Due to its stringent Covid policies, Hong Kong may not reopen until 2024, which could lead many foreign businesses and staff to leave, threatening its role as a financial hub, says a draft report by the European Chamber of Commerce.
Mainland China has had to continue tight travel restrictions due to the limited efficacy of locally developed vaccines, according to the Chamber’s draft report viewed by Reuters news agency.
As such, the most probable scenario for Hong Kong would be that it won’t reopen until China launches its mRNA vaccine to the population, which may not happen until the end of next year or beginning of 2024.
Therefore, the Chamber believes there is a risk of a "cascade effect" of businesses leaving Hong Kong.
"We anticipate an exodus of foreigners, probably the largest that Hong Kong has ever seen, and one of the largest in absolute terms from any city in the region in recent history," the report stated.
Despite controlling the virus for most of last year, the travel curbs and lockdowns have made Hong Kong one of the most isolated places in the world.
As a result, the report said that a rising number of multinational companies would relocate teams to Mainland China or elsewhere in Asia such as Singapore or Seoul. This would risk Hong Kong losing its influence as a global business hub. The exit of international talent may also weaken the city's "potential to maintain world class universities", it said.
Foreign firms should work on the assumption that Hong Kong would highly likely be "semi-closed for international travel in the coming 12-36 months". As such, retaining talent would be "a precious commodity", the report went on to say.
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