There has been open criticism of the Hong Kong government’s policy from the business and financial circles in the past two months over two years of political and social turmoil.
The slow rollout of a Covid-19 vaccine, along with the failure to outline an exit plan for the pandemic, has finally set fire to the county’s banker’s shadow.
Hong Kong’s financial services sector is in an astonishing position, contributing more than a fifth of the territory’s total GDP each year. About 70 of the world’s 100 largest banks have operations in the Chinese city, and they have so far been shielded from the consequences of Beijing’s tightening grip on Hong Kong.
Now the bankers are revolting. It’s been just over 100 days since Hong Kong began rolling out vaccinations, and only 17 per cent of adults – and less than 5 per cent of people over 70 – have applied for vaccinations. This is half of what it is in London and Singapore.
A disappointing vaccination programme, hampered in part by widespread mistrust in the government, has dashed hopes of people’s international travel in Hong Kong, possibly until next year. Borders remain closed to foreign visitors, and a two- or three-week hotel quarantine for returning residents has led to a de facto lockdown now entering its second year.
Although the government is striving to improve vaccine rates, it has not linked its plan for this to the strategy of reopening borders. This has led to fears that the city will be left behind when Europe and the United States open their doors this summer, at a time pivotal to its reputation as a global financial centre.
“We are effectively signaling that we are closed to business,” a Wall Street banker in Hong Kong said this week. “Hong Kong’s status as an important financial center is called into question.”
Frederic Golub, head of the territory’s European Chamber of Commerce, said the quarantine rules meant “Hong Kong could lose its competitive advantage to attract top talent”, and that people were already leaving “forever”.
Even HSBC, which was burned before Expressing an opinion on Hong Kong’s policy, he urged the government that “protecting public health and allowing business travel to gradually return to normal can coexist.”
Cocooning itself from the pandemic, Hong Kong has stumbled upon a compelling experiment: How long can an international financial center survive without traveling abroad? How long will the large expat community last with the inability to travel abroad? How long can airlines and hotels deal without traveling for business or tourism? The government has not yet set a timeline that will allow these companies and individuals to plan ahead.
Hong Kong Chief Executive Carrie Lam said she would not “sacrific the safety of Hong Kong residents just to rush the reopening of borders”. But like other places that have successfully quelled the virus (Hong Kong has recorded just 210 deaths out of a population of 7.5 million), the region is now at risk of falling into a sanitizer of small outbreaks and severe restrictions. A proposed travel corridor with Singapore has been postponed twice due to the high number of cases.
Managers were at the largest international banks in Hong Kong as well excited for a while Last week when the government announced that up to four company executives could travel each month without having to be quarantined. The small print has dampened sentiments ever since. She revealed that they will have to return to quarantine at the end of each day of meetings. “It’s like prisoner release day,” said David Webb, a prominent activist investor.
For now, Hong Kong has enthusiastically revived the vaccination campaign. Local newspapers were plastered with advertisements. Companies are encouraged to do their part. Vaccine reservations are on the rise.
However, companies are still confused about Hong Kong’s target. Will it reopen to the world before competing Asian business hubs like Singapore, or to open the border with China? If the latter, Hong Kong will be at Beijing’s request for its schedule to reopen international travel. This would likely mean a much longer delay than if the decision to travel to Hong Kong had been made alone.
Hong Kong has only so far Certified Quarantine-Free Travel For government officials and CEOs of major Chinese companies such as Tencent and Alibaba. For some in the international financial community, this is a sign that Hong Kong has accepted its fate as a global financial center for China at risk of over-reliance on Chinese capital.