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Published: 09:35, January 05, 2023 | Updated: 09:45, January 05, 2023
Border reopening with mainland: Lifeline for HK
By Jason Lee
Published:09:35, January 05, 2023 Updated:09:45, January 05, 2023 By Jason Lee

With the major shift in the Chinese mainland’s pandemic control policy, a reopened border between Hong Kong and the mainland is finally on the horizon. The move is no doubt the best news for the city following three years of isolation.  

The public is encouraged to see that Chief Executive John Lee Ka-chiu, along with his administration, is putting the resumption of quarantine-free travel at the top of his “to-do” list — because he knows that the border reopening is now the most important matter for the city. And he is right. 

Hong Kong has waited for this to happen for too long. Over the past three years, countless people have been forced to end their twin-city lives. Numerous families have been separated. Many entrepreneurs suspended their cross-border business plans due to the pandemic. Their losses and anxiety showed how closely the two regions are connected. They are the real bonds that tie Hong Kong and the mainland. It is time normal life for them was restored.

What’s more vital is the economy. The Hong Kong Special Administrative Region’s latest real GDP growth forecast for 2022 is minus 3.2 percent. The city recorded a widened year-on-year contraction in the third quarter, in which real GDP fell by 4.5 percent from a year earlier. The recession is burning, but the real-world situation is more worrisome. 

The HKSAR government has formulated comprehensive blueprints to broaden young people’s horizons and help them know more about the country’s development. Indeed, that is a key part of Hong Kong’s talent fostering policy, but it will never succeed if the border is closed 

Travel restrictions forced companies and institutions to base more staff outside the city, which is threatening Hong Kong’s status as a meeting point and commercial hub in the Asia Pacific region. How much business are we losing potentially?

The mainland has throughout been the de facto largest source of Hong Kong’s inward direct investment, slightly less than the British Virgin Islands where most offshore companies are registered, accounting for about 30 percent of the total. And the mainland is the largest destination for Hong Kong’s outbound investment, accounting for 50 percent of the total. The border restrictions have also largely affected the flow of capital by suppressing the flow of people.

As a result, Hong Kong’s fiscal reserves have dropped to below HK$800 billion ($102.3 billion) recently, from HK$1.2 trillion in early 2020, as the HKSAR government has had to fund anti-pandemic measures and stimulate the local economy. Since the beginning of 2022, Hong Kong’s foreign currency reserve has declined by 16 percent as the Hong Kong dollar has had to follow the appreciation of the US dollar under the linked exchange rate system. If those figures do not improve, the city’s international financial center status will be at stake. For an externally-oriented economy, the only way to address this predicament is to reopen the border — the lifeline for Hong Kong. 

And communication between the two sides is also of great importance. For example, in terms of youth development, the HKSAR government has formulated comprehensive blueprints to broaden young people’s horizons and help them know more about the country’s development. Indeed, that is a key part of Hong Kong’s talent fostering policy, but it will never succeed if the border is closed. 

Over the past three years, students could not go on summer trips to the mainland. People could not travel north to see with their own eyes the mainland’s development. The isolation will defeat all the merging efforts and may widen the psychological gap between Hong Kong and mainland people in the future.

And 44 million mainland tourists came to Hong Kong in 2019, accounting for 78 percent of the city’s total tourist arrivals that year. These visitors not only brought sizable travel spending and helped create considerable grassroots employment, but also may have served as ambassadors for the city when they returned to the mainland. But most of them have been noticeably absent from the city over the last three years. That’s also a huge hidden loss.

This is also why the city must reopen the border as soon as possible, especially at a time when Hong Kong is starting to play a bigger role in the overall national development strategies, including the Guangdong-Hong Kong-Macao Greater Bay Area. No integrated development will be possible if the flow of people is restricted. 

However, any policy must be prudent and Hong Kong has to take a balanced approach to this new situation. As the pandemic is currently at its peak on the mainland, and we are entering wintertime, Hong Kong still has to take the capacity of its public health system into consideration. There is still a need to impose vaccination requirements and to start with a gradual quota-based process in the first phase of the reopening. 

Indeed, that is a great challenge for the chief executive and his administration. But residents are confident that our public health experts will offer the best policy proposals and the government will take cautious steps toward a full return to normal life in the months ahead. At that time, the Hong Kong-mainland integrated development plans will finally be unleashed to fulfil their potential after years of interruption. 

The author is a member of the Hunan Province Committee of the Chinese People’s Political Consultative Conference, executive vice-chairman of the Hong Kong CPPCC Youth Association and vice-chairman of the Hong Kong Y.Elites Association.

The views do not necessarily reflect those of China Daily. 


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