australian dollar, this has also meant that the value of the Hong Kong dollar has also reduced. This has led to the decline in the attractiveness of the salaries that engineering firms in Hong Kong are able to offer. As an example, in 2001, an engineer being paid HK$36000 per month could exchange that into GBP3000. By 2007, the engineer could only exchange it into GBP2250, a decline of around one third. The drop in the number of engineering expatriates after 1997 is reflected in the overseas employment rates of engineering firms in the HKSAR surveyed in this report (see Fig. 1 below).


 * Fig. 1: Overseas employment rates among engineering firms in the HKSAR from 1996-2007**

The graph shows that at the beginning of the period overseas employment rates were strong and, around 2001, reached a peak of approximately 60% of total engineering staff numbers in the firms surveyed for the study. There then followed a steady decline to a low point of about 40% at the end of 2004 before levelling off at around 30% until 2006, when there was a sudden drop.

However, the exchange rate is by no means the only reason behind the declining numbers of engineering expatriates. Another concern is that the aspirations of most engineering professionals have changed. Ten years ago, Hong Kong, with its image as a cosmopolitan city, was regarded as a potential springboard to the mainland - a land of opportunity. However, the availability of jobs and career prospects with multi-national corporations on the mainland are now as good as, if not better than, in Hong Kong. To most, the HKSAR is no longer a safe and cosy ‘half-way house’ to the mainland on their career path. Entrepreneurial spirit is much cherished nowadays. The trend now is to take on challenges, be adventurous and ready to take risks.
 * 3.2 Entrepreneurial Spirit**


 * 3.3 Environmental Issues**

Another important concern for the HKSAR is that expatriates, especially those with a family, are becoming increasingly aware of environmental issues and, while other countries have been cleaning up their environment, the HKSAR has lagged behind in environmental initiatives. The air is more polluted than ever and the harbour is still smelly and littered with tonnes of rubbish. The level of noise pollution is also extremely high. Increasingly, overseas professionals are hesitant about working in the HKSAR, as it might put their own and their family’s health in jeopardy.


 * Table 1 Views of expatriate engineers on Hong Kong’s environmental issues**

As Table 1 below shows, most of the American engineers we interviewed stated that, as a direct result of the heavily polluted environment, they would probably not continue to work in the HKSAR at the end of their contracts. Nearly three quarters of their Australian counterparts and more than half of the British agreed with the views expressed by the American engineers.
 * **Nationality** || **% of expatriates making negative comments**
 * on Hong Kong’s environment** ||
 * American || 82 ||
 * Australian || 73 ||
 * British || 53 ||
 * German || 48 ||
 * French || 42 ||


 * 4. Conclusion**

The findings clearly indicate that engineering expatriates are looking elsewhere for employment opportunities. Our research has shown, however, that the HKSAR simply does not have enough attractions to keep overseas professionals. It can be concluded that to encourage engineering professionals to come and stay, the HKSAR should put in place a programme that is conducive to creating a more vibrant, technology-savvy and welcoming work and living environment, as well as improving salaries and benefits.


 * 5. Recommendations**


 * 5.1** Since the HK$ has been declining in value in relation to other world currencies, engineering firms should increase expatriate engineers’ motivation to work in the HKSAR by offering improved salary incentives. These could include payment in currencies such as the Euro or British pound.


 * 5.2** In view of the decline in expatriate engineering professionals in the HKSAR, we suggest that steps be taken to disseminate information about the prospective development of various high-profile, multi-billion dollar projects funded by the government or corporations in the HKSAR such as the Hong Kong – Zhuhai – Macau bridge. A promotion campaign would probably help to attract expatriate engineers to work here.


 * 5.3** Given that so many expatriates are deeply concerned about the HKSAR’s polluted environment, we also recommend that the HKIE form a sub-committee to lobby the government to take measures to clean up the environment as a matter of urgency.