Hong Kong might only reopen in early 2024 because of its stringent COVID-19 policies, which could trigger an exodus of foreign firms and staff, and jeopardize its role as a financial hub, the territory’s European Chamber of Commerce said in a draft report.
The limited effectiveness of locally developed vaccines is forcing 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 European Chamber of Commerce declined to comment on the report.
Photo: Bloomberg
The most likely scenario for Hong Kong would be that it would not reopen until China rolls out its messenger RNA (mRNA) vaccine across its 1.4 billion population, which could take until late next year or early 2024, it said.
If that was the case, the chamber said there was a risk of a “cascade effect” of firms leaving Hong Kong.
“We anticipate an exodus of foreigners, probably the largest than [sic] Hong Kong has ever seen, and one of the largest in absolute terms from any city in the region in recent history,” it said.
While Hong Kong has succeeded in keeping the virus under control for much of last year, it has become one of the world’s most isolated places because of its travel restrictions and intermittent lockdowns that have accelerated a brain drain from the former British colony.
Hong Kong saw a surge of infections this month, which authorities have struggled to control.
Given the scenario, multinational firms would increasingly relocate 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 territory’s “potential to maintain world-class universities,” it said.
Unlike China, Hong Kong is dependent on business travelers and imported goods.
Its role as one of the world’s main transshipment and passenger hubs has been drastically curtailed by tough flight restrictions, which mean very few people are allowed to land and hardly anyone is allowed to transit.
In contrast, the rival financial hub of Singapore has eased its coronavirus curbs including border controls.
Only about 70 percent of people in Hong Kong have been double-vaccinated, compared with 91 percent of Singapore’s eligible population.
Most of Hong Kong’s elderly people have not been vaccinated.
The chamber outlined other scenarios of “average likelihood” including the possibility of an uncontrolled outbreak in the mainland leading to Hong Kong sealing its boundary with China and reopening with the rest of the world.
Another scenario was an uncontrolled outbreak in Hong Kong, which would make any additional restrictions meaningless. This could cause up to 20,000 deaths among elderly people.
The chamber made recommendations to the government, including accelerating vaccinations and shortening quarantine from 21 days to seven to 14 days, which would please the international business community.
Foreign businesses should assume that Hong Kong would very likely be “semi-closed for international travel in the coming 12-36 months,” it said.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
RSS