Hong Kong needs to allow free travel to retain financial hub status – report

4:32 am Tuesday, July 12th, 2022

By Scott Murdoch

HONG KONG (Reuters) -Hong Kong needs to allow financial sector employees to travel freely to retain its global investment and banking hub status, an industry report said, as the city continues to maintain some of the strictest coronavirus regulations in the world.

“It is critical that a delicate balance is struck giving proper recognition to Hong Kong’s stature as an international financial centre and broader local public health considerations,” said the report from the Alternative Investment Management Association (AIMA) and PwC released on Tuesday.

Quarantine rules and flight bans have meant business travel to Hong Kong has flatlined and global bank chiefs have mostly avoided travelling to the city since 2020, even while visiting rival regional financial hub Singapore in recent months.

The Chinese special administrative region is the largest hedge fund centre in Asia, the report said, with more than half of the major funds that have at least $1 billion under management in the region located in Hong Kong.

Phillip Meyer, AIMA Hong Kong executive committee chair, urged policymakers to listen to the message “coming from every corner of every business sector.”

Travel restrictions and border closures have led to an exodus of residents during the last two years, with the financial services sector facing a ‘brain drain’ of talent.

A net 140,000 people have left since the start of this year, official data shows. It is unclear how many have left temporarily or permanently.

“The worst case is if in 12 months we are where we are today, then I think there’s some real challenges. Some business and people who have continued to be committed to Hong Kong may need to move,” Meyer said.

Hong Kong has reported more than 1.2 million coronavirus infections and around 9,400 deaths.

While the city has escaped the death tolls of other major centres, Hong Kong is one of only a handful of cities left to still implement quarantine with inbound travellers required to spend seven days in a designated hotel at their own cost.

A rule that banned individual flights for bringing in passengers infected with the COVID-19 virus was relaxed last week after the city’s government said the ban caused “unnecessary trouble” and inconvenience to residents.

(Reporting by Scott Murdoch, additional reporting: Farah Master; Editing by Sumeet Chatterjee & Simon Cameron-Moore)