Brian Schwarz notes in China Challenges that the days of glamorous living for foreign expats in Hong Kong may be coming to an end.

Coming just days after the conservative Heritage Foundation awarded Hong Kong the top spot in its 2006 Index of Economic Freedom, the local government is debating an "anti—racism" bill that would require companies to justify their offers of generous "expatriate packages" to foreign employees.

Under the proposed legislation, firms will have to prove the foreign recruit has expertise not readily available in Hong Kong, and permanent residents will not be able to receive such special terms.

The move, outlined by government officials on Tuesday, will force a rethink of long—standing hiring practices before 1997 when the city was a British colony. A local recruitment expert described the law as a "nightmare" and said it would make Hong Kong a less attractive place to do business.

No doubt the Singapore authorities are rubbing their hands together with glee over the influx of high paying jobs.

Doug Hanson adds:

The German government enacted a similar restriction on US contractors years ago.  As part of a new SOFA (Status of Forces Agreement), the US government has to prove that contractors possess a unique skill that cannot be replicated by local labor.  Contractor positions that support US tactical training are generally no problem as Germans do not have a high level of knowledge on US training technology and methods.  However, work in IT and IT management can probably be handled by the locals who speak good English and know the local comms systems.  US IT types who elect to tough it out will then pay the punitive German income tax.  Needless to say, US and foreign expertise go elsewhere to earn a living.