Hong Kong’s decision to pursue a zero-Covid strategy and maintain some of the world’s strictest quarantine measures is hammering the city’s business reputation, the top lobby group for financial firms in the city said Monday.
The warning came as a survey showed almost half of major international banks and asset managers are considering moving staff out of the city as they struggle to retain employees or attract fresh talent.
Hong Kong has been kept comparatively free of the coronavirus thanks to strict travel curbs and up to 21 days of mandatory hotel quarantine for anyone arriving in the finance hub.
But there is growing frustration among businesses that there is no end in sight to the restrictions as officials make it clear opening up to the Chinese mainland must come before any easing of international travel curbs.
On Monday, the Asia Securities Industry and Financial Markets Association (ASIFMA) published a letter to Finance Secretary Paul Chan that warned Hong Kong was being left behind while rival financial centres such as London, New York, Paris, Singapore and Tokyo were learning to live with the coronavirus.
“Hong Kong’s status as an international financial centre is increasingly at risk along with its long-term economic recovery and competitiveness as a premier place to do business,” the letter warned.
ASIFMA said it had surveyed its members and found 93 percent said operations had been “moderately” or “significantly” impacted by the coronavirus restrictions.
Nearly three quarters complained they were having trouble retaining or attracting talent while nearly half said they were considering moving some staff and operations.
ASIFMA’s chief executive officer Mark Austen said major banks and financial firms were having a real issue with talent drain — with employees no longer willing to remain cut off from loved ones overseas.
“They’re seeing a huge amount of people leaving and they can’t replace them,” he told Bloomberg TV.
“Half of firms are contemplating that they need to move positions out of Hong Kong, and that’s really significant.”
The travel curbs come as Hong Kong is being remoulded in authoritarian China’s own image after huge and often violent democracy protests two years ago.
Earlier this month city leader Carrie Lam said the mainland was “more important” than international business and that even a single fatality from the coronavirus would be a “major concern”.
It is unclear whether Lam has any control over its immigration policy as officials have made clear Beijing will ultimately call the shots on when to reopen.
Recent attempts by Hong Kong to normalise travel with the mainland have made no concrete progress.
Meanwhile China, which also maintains strict curbs on overseas arrivals, has given no timetable for opening its borders.
Over the weekend the Financial Times, citing a Chinese government source, said Beijing planned to keep its borders largely closed until after a major Communist Party gathering in November 2022.