Hong Kong must reopen to the world before it is too late

Mike Rowse says we need to face the fact that global business could get on well without us

Hong Kong’s coronavirus chickens are coming home to roost. First-quarter GDP figures showing a year-on-year drop of 4 per cent were bad enough, but they could be a harbinger of weakness in the months ahead.

The tide is flowing against us. We need bold, decisive leadership to change the direction of the current. We must open up to the outside world quickly.

If that means a further delay in reopening the border with the mainland – something we have been pursuing for the best part of a year – that is a bullet we will have to bite. Our competitors are forging confidently ahead while we risk sleepwalking into economic irrelevance.

I will not restate the many missteps in our pandemic policies up to now. I and other commentators have practically beaten the subject to death. That is water under the bridge or, to put it another way, bodies in the morgue. But we have finally stumbled into a reasonably satisfactory position.

Our overall vaccination rate is almost 90 per cent, more than 80 per cent for the over 60s and even the octogenarians are at over 60 per cent and rising. These efforts must continue.

But one area where we remain weak is in international access, putting our stated objective of being a major aviation hub at serious long-term risk. The number of flights arriving at and departing from Hong Kong International Airport is running at abysmally low levels. Some international airlines have stopped servicing Hong Kong altogether. All the others – home carrier Cathay Pacific – have sharply curtailed their schedules.

It is no wonder. We actively deter leisure tourists and business visitors by insisting that even fully vaccinated passengers testing negative on arrival must spend a week in a quarantine hotel. Only the most desperate would consider such a custodial sentence, so most of those arriving are returning residents.

Moreover, the flight suspension arrangements whereby an airline can be banned from a route for a period of time depending on test results of its passengers makes no sense. It punishes airlines for matters largely beyond their control and disrupts the travel plans of passengers booked on subsequent flights.

The system should be scrapped. The quarantine system has to go, and as soon as we have absorbed the effects of that, the mask mandate must go, too.

Not surprisingly, passengers wishing to fly long haul with certainty in their travel arrangements on underserved routes are looking to other regional hubs. Surely we did not spend billions on a third runway just so we could be a feeder airport.

Hong Kong has been a major player in the world economy to the benefit of ourselves and the whole of China. But we need to face the fact that global business could get on well without us.

The situation on the mainland has similarities with Hong Kong but also major differences. One difference is at the policy level, with the mainland adopting

“dynamic clearing”. This means living life as normally as possible but clamping down hard whenever an outbreak occurs.

By contrast, Hong Kong has sought to achieve “zero Covid” on a pre-emptive basis. Masks have been required everywhere, with severe social-distancing measures such as the closure of bars, gyms, beaches and swimming pools and restricted opening hours for restaurants, and so on. Both strategies have their merits, but neither is perfect. The Omicron variant has exposed the weaknesses of both. In Hong Kong, we only really got to grips with the outbreak when we belatedly became much more proactive in pushing vaccination of the elderly and enforcing the vaccine pass.

The mainland had a relatively smooth 2021, with the economy continuing its strong growth and the momentum carrying over to the first quarter of this year. But when “clearing” required shutdown for most of Shanghai and now Beijing, the flaws and difficulties became apparent. Economic indicators have turned sharply lower and will no doubt be reflected in the second quarter GDP figures in due course.

Small wonder that China’s top expert on the subject, Zhong Nanshan, has started to question whether the policy is sustainable in the long term. However, his view has yet to gain much support at senior political levels.

Part of the problem, and the second major difference, is the sheer scale of the situation on the mainland. Hong Kong has endured about 9,000 deaths in a population of 7.5 million, which is unfortunate, but the potential numbers on the mainland are mind-boggling. Of the 264 million people aged over 60, more than 50 million are unvaccinated.

Moreover, the health systems are much less developed, especially in rural areas. Even a 2 per cent mortality rate would result in over a million deaths, which would be socially destabilising. This explains the caution against relaxation.

Given the size and diversity of the mainland economy, closing the country off from the outside world seemed a viable option, at least for a while. But time is up for this approach.

China has the world’s second-largest GDP and is an integral part of the global economy. Whereas the world could manage without Hong Kong if it had to – and if we were that foolish – it cannot manage without China. The case for a forceful vaccination drive is becoming overwhelming.

Our competitors are forging confidently ahead while we risk sleepwalking into economic irrelevance

Mike Rowse is the CEO of Treloar Enterprises