Hong Kong’s fund managers have called on the government to reopen the city’s borders and warned of a “permanent” loss of talent even as Covid cases rose in the Chinese territory.
Sally Wong, chief executive of the Hong Kong Investment Funds Association, which represents global and local firms that oversee more than $52tn in assets under management, made the plea as the financial hub’s outgoing leader Carrie Lam said on Tuesday that she would “not budge” in the face of industry pressure.
Hong Kong has been tied to Beijing’s Covid-19 elimination policies since the start of the coronavirus pandemic, with incoming travellers subject to at least a week of hotel quarantine. Despite the restrictions, the city has recorded hundreds of cases a day, with 737 new infections recorded on Monday.
The policies have cut the city off from the rest of the world, sparking an exodus of residents and causing the economy to contract by 4 per cent in the first quarter compared with the same period last year. A net loss of about 130,000 residents was reported since the beginning of this year.
Wong issued the warning a day after the Hong Kong Monetary Authority, the city’s de facto central bank, revealed that 7 per cent of its staff had left in 2021, compared with the annual average of about 4 per cent.
Lam has prioritised unsealing the border with the mainland but Wong said reopening to the rest of the world was “of equal importance” to many global fund managers. Resuming quarantine-free travel with the mainland “could take more time”, she said.
“We should work in parallel. Why get boxed in by a sequential approach?” she told the Financial Times. “Can we be pragmatic?”
While international companies have long called for quarantine to be dropped, Wong’s comments signalled a shift from local business leaders, whose lobbying efforts had until recently been more restrained.
Betty Yuen, the new chair of the conservative Hong Kong General Chamber of Commerce, said last month that the city was becoming a “sequestered island” and that the government needed to offer a road map to reopening.
Wong also appealed to incoming leader John Lee, who will be sworn in as chief executive on July 1, to provide more “clarity and certainty” on the timeline for the resumption of quarantine-free travel. She added that “Hong Kong will increasingly be marginalised and be put in an uncompetitive position” if it remains isolated.
With the pandemic now in its third year, authorities have insisted that they cannot unilaterally open the international border, as it would undermine efforts to reinstate quarantine-free travel with mainland China.
Across the border, Beijing and Shanghai are battling outbreaks only days after lifting lockdown restrictions, highlighting the difficulty of achieving President Xi Jinping’s goal of zero-Covid.
The capital recorded 74 infections on Monday, the highest number in three weeks, after hundreds of cases were linked to a popular drinking venue. Primary and middle schools in Beijing have delayed plans to resume in-person classes, while affected districts have shuttered public venues such as restaurants and bars.
Shanghai’s case tally has also crept up after officials appeared to have squashed community transmission over two months of lockdown. But experts warned that infections would probably spread under the radar of China’s testing regime, causing a resurgence once the restrictions were lifted. The financial hub reported 17 cases on Monday.
Additional reporting by Maiqi Ding in Beijing and Eleanor Olcott in Taipei