HK’s Status As Financial Hub Hit By Strict Quarantine Rules
HONG KONG – Unless it relaxes its stringent quarantine rules, the Chinese territory risks losing executives and investments, reported Reuters on Wednesday evening (31 August, SGT).
In August, the Hong Kong government raised the compulsory hotel quarantine period to 3 weeks for arrivals coming from most nations. Due to this, bankers had to oversee billion-dollar transactions while quarantined in hotel rooms, with one financial professional working on Baidu’s US$1 billion bond doing so.
Financial firms, traders, and hedge funds said the strict quarantine rules could trigger a brain drain as it’s making Hong Kong an unattractive place for work, on top of impeding investments into the city’s asset management sector.
“People are thinking, do I want to be in Hong Kong for the next 3-5 years, as they see the world opening up,” said Kher Sheng Lee, Co-head of the Asia Pacific Alternative Investment Management Association.
In comparison, rival financial hub Singapore is poised to reopen soon after 80 percent of its population have already been vaccinated against COVID-19, while bankers returning to New York and London are allowed straight to their workplace after travelling.
A senior banker at a major bank based in the US shared that if there’s no change in Hong Kong’s quarantine rules by Q2 2022, he would leave the city even if it means losing his current job.
“For a lot of people this is starting to go on 2 years missing grandparents, births, deaths, birthdays, anniversaries etc. Grandparents don’t have forever to live,” explained the banker.
Hong Kong’s quarantine rules, which is among the strictest in the world, are compelling expatriate and Chinese employees to return home, shared a fund manager, who requested anonymity due to company policy.
“For many people this is the last straw… people in Hong Kong are starting to calculate how they can work from abroad and manage things,” added Tara Joseph, President of the Hong Kong branch of the American Chamber of Commerce (AmCham).
Notably, the financial services industry accounts for approximately 20 percent of Hong Kong’s gross domestic product (GDP) based on government data.