Hong Kong relaxes Covid quarantine rules for visitors from mainland China

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Hong Kong will allow people from mainland China to visit without having to face its quarantine procedures in the city’s first serious relaxation of its strict Covid-19 entry requirements for tourists.

But critics of the Hong Kong government’s quarantine policies, which will begin on September 15, said it was another sign the Asian financial centre was prioritising a travel bubble with mainland China over the international links important to executives living in the city.

Under the plan, up to 2,000 non-Hong Kong residents from the mainland and Macau will be allowed to enter the territory each day without having to undergo quarantine, said Carrie Lam, the city’s leader. However, visitors will still be subject to a hotel quarantine on their return to mainland China.

Companies welcomed the move but financial executives said they were still awaiting a broader reopening plan in which Beijing would provide a reciprocal exemption from its quarantine requirements.

The share prices of retailers such as jewellers and beauty brands rallied on Tuesday on hopes that the relaxed quarantine rules would boost the local economy.

Travellers from the mainland have historically made up the bulk of tourism to Hong Kong. Shares in Chow Tai Fook Jewellery Group, which is controlled by the family of the late billionaire Cheng Yu-tung, rose as much as 4 per cent on the news.

Hong Kong has been successful at containing coronavirus, with just 212 deaths, but its strict quarantine policies have irritated international business, which argued the rules were undermining the city’s status as a financial hub.

A Wall Street banking executive said mainland China was the most popular destination for Hong Kong staff, so opening up business trips would be a “huge step”, although they hoped it would be extended to allow bankers to go to China without quarantining.

“We’re all for getting things moving again between Hong Kong and the mainland, but this policy seems very one-sided,” the executive said.

Hong Kong is pursuing a zero-Covid policy, in line with demands from mainland China, its biggest trading partner, which has yet to reciprocate to substantially ease travel curbs on the territory.

To meet China’s requirements, Hong Kong has banned most international non-residents from entering and forced residents travelling from a number of countries to undergo two or three weeks of hotel quarantine.

“We are playing a safe strategy that we must keep Covid at bay before we talk about a full . . . open border or economy,” Edward Yau, Hong Kong’s secretary for commerce and economic development, has said.

Criticism of the government rose late last month over a U-turn on a plan to ease the international travel restrictions.

The European Chamber of Commerce in Hong Kong (EuroCham) warned that the quarantine policies could cost the city its competitive edge in attracting top talent and warned people were already leaving “for good”.

“The announced relaxation is a positive sign for Hong Kong in general as it will allow for more visitors to come to Hong Kong. However, this has not changed our position,” said Frederik Gollob, chair of EuroCham.

The Hong Kong Exhibition & Convention Industry Association, which had previously relied on the city being a centre for international events and conferences, said on Monday that 45 per cent of its members may close within 12 months without subsidies and a road map for relaxing compulsory quarantine for business travellers.

A senior finance executive in Hong Kong told the Financial Times that the quarantine measures were causing “irrefutable damage” to the territory’s popularity as an international financial centre.

Global banks in Hong Kong have been able to apply for a specific scheme to exempt their top executives from lengthy quarantines in the city. However, 246 out of 325 applications under the scheme have been rejected or withdrawn, according to official figures.

Another plan allowing 5,000 Hong Kong residents a day to return from the mainland without quarantine was temporarily suspended because of an outbreak in China, but it is set to restart on Wednesday.

Hong Kong’s inoculation rate is slowing, with only 54 per cent of the population fully vaccinated against Covid.

Additional reporting by William Langley in Hong Kong