Border closures threaten Hong Kong’s financial hub status

Manson Yim /

Last week, Hong Kong doubled down on its Covid-19 restrictions – already among the strictest in the world. The news has led to dismay among the city’s vibrant business community, with some questioning if this threatens its status as Asia’s financial hub.

The city’s leader, Carrie Lam, announced that almost all exemptions from quarantine for overseas and mainland travellers would now end.

She said this was to speed up China reopening to the region, but for some businesses, it’s pushing them over the edge. Ms Lam has previously said that opening to mainland China is “more important” than [opening up] elsewhere.

Hong Kong has one of the strictest mandatory quarantine regimes of any jurisdiction, with most arrivals having to undergo between 14 and 21 days of hotel quarantine.

There have been a few exemptions. Diplomats, business leaders and some mainlanders with Hong Kong resident cards have been able to skip quarantine, or isolate at home. But not any more.

“We are caught in a sort of dilemma because in order to resume some quarantine-free travel with the mainland we have to ensure our anti-Covid 19 practices are more in line with the mainland practices,”

Ms Lam told reporters on Tuesday.

The news has been met with dismay by Hong Kong’s business community, who have already felt the strain of more than 18 months of closed borders.

“It has a big impact in a wide variety of directions,” president of the American Chamber of Commerce in Hong Kong, Tara Joseph, tells the BBC.

“First, business sentiment about not being able to freely move about the world – which is crucial if you’re an international business.

“Secondly, the personal impact of being away from family and important personal contacts.

“And last but not least, it has a huge impact on the talent pipeline for Hong Kong which means its domination as Asia’s hub could lessen over time. We have no pipeline anymore, that’s really worrying.”

Frederik Gollob, Chairman of the European Chamber of Commerce agrees:

“It certainly won’t enhance confidence in Hong Kong to do business from an international business perspective.”

Business confidence in the city has already been hit in recent years, thanks to widespread pro-democracy protests, as well as the imposition of the controversial National Security Law which mandates harsh prison terms and can also impact foreigners.