Hong Kong risks global financial situation as a result of Covid isolation
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Over the past two months, business and financial circles have been sharper criticized for Hong Kong government policy than in the past two years of political and social unrest.
Along with a slowdown in Covid-19 vaccines that do not determine a plan to get out of the pandemic, it has finally ignited a fire under the territory’s bankers.
Hong Kong’s financial services sector has been gilded, contributing more than a fifth of the territory’s gross domestic product each year. About 70 of the world’s 100 largest banks have operations in the Chinese city, and so far Beijing’s tightening effects in Hong Kong have been largely protected.
Now the bankers are rebelling. It has been just over 100 days since Hong Kong began vaccinating and about 17 percent of adults – and less than 5% of those over 70 – have come to play. That’s half as much as London and Singapore.
The desperate vaccination program, which has been hampered by the government’s high distrust, has dashed expectations of international travel to Hong Kong, probably until next year. The border remains closed to foreign visitors and has created a de facto blockade for residents who return to quarantine sentences in a two- or three-week hotel for the second year in a row.
Although the government is working to improve vaccine rates, it has not yet linked the plan to a strategy to reopen the borders. This has led to fears that the city will be left behind when Europe and the US reopen this summer due to its reputation as a global financial center.
“We’re effectively expressing that we’re closed to business,” a banker at Wall Street in Hong Kong said this week. “Hong Kong’s position as a major financial center is questionable.”
Frederik Gollob, president of the European Chamber of Commerce in the territory, said the quarantine rules mean “Hong Kong may lose competitiveness to attract the greatest talent,” and that people are already “definitely” in favor.
As well as HSBC previously burned Expressing his opinion on Hong Kong policy, he called on the government to “take care of public health and allow business travel to gradually return to normal”.
Out of the pandemic, Hong Kong has stumbled upon a compelling experiment: how long can an international financial center last without a foreign trip? How long will it take for its large foreign community to be able to go abroad? How long can airlines and hotels cope without business travel or tourism? The government has not yet determined a timeline that would allow these businesses and people to plan.
Hong Kong CEO Carrie Lam has said she will not “sacrifice the security of the people of Hong Kong to push for the reopening of borders.” But like other places where the virus was successfully crushed (Hong Kong has only killed 210 people in its 7.5m population), the territory is in danger of being trapped in a purgatory of small outbreaks and extreme restrictions. The proposed travel corridor with Singapore has been delayed twice as the number of cases has risen.
They were managers of the largest international banks in Hong Kong briefly excited last week when the government announced that a maximum of four executives in a company could fly a month without being quarantined. The small print has softened the feeling. He revealed that they would have to return to quarantine at the end of each day. “It’s like a prisoner’s day release,” said David Webb, a senior investment activist.
For now, Hong Kong has eagerly revived its inoculation campaign. Local newspapers are dressed in advertisements. They have boosted businesses do his part. Vaccine reserves are rising.
Yet businesses are still confused with the Hong Kong goal. Will the world reopen before the business centers of Asian companies like Singapore, or open the border to mainland China? If the latter were, Hong Kong would be under Beijing’s command because of its chronology of reopening to international travel. This would surely lead to a longer delay if the decision on the trip had been made only for Hong Kong.
Hong Kong has only so far accepted trips without quarantine For government officials and executives of major Chinese companies on the mainland like Tencent and Alibaba. For some of the international financial community, it is a sign that Hong Kong has accepted its fate as China’s global financial center, which is at risk of becoming overly dependent on Chinese capital.
tabby.kinder@ft.com
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