Reopening mainland border won’t fix Hong Kong’s economy on its own

The long-awaited clearance for quarantine-free travel has finally arrived. But what price has Hong Kong paid for closing its borders? According to some estimates, the potential growth loss suffered by the Hong Kong economy could be as high as US$27 billion as a result of the strict pandemic control measures.

Before the border closed in early 2020, land passenger traffic between Hong Kong and the mainland exceeded 236 million trips in 2019. Those flows shrank to negligible levels once the border was shut.

Hong Kong is an export-oriented economy which relies heavily on international trade. One result of the city’s borders being closed for nearly three years is that many local businesses have struggled to stay afloat while facing years of unprecedented challenges. Many have failed to cope with the pandemic and folded as a result.

Many top-tier commercial activities have been seized by neighbouring cities, while a good number of producers on the mainland have moved manufacturing processes to various Southeast Asian countries. The lack of international trade, business travellers and tourists has left Hong Kong almost unrecognisable.

Mong Kok and Causeway Bay, once bustling and crowded, have seen few tourists in the past three years. Even though the border has now started to reopen, the local hotel and catering industries are struggling to restore staffing levels as many former employees were forced to look for jobs in other industries to survive during the pandemic. The situation is definitely not satisfactory.

By 8pm on the first day of the mainland border reopening, some 45,000 people had crossed by land, with twice as many travelling to the mainland than in the opposite direction. The percentage of people taking the opportunity to travel north shows how much reopening means to Hongkongers.