*By Oriol Caudevilla
There is no doubt that Hong Kong has handled COVID-19 remarkably well thus far since it has succeeded in keeping the number of infections well under control and the mortality rate among the lowest in the world.
Obviously, it is way too early to claim victory, since we do not know yet what will happen once winter arrives, and this virus is, by its very nature, very unpredictable.
This partial victory cannot be credited to a single party, but mainly to the collaborative effort of the Hong Kong community. On the one hand, the Government has wisely adopted very stringent but scientifically sound measures that, despite never including a full lockdown, have substantially reduced the chances of cross infection among the people.
On the other hand, the citizens of Hong Kong must be praised as well, since they have complied with all the restrictions and recommendations admirably well, showing that the SARS experience from 2003 has not been forgotten, and showing that the system of social values established by Confucianism proves to be very valuable in times of crisis.
Now that COVID-19 seems to be under control here and other cities nearby, it is time for Hong Kong to reopen its borders and introduce safe “travel bubbles” to facilitate travel between safe cities and rejuvenate the economy in the region. In this sense, Macau is showing Hong Kong the right path to follow to reopen its borders: after containing the virus, Macau managed to welcome 156,000 visitors over the National Golden Week holiday in early October, following the reopening of its borders to Mainland visitors.
Accordingly, Hong Kong has just taken a first (albeit very important) step forward: Singapore and Hong Kong have reached an agreement to establish a two-way Air Travel Bubble, which will begin this week, on November 22. This will allow travelling between both cities without quarantine, and there are no restrictions on the purpose of travel. As expected, there are certain health guidelines that travellers would have to abide by, including testing negative for Covid-19.
Hong Kong’s Commerce Secretary, Edward Yau, and Singapore’s Transport Minister, Ong Ye Kung, said the scheme would begin with one flight a day into each city, with a quota of 200 travellers per flight. This would be increased to two flights a day into each city from December 7, as long as the COVID-19 situation does not deteriorate in any of the two cities (if that happened, the bubble would be suspended).
COVID-19 has proven to be enormously economically disruptive, causing unprecedented job losses and business closures. According to the Hong Kong Tourism Board (HKTB), visitor arrivals from all points for the period of January-July 2020, was down by 91.2 per cent, compared with the same period in 2019, resulting in the reduction of visitors from more than 40 million to just 3.5 million.
In other words, Hong Kong’s tourism industry was nearly wiped out overnight, putting hundreds of thousands of employees out of work. And the only cure is to facilitate the return of tourists.
Restoring air travel to normalcy is key to reinvigorating Hong Kong´s (and the world’s) economic growth. Christian Nielsen, Chief Legal Officer of AirHelp, a Berlin-based passenger rights company, considers that “China has managed to cope with Covid-19 better than most of the other significant economies in the world.
Their domestic flight volumes are now at the same levels as before Covid-19, and although their international flight volume for passengers is still far below 2019 numbers, international cargo is at par. It gives China a mobility edge over competing economies.
For Hong Kong, with its unique close ties to China, this provides an opportunity for an early chance to rebuild its economy and source international talent and interest before the US and EU come back up to speed.”
Undoubtedly, Hong Kong has a huge growth potential in many areas, such as FinTech. But it will make no sense to focus on developing its FinTech potential or schemes like the Wealth Management Connect if its borders remain closed.
As a first step, the Hong Kong-Singapore travel bubble is a very good start, but it should quickly be followed by reopening its borders with Macau and Shenzhen, continuing with other cities in China, and as soon as possible, with other safe places in Asia aside from Singapore.
While it is too risky to reopen all its borders simultaneously, it must keep taking cautious little steps forward while monitoring the COVID-19 developments and be prepared to reverse course immediately as the changing situation demands.
The author holds an MBA and a doctorate in Hong Kong real estate law and economics. He has worked as a business analyst for a Hong Kong publicly listed company and he has given seminars at HKU on Shadow Banking in China and at several universities in Macau on China´s new digital yuan. He is currently a member of the Blockchain, Digital Banking and Greater Bay Area Committees at the Fintech Association of Hong Kong (FTAHK).