Hong Kong could solely reopen in early 2024 due to its stringent COVID-19 insurance policies, which may set off an exodus of overseas corporations and workers and jeopardise its function as a monetary hub, town’s European Chamber of Commerce mentioned in a draft report.
The restricted effectiveness of regionally developed vaccines is forcing mainland China to keep up tight restrictions on journey, the chamber mentioned within the draft, which was reviewed by Reuters however has not been made public.
The European Chamber of Commerce declined to touch upon the report.
The more than likely situation for Hong Kong can be that it could not reopen till China rolls out its mRNA vaccine throughout its 1.4 billion inhabitants, which may take till late 2023 or early 2024, it mentioned.
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If that was the case, the chamber mentioned there was a danger of a “cascade impact” of corporations leaving the Asian monetary hub.
“We anticipate an exodus of foreigners, most likely the most important than Hong Kong has ever seen, and one of many largest in absolute phrases from any metropolis within the area in latest historical past,” it mentioned.
Whereas Hong Kong has succeeded in preserving the virus below management for a lot of 2021, it has grow to be one of many world’s most remoted locations due to its journey restrictions and intermittent lockdowns which have accelerated a mind drain from the previous British colony.
Hong Kong noticed a surge of infections in January, which authorities have struggled to regulate.
Given the situation, multinational corporations would more and more relocate China-focused groups to the mainland or shift their Asian regional groups to Singapore or Seoul, the chamber mentioned.
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Hong Kong may lose its enchantment as a world enterprise hub in addition to its potential to contribute to China’s economic system.
The departure of worldwide expertise may additionally undermine town’s “potential to keep up world class universities”, it mentioned.
Sooner vaccines, Shorter quarantine
In contrast to the mainland, Hong Kong relies on enterprise travellers and imported items.
Its function as one of many world’s predominant transhipment and passenger hubs has been drastically curtailed by powerful flight restrictions, which imply only a few persons are allowed to land and hardly anybody is allowed to transit.
In distinction, the rival monetary hub of Singapore has eased its coronavirus curbs together with border controls.
Solely about 70% of individuals in Hong Kong have been double-vaccinated in contrast with 91% of Singapore’s eligible inhabitants.
Most of Hong Kong’s aged individuals haven’t been vaccinated.
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The chamber outlined different eventualities of “common chance” together with the opportunity of an uncontrolled outbreak within the mainland resulting in Hong Kong sealing its boundary with China and reopening with the remainder of the world.
One other situation was an uncontrolled outbreak in Hong Kong, which might make any extra restrictions meaningless. This might trigger as much as 20,000 deaths among the many aged.
The chamber made suggestions to the federal government together with accelerating vaccinations and shortening quarantine from 21 days to 7 to 14 days, which might please the worldwide enterprise group.
Overseas companies ought to assume that Hong Kong would very doubtless be “semi-closed for worldwide journey within the coming 12-36 months”. Expertise, and holding on to it, can be “a valuable commodity”, it mentioned.