Hong Kong group warns long road ahead after Covid shift

Bloomberg

One of Hong Kong’s top foreign business groups warned the city still faces challenges in trying to revive its reputation as a global financial hub, even after it ditched almost all of its Covid curbs.
In a sweeping overhaul of policies, residents and travellers alike will find their lives a bit easier. People coming into the city won’t have to fill in a health declaration or take PCR tests after they arrive. Venues like restaurants won’t have capacity limits and will no longer require proof of vaccination for entry, while close contacts of Covid-positive people don’t have to quarantine any more.
Chief Executive John Lee says the city has been preparing for the changes for six months. And while the timing has puzzled some in the hub — the border with mainland China will soon reopen even as the latter struggles with a record wave of infections after abandoning Covid Zero — health experts say any influx in visitors is unlikely to overwhelm Hong Kong’s healthcare system.
But even as the Covid-rule changes put Hong Kong’s battered economy on track to rebound over the course of 2023, there’s uncertainty around when the benefits will start to flow as it’ll take time for travel to recover.
At least one major foreign business group has warned the city has a long road ahead to assure international investors of its attractiveness.
“We welcome the measures. Again a great step forward in the right direction,” said Inaki Amate, chairman of the European Chamber of Commerce in Hong Kong, adding the city now just needs to remove a small number of rules like its mask mandate. “Opening was the first step, but the hard work starts now to regain the trust from the rest of the world.”
The dismantling of Covid measures tells the world that “Hong Kong is very normal now,” Lee said as he announced the changes.
While the rest of the world pivoted to living with the virus, both Hong Kong and mainland China remained notable outliers in their zero-tolerance approach throughout 2022.
Hong Kong has long been an important gateway between mainland China and the rest of the world. In 2018 — before Covid and before the pro-democracy protests that rocked the financial hub — mainland China accounted for about 76% of the city’s total visitors.
Weakening prospects for global growth, ongoing Covid uncertainty and geopolitical tensions will likely remain risks for Hong Kong’s outlook, said Thomas Shik, chief economist at Hang Seng Bank Ltd, who expects the economy to grow 2.5% next year after a 3% contraction this year.