Hong Kong’s strict coronavirus containment measures are causing growing anxiety within the city’s financial sector, after an outbreak forced several firms to shut offices and left some employees and their children stuck in spartan government quarantine facilities.
An executive at one international investment bank in the city said the firm would have to consider shifting some of its traders to other financial hubs if Hong Kong’s current quarantine policies stay in effect for the long-term. Managers at another global financial company are concerned they’ll struggle to retain and attract overseas talent if Hong Kong’s rules persist while other cities begin to relax restrictions as vaccine rollouts accelerate.
A draft letter calling on the Hong Kong government to follow international best practices and present a clear road-map for COVID policies has been circulating among industry groups representing financial and corporate interests, though it’s unclear which of them will sign, people familiar with the matter said. Authorities will convene a meeting Friday with international chambers of commerce and other business groups to provide a COVID update, another person said. Like others in this story, they spoke on the condition of anonymity to discuss private and politically sensitive matters.
“For the U.S. business community, the quarantine has been a great frustration, and we hope the procedures will be changed when the government feels it is safe,” Tara Joseph, president of the American Chamber of Commerce in Hong Kong, said in an emailed response to questions from Bloomberg.
At issue are quarantine rules that rank among the world’s strictest. Close contacts of positive cases in Hong Kong, including young children, must spend as many as two weeks in centralized surveillance facilities even if they test negative. While one of the quarantine centers is in a Dorsett-brand hotel, other purpose-built facilities feature tiny rooms with bare-bones furniture. Some lack wifi connections that can support remote work.
The city’s quarantine policy has been in place since last year, but it’s only now being scrutinized by the banking community after an outbreak linked to a local gym spread among financial workers and employees of schools that cater to children of affluent expatriates. The episode comes at a time of elevated uncertainty over Hong Kong’s status as a premier financial hub, after a nearly yearlong Chinese government clampdown on freedoms in the former British colony.
The international investment bank executive said his firm is particularly worried about the prospect of losing access to critical trading employees, or even entire teams, if they or their family members come in contact with people who test positive. Several global banks have asked a higher proportion of their Hong Kong traders to work from home to reduce their risk of being sent to government quarantine.
In Singapore, close contacts go to centralized facilities only if their homes are deemed unsuitable for isolation. In Japan, the government advises close contacts who test negative to stay at home for 14 days.
Hong Kong’s rules for inbound travelers are also more strict than other financial hubs. Residents entering the city from outside China must spend 21 days isolated in designated hotels. Shanghai’s quarantine is only 14 days, while residents returning to Singapore can quarantine at home, subject to monitoring.
The difficulties around travel contributed to James Paradise’s decision to retire as Goldman Sachs Group Inc.’s Hong Kong-based co-president of Asia Pacific outside of Japan at the end of last year.
Strict testing and cleaning requirements in Hong Kong have left financial firms exposed to sudden changes in their ability to access offices in the city. HSBC Holdings Plc this week closed its iconic building in central Hong Kong until further notice. Employees who stayed in the office for more than two hours between March 3 and 16 are subject to mandatory testing.
Hong Kong’s strict approach has arguably helped the city contain its total Covid cases at around 11,000, far below levels in other major trading hubs including Singapore. Unlike New York City and London, Hong Kong has avoided citywide lockdowns throughout the pandemic.
Still, some critics in the financial community have called Hong Kong’s quarantine rules overly burdensome and at times inconsistent. Others have said the government needs to improve communication of its policies, including how it determines close contacts, and figure out better ways to accommodate children and others with special needs. One oft-repeated request from bankers is that there should be a clear plan in place for how quarantine policies will evolve as more residents get vaccinated.
“What we are really asking for is guidelines on the criteria being used for quarantining and transparency over decision making,” Joseph said. “Without that, it makes it very hard to engage in secure business planning. Hong Kong is a city based on connectivity and transparency is a crucial aspect of what makes this city tick.”
Requests for comment to the office of Hong Kong’s Chief Secretary for Administration after regular business hours weren’t immediately returned.
Chief Executive Carrie Lam said this week that the government would explore whether there was room for virus-related social distancing measures to be relaxed for people who were vaccinated. Hong Kong has expanded vaccine access to residents aged 30 or older, meaning about 70% of the city’s population of 7.5 million is now eligible. Bookings for the shots soared on Tuesday, the first day of expanded access.
Hong Kong has also held preliminary talks with China on easing some travel restrictions for people who received two vaccine doses. Meanwhile, Lam has played down concerns about children potentially being separated from parents. In most cases, health officials allow minors sent to quarantine to be accompanied by their parents or another caregiver.
It’s unclear whether quarantine angst will have a long-lasting impact on Hong Kong’s role as a financial hub as more of the city’s population gets vaccinated. Even as this month’s outbreak jolted bankers, the city has continued to enjoy a healthy pipeline of initial public offerings and resilient stock market. Hong Kong listings have raised almost $14 billion in 2021, up 655% from a year earlier.
One senior banker at a European financial company who has lived in Hong Kong for more than 15 years said she has no concrete plans to leave, even though the quarantine policy caused her to float the prospect with her husband. While her family hasn’t had to go into quarantine, some of her children’s schoolmates at the Woodland Montessori Academy in the affluent Midlevels area were ordered there this week.
Others in the industry are less sure about staying. The chief technology officer of a local fintech company said his frustrations with Hong Kong have been building since 2019, when pro-democracy protests shuttered some schools for weeks at a time. In-person classes were then suspended for much of last year because of the pandemic, even as schools in Singapore mostly remained open. The CTO said he’s now seriously considering a move out of Hong Kong to avoid the prospect of his kids ending up in quarantine.
