HongKong’s leader ‘exploring’ easing of controversial COVID curbs | Business and Economy

Hong Kong is “actively exploring” changes to strict COVID-19 curbs that have ravaged the economy and driven talent out of the financial hub, with authorities hoping to make an announcement soon, the city leader said.

Hong Kong Chief Executive John Lee said Tuesday his government intends to make an announcement soon about the city’s controversial hotel quarantine policy amid mounting frustration at the Chinese territory’s deteriorating image as a place to live and do business.

Lee, who has pledged to revitalize Hong Kong’s ailing international status since taking office in July, said his government is aware of the need to ensure “good connectivity” with the rest of the world.

“We know exactly where we should be going and we want to be consistent as we move in that direction. We’d like an orderly opening,” Lee told reporters, cautioning against any move that could lead to “chaos or confusion.”

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Lee’s comments come days after organizers of the Hong Kong Marathon and World Dragon Boat Racing Championships, two of the biggest events on the sporting calendar, announced the events would be canceled and relocated to Thailand due to the city’s pandemic rules.

Hong Kong is one of the few places on earth that still adheres to strict pandemic controls as authorities seek to join mainland China’s draconian “zero-COVID” policy, which aims to eradicate the virus at almost any cost .

Under current regulations, all arrivals must undergo a three-day hotel quarantine, followed by a four-day medical surveillance during which they are prohibited from entering venues such as bars and restaurants.

Arrivals had to undergo a seven-day hotel quarantine until last month and were previously limited to 21 days at a hotel.

Local media previously reported that authorities are considering replacing hotel quarantine entirely with seven-day medical surveillance, which would still severely restrict arrivals’ movements in the city.

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The South China Morning Post newspaper reported on Tuesday, citing anonymous sources, that Lee and his cabinet had reached a consensus to scrap hotel quarantine at a later date.

Alongside a Beijing-led crackdown on dissidents that has gutted rights and freedoms in the former British colony, the COVID restrictions – which also include mask mandates, a Chinese-style health code system and restrictions on public gatherings – have prompted a mass exodus of residents.

More than 200,000 people left Hong Kong, which bills itself as “Asia’s world city,” between 2020 and mid-2022, and more are expected to follow.

Hong Kong entered its second recession in three years in the second quarter, with gross domestic product (GDP) contracting 1.4 percent after contracting 3.9 percent in the January-March period. On Monday, Finance Minister Paul Chan said the city’s fiscal position was worse than expected and forecast a deficit of up to HK$100 billion (US$12.7 billion) this year, the second-worst on record.

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Gary Ng, chief economist at Natixis in Hong Kong, said Hong Kong’s phased approach to reopening will not be enough to restore the city’s declining competitiveness.

“Everything is relative. Switching from the so-called ‘3+4’ scheme to ‘0+7’ will help little as the divergence with regional competitors like Singapore is still extremely large,” Ng told Al Jazeera.

“It’s not just about border controls, but also about domestic rules. Mandatory testing and health regulations are the main factors that bring uncertainty and dampen Hong Kong’s attractiveness and quality of life. It is an urgent task for the Hong Kong government to overcome COVID for their economy immediately.”

Ng said the policy is also putting pressure on the city’s finances in the form of “unsustainable” COVID-related spending.

“Nobody benefits from the current policy,” he said.

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