HONG KONG – Hong Kong may not reopen until early 2024 due to its strict Covid-19 guidelines, which could trigger an exodus of foreign firms and employees and threaten its role as a financial hub, the city’s European Chamber of Commerce said in a draft report.
The limited effectiveness of locally developed vaccines is forcing mainland China to maintain strict travel restrictions, the chamber said in the draft, which was reviewed but not released by Reuters.
The European Chamber of Commerce declined to comment on the report.
The most likely scenario for Hong Kong would be that it would not reopen until China rolls out its mRNA vaccine for its 1.4 billion people, which could be late 2023 or early 2024, it said.
Should this be the case, according to the Chamber, there is a risk of a “cascade effect” of companies leaving the Asian financial center.
“We anticipate an exodus of foreigners, probably the largest Hong Kong has ever seen and one of the largest in absolute terms from any city in the region in recent history,” it said.
While Hong Kong has managed to keep the virus under control for much of 2021, it has become one of the most isolated places in the world due to its travel restrictions and temporary lockdowns, which have accelerated the brain drain from the former British colony.
Hong Kong saw a spate of infections in January that authorities struggled to contain.
Given the scenario, multinationals would increasingly relocate their China-focused teams to the mainland or relocate their Asian regional teams to Singapore or Seoul, the chamber said.
Hong Kong could lose its attractiveness as an international business center and its potential to contribute to the Chinese economy.
The brain drain of international talent could also undermine the city’s “potential to host world-class universities,” it said. REUTERS