Hong Kong’s lifting of hotel quarantine for arrivals was met with calls for the city to lift remaining restrictions on travelers to help revive its fortunes as an international financial hub.
While business groups and analysts welcome the move, they say the government needs to provide a clear road map to fully reopen. Nearly three years of pandemic restrictions have crippled Hong Kong’s economy and pushed residents and businesses to move abroad. Underscoring the urgency, a report showed Singapore overtaken the city that will be the highest financial center in Asia.
Travelers to Hong Kong will not need to undergo hotel quarantine or take a PCR test before departure, the city’s leader John Lee Office has partnered on Friday. However, they are restricted from going to bars or eating at restaurants for three days, while they must test every day for seven days. If they test positive, they must isolate for at least seven days.
“The relaxations are welcome because they represent major improvements,” said Sally Wong, chief executive officer of the Hong Kong Investment Funds Association, whose members include regional firms and some of the world’s biggest asset managers. , such as BlackRock Inc. and FIL Investment Management. “But we hope that the government can shed light on the last mile, ie, under what conditions all restrictions can be removed so that we can be like international financial centers?”
Hong Kong has suffered from an exodus of residents, with its population shrinking by the most in at least six decades in the year to June. At the latest sign of a brain drain, a survey of the Hong Kong Investment Funds Association shows that more than a third of fund management companies have moved some or all of their regional and global roles from the city to other areas. Investors are also down, with the city’s benchmark stock index at a decade low.
The image of Hong Kong at its ‘lowest point’
“Hong Kong’s image abroad is at its lowest point,” said Inaki Amate, president of the Spanish Chamber of Commerce. “A comprehensive plan, with incentives, actions and projects to change the general image but must also attract all the different audiences.”
Hong Kong has sought to show that the city is back on the global stage by hosting a number of high-profile events, including an international banking summit and the iconic Rugby Sevens tournament planned for November. Lee said there may be “a lot of room” for the government to further ease restrictions, without giving details. Among other rules, the town is still forced to wear a mask inside and outside, with violators subject to a heavy fine.
While Hong Kong has failed to join much of the rest of the world in lifting Covid measures, its closest rival Singapore has particularly benefited from aiming High incomes in Hong Kong with a new, flexible five-year visa.
“Singapore has been a major beneficiary of this talent outflow: they have succeeded in attracting many of our best and brightest people, as well as many of our best young businesses,” said Ben Quinlan. , chief executive officer of the consulting firm Quinlan & Associates .
The lifting of the quarantine is unlikely to give much impetus to the local retail and catering industry, as the border with mainland China remains closed, according to Nomura. Instead, the move will encourage residents to travel abroad, which could be negative for the economy, analysts led by Ting Lu wrote in a report dated Friday.
Cathay Pacific Airways Ltd.’s website and its low-cost unit crashed under a rush to find a flight on Friday. In a sign of how remote Hong Kong has become, in the first eight months of this year, the city’s airport handled only 3.4% of the passengers it did before Covid, and 30% of the flights.
The relaxed rules are unlikely to encourage tourists to visit, according to Michael Tien, a representative of the National People’s Congress and city legislator.
“For travelers abroad the lifting of hotel quarantine makes little difference” because “they still face the terrible PCR tests,” Tien said. “Hong Kong should scrap the three-day monitoring as well, otherwise it will be useless.”
Hong Kong’s strong currency can also act as a deterrent. The Hong Kong dollar, which is pegged to the greenback, has risen against every Asian peer this year—including a 24% surge against the Japanese yen and a 5% gain against the Singapore dollar.
The city’s economy needs a shot in the arm. Officials have already lowered Hong Kong’s growth forecast for the full year, predicting a potential slowdown in the face of Covid-related restrictions and rising global inflation. The local monetary authority has also been forced to follow the hawkish US Federal Reserve in a series of interest rate hikes.
“At this stage of the pandemic, every industry and business is greatly weakened,” said Perry Yiu, a policymaker for the tourism sector. “The tourism industry needs a timetable for a complete opening, otherwise we have no plan or preparation.”
—With Bei Hu’s help
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