HK’s zero-COVID policy may Weaken Financial Hub Status

Hong Kong’s zero-COVID policy and strict quarantine requirements for international travellers threatens to undermine the city’s status as a financial hub, according to a financial industry group warning on Monday.

The Asia Securities Industry and Financial Markets Association (ASIFMA) said a survey of members, including some of the world’s largest banks and asset managers was conducted. The survey result showed 48% contemplated moving staff or functions away from Hong Kong due to operational challenges. That also included uncertainty regarding when and how travel and quarantine restrictions will be lifted.

Virtually COVID-19 free, Hong Kong has some of the most stringent travel restrictions in the world. However, the city has no public plan for opening up to international travellers, unlike regional rival Singapore, which is slowly re-opening its borders.

According to local leaders, their focus is removing restrictions on travel from Hong Kong to mainland China, which also has strict entry restrictions. Currently, travellers from Hong Kong to the mainland must still undergo quarantine.

In an open letter to Hong Kong’s financial secretary Paul Chan, Mark Austen chief executive of Asifma wrote that Hong Kong’s status as an international financial centre is increasingly at risk, along with its long-term economic recovery and competitiveness as a premier place to do business.

Some of the recommendations made in the letter included publishing a roadmap for exiting Hong Kong’s ‘zero-case’ based COVID-19 strategy beyond solely the immediate goal of opening borders with China and also prioritising vaccinations.

Since the start of the pandemic, Hong Kong has reported just over 12,300 cases, which were largely imported, and 213 deaths.

In Singapore, quarantine-free travel is expanded to nearly a dozen countries. Authorities, however, are struggling with how to do so, while trying to stop a surge of Covid-19 cases among older people. Additionally, among those with weak immune systems.

Global Banks Pressure Hong Kong to Ease Restrictions

Global banks are pressuring Hong Kong to ease its strict quarantine rules and abandon its zero-Covid policy. This followed a survey that found almost half of major international banks and asset managers contemplating moving staff or functions out of the city. 

Other financial centers like Singapore, London, and New York are starting to get back to normal. They have been easing travel rules, while seeking to co-exist with the virus.

Austen said, the rest of the world is moving on, and Hong Kong isn’t articulating a plan that gives individuals the certainty they need. 

Some firms are moving operations, it’s not a huge amount right now, he said. The longer this goes on, the more difficult it is for firms to keep those positions in Hong Kong, he added.