Hong Kong
CNN
—
At a glitzy financial summit in Hong Kong this week, city leaders triumphantly told a room full of Wall Street executives that the Asian hub was back in business. he declared.
Two days later, tens of thousands of rugby fans were forced to leave the country after political unrest since 2019 and then Covid-19.
Two high-profile international events sent a clear message. After nearly three years of border closures, mandatory quarantines, and restrictions on business and social gatherings, Hong Kong has finally reopened.
For much of the pandemic, China’s semi-autonomous city maintained some of the region’s toughest restrictions, including one of the world’s longest mandatory quarantines for international arrivals. As fears grew that Hong Kong was being left behind, the government finally opened the city’s doors in September, ending a formal quarantine and saving millions.
At Wednesday’s summit attended by more than 200 investors from 20 countries, Hong Kong leader John Lee said, “We were, were and will continue to be one of the world’s leading financial centers. I will continue,” he vowed. “You can take it to the bank.”
Hong Kong Rugby Union CEO Robbie McBee, speaking Friday ahead of the kick-off of the Sevens, described the tournament’s revival as a “catalyst, a watershed” and “Hong Kong remains a vibrant and resilient city.” was welcomed as a symbol of
But experts warn that the move to revive Hong Kong has been welcomed and, though long overdue, faces many challenges.
The isolation over the past few years, matched by the ongoing political crackdown, has taken its toll, they said. is unlike the city the world knew before the pandemic, and the true impact of its changes is yet to be seen.
Last year, as many destinations reopened to tourists and restrictions eased, Hong Kong seemed stuck in an alternate reality.
Restaurants, bars and gyms were frequently forced to close or have limited hours. Housing was blocked for several days. At one point, public gatherings were limited to two of him. And most residents didn’t leave the city for years and were either unable or unwilling to spend up to three weeks in hotel quarantine at their own expense upon their return.
The company was hit hard. “There have been three years of downsizing and cutbacks,” he said, as the sevens tournament accounts for his 95% of the Hong Kong Rugby Union’s revenue.
Many disillusioned residents chose to leave for good. During his year, the city recorded its steepest population decline since records began in his 1961. Businesses have also started to look elsewhere, especially Hong Kong’s longtime regional rival Singapore.
But Hong Kong authorities are eager to reopen the border with mainland China, which has yet to show any signs of easing its strict zero-Covid policy aimed at eradicating the infection.
Then a severe outbreak caused by a highly contagious Omicron variant earlier in the year ended Hong Kong’s hopes of maintaining zero daily infections.
Amid mounting public pressure, the government lifted flight bans in certain countries in March and shortened hotel quarantines, but these small concessions have done little to lure people back.
According to media reports in August, some Wall Street banks will only allow travel on Wednesday if there is quarantine-free travel, a widely speculated factor behind the government’s final decision to abolish quarantines. He warned that executives would attend the financial summit.
The news caused financial leaders in the city to breathe a sigh of relief.
“We have been closed for too long. And this is a clear demonstration that Hong Kong is back.”
Alicia Garcia Herrero, chief Asia-Pacific economist at French investment bank Natixis, agreed that two big events this week were “a big sign of Hong Kong moving away from coronavirus restrictions and into a new world.” .
However, the remaining restrictions pose a competitive disadvantage.
International visitors are required to undergo Covid testing for seven consecutive days upon arrival in Hong Kong and are prohibited from entering restaurants, bars and gyms for the first three days. But the tests don’t stop there. Bars and clubs that do not serve food require proof of a rapid negative antigen test from all patrons.
While indoor and outdoor mask mandates are in effect, photos of the financial summit show attendees sitting at tables without face coverings. They included city finance secretary Paul Chan, who was declared a “recovered case” by health officials after testing positive for Covid when he arrived from overseas travel on Tuesday.
These rules “still largely ban the overseas travel market,” said McLoughby, Hong Kong’s rugby chief. Before the pandemic, about half of Sevens fans were from abroad. This year, he said, the number is “very small.”
Long periods of isolation and financial hardship have created challenges for companies hoping to revive. Over the past few years, many people have left the sports and events sector in search of more stable jobs, leaving the industry understaffed, he added.
Vera Yuen, an economics lecturer at the University of Hong Kong, said the partial reopening had plunged Hong Kong into a nasty coronavirus chaos.
“If you want to open the border with mainland China, our restrictions are too loose… so it’s not allowed,” she said. “But if we want to open ourselves up to the world, we are still too strict. We are currently in the middle, hoping to see better policies in the future.” she said.
Others warn of a growing political challenge. “Clouds are certainly coming to Hong Kong from different angles,” banker Garcia Herrero said, pointing to Western reactions to the broad national security laws Beijing imposed on Hong Kong in 2020. .
Under the law, pro-democracy activists were imprisoned or deported, independent newsrooms were closed, and former lawmakers were targeted. Meanwhile, authorities are changing school curricula to emphasize Chinese history and culture and promoting economic cooperation in the Greater Bay Area, a national plan to more closely link Guangdong province in southern China with Hong Kong and Macau. .
The law has been widely criticized by foreign governments and human rights groups, and the United States has sanctioned Li and other senior Hong Kong officials for their role in the crackdown. Hong Kong authorities have repeatedly claimed that the law restored order and stability after the 2019 anti-government and pro-democracy protests in Hong Kong.
For the United States and the European Union, national security laws and crackdowns represent “a change in the agreed-upon rules of the game,” Garcia Herrero said.
These escalating tensions could pose problems for Hong Kong’s trade and diplomatic relations with other countries. Hong Kong has long been seen as the gateway between the mainland and the West, given more freedom than any other city in China. Hong Kong’s position looks increasingly precarious as civil liberties are eroded.
“Western countries will now understand that Hong Kong is not only part of China, but closer to China than before,” said Yuen, an economics lecturer. “The worst-case scenario is that the West treats Hong Kong like it treats mainland China, and Hong Kong is subject to sanctions.”
And this close relationship is likely to continue in the future. To stem the brain drain, the government is spending her HK$30 billion ($3.8 billion) to attract global companies and new talent. Escape the more dire job market across borders.
Despite these geopolitical frictions, some argue that Hong Kong’s natural advantages will allow a revival, even if the city is headed in a different direction than it used to be.
Few other financial centers in Asia can match Hong Kong’s open regulatory environment, low payroll tax and existing financial infrastructure. Garcia Herrero said.
Yuen agreed, saying the city’s proximity to China remains attractive to companies and investors wishing to tap into the vast and lucrative mainland market.
“We are connected to China, we have a little bit of autonomy, and we are able to maintain our status as different from them given their different Covid policies and governance,” she said.
But as both experts acknowledged, the road ahead will bring new risks. International companies may come to Hong Kong, but they should be cautious about the amount of investment in Hong Kong, bearing in mind the threat of US sanctions and regional disputes.
Today, Hong Kong is increasingly under Beijing’s control, and as President Xi Jinping enters his third term in office, China is increasingly assertive and surrounded by supporters on the world stage. These rising tensions between China and its rivals are causing inequality to widen “as the world deglobalizes,” Garcia Herrero said.
“In my opinion, Hong Kong will never be what it used to be, in terms of being open to both the West and the East,” she said.
