According to a government official, Hong Kong faces a difficult balancing act as the city looks to lift some border restrictions on international travelers starting next month.
The Chinese territory intends to ease a travel ban on flights from nine countries, including the US, Britain and Australia, and allow those travelers to quarantine in a hotel for seven days instead of 14. The changes will take effect on April 1st.
“It is very important that we have to cater to the needs of the international business people, but we also have a very large population in Hong Kong that needs the easing of the border restriction with mainland China, because it is also a very important part of Hong Kong for family reunions and corporations,” Bernard Chan, chairman of the executive board, told CNBC’s Squawk Box Asia on Monday.
“So it’s a very difficult balancing act,” he said, especially as China continues to experience cases of Covid outbreaks.
Hong Kong’s Executive Council is a cabinet-like body that advises the city’s chief executive.
China has been grappling with its worst Covid outbreak since early 2020, with local governments blaming the new omicron BA.2 variant for the current wave sweeping the country. The largest city, Shanghai, began a two-stage lockdown on Monday.
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Hong Kong, like mainland China, has firmly adhered to a “dynamic zero” coronavirus policy, trying to stamp out any outbreaks with sweeping restrictions and quarantines.
The city on Monday reported 7,685 new Covid infections and 168 deaths, according to official figures, as the recent wave of omicron infections continues to subside.
An average of 4,217.4 cases per day were reported between March 22 and 28, according to government data, down from the average of 8,704.4 cases per day reported over the previous 7 days.
Still, Hong Kong is lagging behind regional competitors – notably rival financial hub Singapore, which announced last Thursday that it would lift almost all border restrictions on vaccinated travelers from next month.
“As the rest of the world opens up, we must try to find a way out,” Chan said. “From April 1st we will start reducing the hotel quarantine period from 14 to 7 days. It’s obviously not good enough, but it’s still a big improvement,” he added.
Covid impacting business center status
According to a recent report by Hong Kong’s European Chamber of Commerce, the city’s zero-Covid strategy “comes at a very high cost to Hong Kong’s business community”.
The survey found that 49% of the companies surveyed are considering relocating all or part of their offices in the next 12 months.
In addition, existing restrictions have hampered corporate strategy or hiring plans for 2 out of 3 Hong Kong companies, the report added.
Acknowledging “these are difficult times” for Hong Kong, Chan said he remains hopeful the city will regain its status as a global business hub after the pandemic passes.
“I believe that Covid will be over. It’s a question of when it’s over,” he said. “Hong Kong is still very attractive as the center of the Greater Bay of China and the Chinese economy continues to grow. I think people will come back.”