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Opinion | Why Hong Kong’s full reopening will be in China’s best interests
- While Hong Kong keeps chasing the goal of ‘zero Covid’, its peers and competitors are moving on and normalising economic activity
- Fully reopening is more urgent and more feasible than ever, and doing so will be to both Hong Kong and China’s great benefit
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Hong Kong is still in its labyrinth of Covid-19 restrictions as the world moves forward, though it is no longer 2020 and the whole world is not under lockdown. Now, its regional peers are moving swiftly towards normalising economic activities.
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With the high economic stress and low mortality rate from Covid-19, it is not only more urgent but also more feasible than ever for Hong Kong to fully reopen. The “3+4” scheme was an encouraging step, but nothing will change as long as inbound quarantine requirements remain in place. Compulsory tests and the health code system have also eroded Hong Kong’s attractiveness, quality of living and competitiveness.
Many have already discussed the obvious benefits of Hong Kong reopening fully. Since Hong Kong’s long-standing role is linking China and the West, this is also in the best economic interests of China.
Beijing’s mandate for Hong Kong is to retain its status as an international financial, trade and logistics centre while accelerating innovation and technological development. The key word here is international – the core value that defines Hong Kong. Yet, the current policy is not only counterintuitive but keeps Hong Kong from realising its full potential.
Given its special role, Hong Kong can keep its flexibility and adopt policies that are different from the rest of China, and handling the pandemic should be no exception. As a small and open economy, there is only so much Hong Kong can endure as much of its economic activity comes from cross-border interactions. From finance to tourism, these pillar industries are important for Hong Kong’s economic growth and employment.
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Stresses have also become apparent as economic pressure begins to bite tax revenue. With the unsustainable pandemic-related spending and stimulus, Hong Kong will feel the heat of a widening fiscal deficit, with negative consequences for long-term government resource allocation.
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