The Hong Kong economy has been hard hit, first by the riots that began in June, then by COVID-19, the feared epidemic that has now been officially called a pandemic by the World Health Organization. The IHS Markit Hong Kong Purchasing Managers’ Index plunged to a record low of 33.1 in February from 46.8 in January. A rate below 50 suggests economic contraction, and in anticipation of economic contraction, the stock market has plunged almost 6,000 points from its recent peak. Presently, the tourism industry is the hardest hit. Not only are tourists not coming into Hong Kong, but Hong Kong residents are also too worried about taking any overseas trips, and many countries have also declared that Hong Kong is among the jurisdictions from which visitors will be quarantined for 14 days or kept out altogether.
Before the COVID-19 outbreak took its toll on the Hong Kong
economy, a report from property consultancy CBRE showed that investment in Hong
Kong office and retail properties had plunged by 52 percent in 2019 to HK$68.9
billion (US$8.87 billion). Today, as restaurants and retail shops close down one
after another, empty commercial premises can be seen in Mong Kok, Causeway Bay
and Tsim Sha Tsui, which are normally the busiest areas attracting the most
shoppers and tourists.
A big question now is: How is this going to end up? The financial secretary has announced a HK$120 billion package to relieve the economic pains of Hong Kong people, to bolster the SAR’s businesses, and to fight the pandemic. But to many business owners, the losses are just too huge, and the assistance far too small to make a difference. Many are being forced to close down because they just cannot continue to bleed any longer.
The proposed arrangement would not only be the mainland, but also with all countries that have demonstrated success in containing the outbreak and also practice strict quarantining of visitors from countries where the epidemic is still out of control
On March 10, Chief Executive Carrie Lam Cheng Yuet-ngor warned that in view of the outbreaks in various regions around the world, Hong Kong residents should avoid traveling abroad altogether unless necessary. Hong Kong Travel Agent Owners Association President Freddy Yip Hing-ning responded by saying such advice was like a “death sentence” to the industry.
In my view, all is not lost. Indeed, it is about time Hong Kong should kick-start the economy. The good news is that on the Chinese mainland, as of Sunday, 263 cities are already free of any COVID-19 cases, and about 10 provinces are now completely free of such cases. Four other provinces have only one case each. In particular, recent increases in cases are all imported. If these provinces continue to be vigilant and require a strict quarantine of visitors or returnees from countries and areas still ridden with the disease, then it is time for Hong Kong to open up the two-way flow of people with them. The premise, of course, is that Hong Kong itself must also be free of local cases and maintain the same strict quarantine protocols on visitors and returnees. The proposed arrangement would not only be the mainland, but also with all countries that have demonstrated success in containing the outbreak and also practice strict quarantining of visitors from countries where the epidemic is still out of control.
This way, and only this way, can the world start recovering. The epidemic can kill, but economic pain can kill too. We want to save people, and by saving businesses from bankruptcy we may also save many people who otherwise could suffer from mental stress, have weaker bodies and contract illnesses, and even kill themselves. We recall that during the Great Recession of 1998, there was a spike in bankruptcies and suicides in Hong Kong. From 1997 through 2003, Hong Kong’s suicide rate rose from 12.1 to 18.8 per 100,000.
As long as we strictly enforce the protocols, there is very little risk in the proposed gradual reopening of our borders to the mainland and to foreign countries. We really cannot wait until the epidemic has disappeared. Too many businesses are on the line now. This is especially true with the tourism industry, including airlines, hotels, and taxis. With zero tourists from the mainland and extremely few visitors from elsewhere, and with fear virtually stopping all outgoing tourists and travelers from Hong Kong, the cash flow of many businesses has fallen to close to zero!
Compared to the needs of these businesses, our fiscal reserves are actually very small, and there is just no possibility of any meaningful support of businesses. On the other hand, with just an announcement for a gradual opening-up of our borders, hope will be revived overnight!
Hong Kong should act right away, and lead the way for the world to recovery! Let every country know that seriously containing the epidemic with strict quarantine where needed is short-term pain for long-term gains. As China’s example shows, the sacrifice need not be drawn out for a long time. Reversal of the upward trend of new cases can appear in a matter of weeks, as the experiences of China and South Korea show.
Some may worry that my proposal will put the lives of Hong Kong residents at risk. But if free movement of people is permitted only between cities that have a local COVID-19 infection-free record of 28 days, the risk is certainly acceptable.
The author is a senior research fellow at Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute at Lingnan University.
The views do not necessarily reflect those of China Daily.
HONG KONG NEWS