Hong Kong fund lobby calls on city to drop Covid-19 quarantine measures

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HONG KONG (BLOOMBERG) – Hong Kong’s lobby group for fund managers urged incoming Chief Executive John Lee to scrap quarantine rules for travellers and open up to the rest of the world as urgency is needed to restore the city’s status as an international financial centre.

The city’s financial industry has been “battered” by the quarantine measures, said Ms Sally Wong, the chief executive of the Hong Kong Investment Funds Association, which represents firms with more than US$52 trillion (S$72 trillion) in assets under management, in an email to Bloomberg News.

“The longer we are stuck in this restrictive mode, the more we are reducing our relevance and competitiveness in the international arena,” she said.

Loosely following mainland China’s zero Covid approach, Hong Kong mandates a seven-day quarantine for incoming travellers even as rival centres such as Singapore, London and New York have dropped all restrictions.

The city has seen an outflow of tens of thousands of residents, including bankers and finance industry professionals who have chafed at the strict social distancing and quarantine rules.

Signs have mounted recently that officials have grown concerned.

The city has drifted from President Xi Jinping’s strict Covid-19 policy of eliminating the virus in recent months, resisting tightening curbs even as it has seen more than 800 daily infections.

Even the outgoing leader, Carrie Lam, said last week that the travel restrictions have undermined the city’s status as a finance hub.

Officials are now planning for a summit in November and will seek to invite top bankers and asset managers in a show that the city is getting back on its feet.

Given the planned summit the city must have some “working assumptions” and officials should share any plans “as to how, when Hong Kong will open up to the rest of the world”, Ms Wong said in the email.

“If we can achieve quarantine free travel soon, the November summit would be propitious to show that Hong Kong’s connectivity with the rest of the world is back in motion; and we are firing on all cylinders,” she said.

Wish list

The group is also preparing a larger “wish list” of what it expects from Mr Lee when he takes over in July, according to Ms Wong.

One issue that needs to be addressed is the “teething problems” in Stock Connect, a link that allows investors to buy stocks in mainland China.

Its need-to-fix list includes allowing block and holiday trading as well as opening access to initial public offerings in mainland China, according to Ms Wong.

The group said rules should be relaxed in other cross-border schemes such as the Mutual Fund Recognition and the Wealth Management Connect, and to allow China’s growing private pension funds to invest through Hong Kong’s approved pension scheme.