A health worker inspects travelers at Hong Kong International Airport / Jerome Favre. A day after a group representing some of the world’s b...
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| A health worker inspects travelers at Hong Kong International Airport / Jerome Favre. |
As much of the world has begun opening borders and making plans to eventually treat the disease as endemic, Hong Kong and mainland China have shown no signs of easing some of the strictest coronavirus containment regimes. China is adhering to its playbook of neighborhood lockdowns, location tracking, weekslong quarantines and indefinitely delayed visas, in an effort to eradicate every single case of the virus.
The country was again carrying out mass testing and imposing domestic travel restrictions this week in some areas, including Beijing, to stem the spread of an outbreak after a retired couple from Shanghai who were on a cross-country trip tested positive for the virus on Oct. 17. Chinese authorities reported 43 new confirmed Covid-19 cases on Monday, in which 29 were locally transmitted. Officials have yet to say when their strategies might shift, even with about 76% of the population fully vaccinated.
While the policies have been successful at largely keeping Covid-19 out for most of the pandemic, the travel restrictions are beginning to wear on foreign workers and businesses, who argue that adhering to the strict policies will carry mounting costs for China’s economic growth, which is already slowing.
“It’s not an issue, it’s the issue,” said Ker Gibbs, president of the American Chamber of Commerce in Shanghai, who cited one of the business group’s recent surveys where 45.1% of respondents said Covid-19 restrictions had hurt operations. Asia Securities Industry & Financial Markets Association, the industry group in Hong Kong, said in its open letter to the government that 48% of firms they surveyed are contemplating moving staff or functions out of Hong Kong due to these operational challenges caused by the uncertainty over when quarantine restrictions will be lifted.
The group, which counts as members more than 150 companies in the financial services industry—including some of the largest Wall Street and Chinese banks—said 73% reported experiencing difficulties attracting and retaining talent in Hong Kong, a third of whom rated the difficulties as “significant.”
Arriving visitors to Hong Kong from more than a dozen countries, including the U.S. and the U.K, need to quarantine in hotel rooms at their own expense for three weeks. The mainland’s requirements vary by region, but travelers generally need to quarantine for several weeks.
On Tuesday, the day after the financial industry group called on Hong Kong to provide an exit strategy for its zero-Covid-19 policies, the Hong Kong government said it would be removing most quarantine exemptions, which had previously been extended to diplomats and senior executives. It will further require patients who had recovered from Covid-19 and tested negative to spend an additional two weeks in hospitals, bringing the policies into closer alignment with the mainland.
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| People lined up for Covid-19 tests in Beijing, which imposed travel restrictions this week to stem the spread of a small outbreak / Kevin Frayer. |
The additional restrictions announced this week had been planned for some time and weren’t a direct response to the letter, said two people familiar with the government’s deliberations.
“International travel is important, international business is important, but by comparison, the mainland is more important,” the city’s chief executive, Carrie Lam, said earlier this month, referring to a more open border with the mainland. Visitors from Hong Kong currently need to quarantine when they enter the mainland. Mainland China has been even more strict in some ways. Many foreign executives have had their dependent visas delayed, keeping many people from seeing their families.
The policies are a contrast to countries in the West that are reopening as vaccination levels rise. The U.S. will begin welcoming most fully vaccinated visitors on Nov. 8. Other countries in the region that had similarly strict pandemic policies, such as Singapore and Australia, are beginning to loosen their border restrictions and preparing to live with Covid-19.
Singapore has seen cases rise to their highest levels of the pandemic in recent days, recording more than 5,000 on Wednesday. Almost 99% of all cases over the past four weeks were mild or asymptomatic. Prime Minister Lee Hsien Loong said when announcing the relaxations earlier this month that the country couldn’t “stay locked down and closed off indefinitely.” Mr. Lee added that the disruptions to businesses, economic losses and sealed borders had caused psychological and emotional strains to the populace.
The travel restrictions and uncertainty are having an effect, with many foreign workers in Hong Kong and on the mainland talking more about whether to stay or leave. One American management consultant based in Hong Kong said he is planning to ask his company for relocation and move by the spring. One of the attractions of being based in Hong Kong was the opportunity for personal and professional travel—which has now been curtailed—while he also needs to spend more time with his elderly mother back in the U.S.
“It is a devastating decision because I love this place more than anywhere else in the world,” he said. “But I have responsibilities outside of Hong Kong and life goals: at this point, I cannot accept these conditions anymore.”
The policies are also rippling outward. Ships have routinely been held up in ports such as Shanghai as crews are tested for the virus, for example, creating supply-chain disruptions. “The fact that China is at the center of most global value chains and with such draconian zero case policies, does have a bearing on the dysfunctional global supply chains,” said Alicia García-Herrero, chief economist for Asia-Pacific at French bank Natixis.
The restrictions have also meant that tourists from the mainland have been grounded, which has been particularly devastating for economies in the region such as Thailand that rely heavily on them. Tourists from the mainland spend an estimated $220 billion globally every year, said Sean Darby, global equity strategist at Jefferies in Hong Kong. Mr. Darby said that as China represents about 20% of global GDP, even “small changes in growth estimates hurt everyone.”
But Chinese officials have so far offered no hint that they are deterred by the potential for further economic damage. The head of the Chinese Centers for Disease Control and Prevention, Gao Fu, said earlier this month that the country isn’t ready to claim Covid-19 as endemic because at the moment, it is still a pandemic.
“We have already started to discuss this,” Mr. Gao said at a virtual health conference earlier this month. But, he added: “So far we are doing so well: No one could believe that China can achieve such a zero clearance strategy and still be able to keep society and the economy running.” “Yes, there are a few disadvantages, but look at what’s happened here: China made a great contribution to global health,” Mr. Gao said.
In late July, China faced its most widespread Covid-19 outbreak in months with more than 200 cases linked to the city of Nanjing. Authorities kept tight border controls and ramped up vaccination drives, but the Delta variant is challenging their pandemic response. Photo: Alex Plavevski/Shutterstock The Wall Street Journal Interactive Edition
Chinese officials have repeatedly pointed to the country’s success in fighting the virus as evidence of the strength of its governance. China, with its population of about 1.4 billion, has recorded about 109,000 cases and 4,849 deaths since the coronavirus was first identified within its borders, according to data from Johns Hopkins University. The U.S., which has a population of 329 million, has recorded 45.7 million cases and 741,231 deaths linked to Covid-19.
“This policy is also still very popular in China and receives strong public support: People are very proud of how well state leaders have controlled the virus,” said Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations in New York.
Reopening the borders has the potential to change the narrative. The higher transmissibility of the Delta variant and questions about the efficacy of the country’s vaccines are further complicating any easing of restrictions. As of Saturday, China had administered more than 2.2 billion doses of vaccines, according to official statistics, with about 1.1 billion people fully vaccinated.
But clinical trials showed vaccines made by Sinovac Biotech Ltd. and Sinopharm to be less effective overall than the mRNA vaccines made by Moderna Inc. and Pfizer Inc. and BioNTech SE, although the Chinese vaccines have been shown to be effective at preventing severe cases of the disease. The World Health Organization has recommended a booster shot for those over 60 who have received Sinovac or Sinopharm.
Major events set for next year give China additional incentives to keep the virus under wraps. China is hosting the Winter Olympics, which are scheduled to open on Feb. 4. China will hold its 20th Party Congress next fall, when Mr. Xi is expected to secure an unprecedented third-term as the leader of the Chinese Communist Party.
“The approach helps bolster party legitimacy ahead of that,” said Mr. Huang. “Abandoning ‘Zero Covid’ now is tantamount to admitting the former approach doesn’t work.”