Hong Kong’s harsh travel curbs have become the biggest challenge to doing business in the international financial hub, a survey of US businesses has found.
In the latest survey released by the American Chamber of Commerce in Hong Kong (AmCham) on Wednesday, 60 percent of respondents chose the city’s travel and quarantine rules as the biggest obstacle to their operations.
US-China relations were the next most common concern after travel restrictions, chosen by 44 percent of respondents, followed by the COVID-19 pandemic, legal and regulatory uncertainty, and political uncertainty.
Nearly half of companies said they had suffered “significant disruption” in offices outside Hong Kong due to the restrictions, with nearly one-third delaying new investment and struggling to fill senior executive roles.
More than one-quarter of companies and 44 percent of individuals surveyed said the restrictions made it more likely they would leave the Chinese-controlled city, which built its reputation as an international business hub on the back of its proximity to China and a legal system inherited from Britain.
Under a strict “zero Covid” policy, the former British colony mandates 21 days of hotel quarantine for almost all arrivals and regularly slaps temporary bans on airlines and countries deemed at risk of spreading the virus. The policy, which is designed to align with mainland China, has shown no signs of easing despite growing frustration among expatriates and businesses and moves elsewhere towards living with the virus.
The Amcham survey also revealed declining faith in Hong Kong’s rule of law, following Beijing’s imposition of a draconian national security law that has wiped out practically all political opposition and severely restricted media and civil society. The Hong Kong government has rejected suggestions rights and freedoms have declined under the law, and credited the legislation with restoring order in the city after often violent pro-democracy protests in 2019.
Nearly 60 percent of respondents said the rule of law had deteriorated during the past 12 months, with only one-quarter describing themselves as confident or very confident in its current state.
Nonetheless, just over half described the business environment over the past year as good, very good or excellent, with 47 percent describing the city as still being competitive or highly competitive.
Only 5 percent of respondents said they had made definite plans to move their headquarters out of Hong Kong, with 47 percent unsure about relocating.
A plurality of 41 percent said they were optimistic or very optimistic about the business outlook for the coming 12 months, while 29 percent said they intended to expand operations over the next two years.
AmCham received responses from 262 of its members for the survey, which was carried out between September and October last year.
AmCham President Tara Joseph said the chamber had been proud to serve as an “objective, honest broker” for more than 50 years.
“Given the challenges of the past few years, it is now more important than ever to remain vocal in areas that are relevant to Hong Kong’s sustainable success,” Joseph said.
Joseph said she hoped the survey would serve as a “launch point for discussion and collaboration to make Hong Kong a top destination for businesses from across the world.”
“Hong Kong has always renewed and refocused after challenging times, and hopefully business, government and residents can work together to surmount challenges,” she said.