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Hong Kong is easing travel restrictions that have hit the economy and sparked an exodus

Hong Kong has eased its strict border controls after restrictions imposed to combat the Chinese territory’s worst coronavirus outbreak hit the economy and prompted residents and expatriates to flee the city.

City Chairwoman Carrie Lam said she would lift a flight ban from nine countries including the US and Britain on Hong Kong residents and allow those travelers to quarantine in a hotel for seven days from 14 days. The changes will take effect on April 1st.

“Hong Kong’s Isolation Requirements for Inbound Travelers. . . could in turn have an adverse effect on the local business environment, particularly as the rest of the world moves towards easing [Covid policies]’ Lam said on Monday. “The economy must move forward”

The decision will give international business a boost, which argues that Hong Kong’s tight controls have undermined the city’s status as a global financial hub.

Real estate magnates, bankers and academics had warned that the restrictions had caused a brain drain and hurt the city’s economy. The area recorded a net loss of 65,295 residents last month and another 40,920 through mid-March.

Paul Chan, the city’s finance secretary, confirmed on Sunday that restrictions would push the economy back into contraction.

“Hong Kong’s economy will inevitably slip into negative growth in the first quarter of the year, with the unemployment rate continuing to deteriorate rapidly,” Chan said.

Lam had previously argued that the controls were necessary to persuade the mainland to reopen the border, but last week he signaled a change of direction.

“I have a strong feeling that people’s tolerance is decreasing,” she said. “I have a very good feeling that some of our financial institutions are losing patience with this kind of isolated status of Hong Kong and Hong Kong is an international financial hub.”

Cases are now declining after the city has reported more than 1 million Covid infections with at least 5,600 deaths since the fifth wave in late December, beating the official figure in mainland China. Beijing has also struggled to contain the country’s Biggest outbreak since Wuhan and had recorded about 132,000 Covid infections and 4,600 deaths as of Sunday.

“[Health] Experts also believe the peak has passed and infections are declining,” Lam added.

As the outbreak spiraled out of control, the government proposed a city-wide lockdown and mass testing of the entire population, sparking a wave of panic buying. A policy that could see Covid-positive children being separated from their parents in hospitals frightened expatriates further.

On Monday, the government said the unprecedented testing exercise was now on hold but “when the time is right” it could still go ahead.

Face-to-face classes will gradually resume from April 19 and most social distancing measures will remain in place until April 20.

https://www.ft.com/content/4c8e74fb-7602-49da-9ee5-0e5ecc8dac52 Hong Kong is easing travel restrictions that have hit the economy and sparked an exodus

Adam Bradshaw

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