A major financial services industry group has urged the Hong Kong government to ease Covid-related restrictions, underlining that current rules have put the city’s hub status, economic recovery and competitiveness at risk.

«The rest of the world is moving on, and Hong Kong isn’t articulating a plan that gives individuals the certainty they need,» according to a «Bloomberg» report citing Mark Austen, chief executive of the Asia Securities Industry & Financial Markets Association (ASIFMA), in a letter sent to Hong Kong’s Financial Secretary Paul Chan.

«Some firms are moving operations, it’s not a huge amount right now. The longer this goes on, the more difficult it is for firms to keep those positions in Hong Kong.»

Hub Status Risks

According to an ASIFMA survey of 30 members that include banks and asset managers, some 90 percent of respondents operating in Hong Kong have been «moderately» or «significantly» impacted.

Almost three-quarters are experiencing difficulties in attracting and retaining talent with one-third undergoing «significant» challenges. 

Nearly half of respondents are contemplating to move staff or functions out of the city.

Economic Risks

In addition to Hong Kong’s hub status, the letter also underlined risks to the city’s economic recovery.

ASIFMA said it expects a strong rebound of 6.5 percent growth this year but notes concerns over the long-term economic trajectory, highlighting that the international financial services sector contributed to about 21 percent of Hong Kong’s economic output.

ASIFMA Wishlist

In the letter, ASIFMA made a series of recommendations to help improve the situation, including the easing of travel restrictions such as the 21-day quarantine, particularly for regions like the U.S., Europe and the U.K. where many of the financial institutions are headquartered. 

ASIFMA also suggested limiting the definition of close contacts for imported cases, sustaining emphasis on vaccinating the city’s most vulnerable and accepting Covid as a new norm.

«The Government must do its utmost to foster informed dialogue and full consideration of the long-term risks to livelihoods if its borders remain effectively closed, in contrast to competing international financial and business centers,» Austen said. «A clear and well-communicated timeline for opening may in itself serve as a catalyst for the unvaccinated to get vaccinated.» 

Hong Kong Stance

Meanwhile, the Hong Kong government has adopted a stance that contrasts with ASIFMA’s desires.

The city has taken a hard-line zero Covid approach with chief executive Carrie Lam reportedly saying that even a single related death would be a «major concern».

Lam also said that opening up the Hong Kong-China border was the priority, calling the mainland «more important» than international business.