Hong Kong is struggling to convince CEOs it’s open for business

“We are back!” Hong Kong Finance Minister Paul Chan said at a conference meant to show the Chinese city was open for business following the lifting of coronavirus measures that are eroding its status as a hub for international finance.

But Chan himself wasn’t back at all. Stranded in the Middle East due to the remaining pandemic restrictions in Hong Kong, after contracting Covid-19 on a work trip, he appeared at the fintech gathering on Monday via video link.

The incident embodied the challenge Hong Kong faces in persuading global investors to return to an area that has faced weeks of quarantines and unpredictable flight bans throughout much of the pandemic.

The fintech conference is part of a week of gatherings – including a global forum for financial institutions executives and the return of the famous Rugby Sevens tournament – which the government hopes to herald Hong Kong’s return to business.

But at least three senior executives have pulled out of the Global Financial Leaders’ Investment Summit, which opens on Wednesday, and two others are missing from the schedule.

Blackstone said its president Jonathan Gray could no longer attend due to a coronavirus infection and would be replaced by chief financial officer Michael Chae. Citigroup chief executive Jane Fraser also stepped down after signing Covid to be replaced by head of wealth management Anand Selva.

Barclays chief executive CS Venkatakrishnan “changed his travel plans,” while Timothy Armor, chairman of US fund manager Capital Group, and Valérie Baudson, chief executive officer of Amundi, one of Europe’s largest wealth managers, were also absent from a revised agenda for Wednesday. Capital Group and Amundi did not immediately respond to a request for comment.

Some leaders say Hong Kong’s remaining coronavirus rules, which include Covid testing before departure and on arrival, could undermine the city’s return to the world stage.

Johannes Hack, President of the German Chamber of Commerce in Hong Kong and board member of the bank, said measures such as on-arrival tests should be abolished.

“I can’t ask my boss to come to Hong Kong while he’s worried about a positive test and a disruption in his trip,” Hack said. “If I say, ‘Come for two days but might be stuck for a week’, [they are] gonna say no.”

Paul Chan, Hong Kong's Finance Secretary, speaks via video at FinTech Week
Paul Chan, Hong Kong’s finance secretary, was forced to address FinTech Week attendees via video after catching Covid © Bertha Wang/Bloomberg

Visitors arriving in Hong Kong must undergo PCR tests for a week and are not allowed to visit restaurants or bars for at least the first three days. If they test positive, they must isolate themselves for seven days.

Some participants of the financial forum and the fintech conference were exempted from certain requirements. For example, bank bosses who test positive are allowed to leave the city by private jet.

Hong Kong Chairman John Lee on Tuesday dismissed concerns about attendance at the global forum, which is also attended by CEOs of Goldman Sachs and Morgan Stanley. “[Those] who cannot attend the event represent only a small number of people. . . We’re still seeing over 200 attendees, which is in line with our expectations,” Lee said.

However, the panelists’ physical absence from mainland China highlighted the impact of the severe travel restrictions imposed by Beijing as part of its zero-Covid approach. Regulators including the governor of the People’s Bank of China and the vice chairman of the China Banking and Insurance Regulatory Commission attended the fintech conference via recorded speeches or live stream video links.

Still, Bank of China President Liu Jin was scheduled to attend the global forum in his first public appearance outside of mainland China since taking office in 2021. Chan, the finance secretary, was also due to attend after he made a belated return to Hong Kong on Tuesday and tested negative for Covid.

Hong Kong is desperate to repair the reputational damage caused by the long coronavirus isolation and crackdown on civil liberties following large-scale pro-democracy protests in 2019.

The city’s economy shrank 4.5 percent year-on-year in the third quarter, much worse than the 0.8 percent contraction economists were expecting and the worst contraction since the second quarter of 2020.

At the fintech conference, many executives said they were thrilled to return to Hong Kong and excited by the city’s proposal to allow retail crypto assets. However, others lamented the remaining Covid rules.

“It was so annoying not being able to do much for the first few days and then all the testing,” said one attendee. “I think Hong Kong could really come back, but it’s only being held back by these rules.”

https://www.ft.com/content/3ff1f4ad-6180-49ea-861c-52960784e4f4 Hong Kong is struggling to convince CEOs it’s open for business

Adam Bradshaw

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