Hong Kong may continue “zero covid” measures until 2024

Hong Kong may not reopen until early 2024 due to its strict Covid-19 policies, which could trigger an exodus of foreign firms and staff and damage its role as a financial hub, the city’s European Chamber of Commerce said in a draft report.

The limited effectiveness of locally developed vaccines is forcing mainland China to maintain tight restrictions on travel, the chamber said in the draft, which was reviewed by Reuters but has not been made public.

The most likely scenario for Hong Kong would be that it would not reopen until China rolls out its mRNA vaccine across its 1.4 billion population, which could take until late 2023 or early 2024, it said. If that was the case, the chamber said this runs the risk of a “cascade effect” of firms leaving the Asian financial hub.

“We anticipate an exodus of foreigners, probably the largest than Hong Kong has ever seen, and one of the largest in absolute terms from any city in the region in recent history,” it said.

Hong Kong has succeeded in keeping the virus under control for much of 2021, however it has become one of the world’s most isolated places because of its travel restrictions and snap lockdowns.

Hong Kong saw a surge of infections in January, which authorities have struggled to gain control of. Local sources have said this could lead to multinational firms relocating China-focused teams to the mainland or shift their Asian regional teams to Singapore or Seoul, the chamber said.

Hong Kong could lose its appeal as an international business hub as well as its potential to contribute to China’s economy. The departure of international talent could also undermine the city’s “potential to maintain world class universities,” it said.

Hong Kong is dependent on business travellers and imported goods. Its role as one of the world’s main shipment and passenger hubs has been drastically curtailed by tough flight restrictions, which mean very few people are allowed to land and transit opportunities are minimal.

In contrast, the rival financial hub of Singapore has eased its coronavirus restrictions, which include border controls. 70% of people in Hong Kong have been double-vaccinated compared with 91% of Singapore’s eligible population. Most of Hong Kong’s elderly people have not been vaccinated.