Financial sector group steps up pressure on Hong Kong to abandon Covid-zero policy, relax restrictions, East Asia News


HONG KONG (REUTERS, BLOOMBERG) – A financial sector group is stepping up pressure on Hong Kong to relax its strict quarantine rules and abandon its Covid-zero policy, warning Monday, Oct. 25 that strict quarantine requirements for international travelers threaten to undermine the city’s status as a financial hub.

The Asia Securities Industry and Financial Markets Association (Asifma) said a survey of its members, including some of the world’s largest banks and asset managers, showed that 48% were considering moving staff or duties away from Hong Kong due to operational issues including uncertainty. regarding when and how travel and quarantine restrictions will be lifted.

Hong Kong has some of the toughest travel restrictions in the world and is virtually Covid-19 free, but unlike regional rival Singapore, which is slowly reopening its borders, the Chinese-ruled city has no public plans to make it happen. open to international travelers.

Local leaders say their goal is to remove restrictions on travel from Hong Kong to mainland China, which also has strict entry restrictions. At present, travelers from Hong Kong to the mainland must still be quarantined.

“The rest of the world is changing and Hong Kong does not articulate a plan that gives individuals the certainty they need,” said Mr. Mark Austen, CEO of Asifma, in an open letter to Hong Kong’s financial secretary, Paul. Chan.

“Some companies are moving their activities, it is not huge at the moment. The longer it lasts, the more difficult it is for companies to maintain these positions in Hong Kong.”

“Hong Kong’s status as an (international financial center) is increasingly threatened, as well as its long-term economic recovery and its competitiveness as the first place to do business,” he added.

In responses from 30 of its members, Asifma found that around 90% said operations in Hong Kong had been “moderately” or “significantly” affected. Almost three-quarters of predominantly international companies have difficulty attracting and retaining talent, with a third facing “significant” challenges.

The letter made a series of recommendations, including the publication of “a roadmap to get out of the Covid-19 strategy based on Hong Kong’s” zero cases “beyond the sole immediate objective of opening the borders with the China ”, as well as the prioritization of vaccinations.

While acknowledging the challenges facing businesses, Hong Kong Managing Director Carrie Lam said in an interview earlier this month that even a single death would be a “major concern” and that opening up to a more China. large would also benefit the city’s businesses since most are in Hong Kong to access the mainland.

Ms Lam also said Hong Kong was doing “very well” as a financial center while calling the mainland “more important” than international affairs.

Hong Kong has reported just over 12,300 cases since the start of the pandemic, most of them imported, and 213 deaths.

In the letter, Asifma praised the city’s success in suppressing the virus and welcomed an economic recovery which is expected to see gross domestic product increase by 6.5% this year, but expressed concern over its long-term economic situation.

The international financial services sector contributes about 21 percent of the city’s economic output, according to the group. A deterioration in Hong Kong’s international status would also undermine China’s long-term interests and its willingness to open up its capital markets, Austen said in the letter.

The association called for an easing of restrictions on travel along major corridors to the United States, Europe and the United Kingdom, where there are many multinational headquarters. He urged the city to set a clear timeline for the opening and detail intermediate goals and targets.

The city is expected to phase out restrictions, including the 21-day quarantine, the group said. Other recommendations included limiting the definition of close contact for imported cases, a sustained focus on prioritizing the immunization of Hong Kong’s most vulnerable and accepting that “living with Covid” will ultimately be necessary.

Global lenders are accelerating the relocation of bankers from Hong Kong to China, in part spurred by the strict quarantine strategy, the bankers said earlier.

Strict rules require Hong Kong-based bankers to book two to three months for a single trip to the mainland and limit themselves to three trips to China per year to avoid breaking a 183-day stay rule that would make it one. resident and are hit with a higher tax rate than what they pay in Hong Kong, they said.

China is now warning that new infections will increase in the coming days after a recent outbreak. The spread of the Delta variant has spread to 11 provinces, further reducing the prospects of reopening the border with Hong Kong in the near term.

Regional rival Singapore is expanding non-quarantine travel to nearly a dozen countries, but authorities are wondering how to do it while avoiding a surge of Covid-19 cases among the elderly and those with weakened immune systems.

Hong Kong has struggled with the reluctance of its elderly residents, in particular, to get vaccinated. Just under 60% of Hong Kong’s population has been fully vaccinated against Covid-19, compared to over 80% for Singapore.

“The government must do everything possible to foster informed dialogue and full consideration of long-term risks to livelihoods if its borders remain effectively closed, unlike competing international financial and trade centers,” Mr. Austen.

“A clear and well communicated opening schedule can in itself serve as a catalyst for the unvaccinated to get vaccinated.”

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