(Bloomberg) -- Hong Kong’s stringent travel restrictions are now the biggest challenge for American businesses in the city, overtaking other hot-button issues like U.S.-China relations and political uncertainty.
The American Chamber of Commerce in Hong Kong said 60% of respondents in its 2022 business sentiment survey ranked international travel restrictions as their top concern. Some 44% highlighted U.S.-China relations and 32% said political uncertainty were their main challenge.
In last year’s report, 65.4% of respondents selected U.S.-China relations as the biggest concern.
“Hong Kong still holds business opportunities but an array of issues, especially draconian travel restrictions and worsening US-China relations, weigh on sentiment,” AmCham said in its report.
The survey -- conducted before Hong Kong’s omicron outbreak prompted even tighter travel and quarantine curbs -- is evidence the city’s dogged adherence to Covid Zero is denting its appeal as a global financial hub. The travel rules, which include flight bans and forcing almost all arrivals into 21 days of isolation, have contributed to an exodus of expatriates.
Many of those surveyed said the government seemed unconcerned about Hong Kong’s status as an international financial center, according to AmCham President Tara Joseph. “That’s something new and hopefully the government will respond to this,” she said Wednesday on Bloomberg TV. “We spoke to them about it yesterday, but there’s just a sense that the government doesn’t care.”
Business Costs
The latest virus controls are also hurting the outlook for an economy that only just rebounded last year after two years of contraction. While there are still many business opportunities in Hong Kong, travel restrictions are “increasingly out of step with international practice” and are weighing on sentiment, AmCham said in a statement Wednesday.
The strict quarantine rules for travelers make it difficult for head offices to operate, with about 44% of respondents saying business was affected by significant disruption. More than 30% of those surveyed said they’d had to delay new investments, while 30% struggled to fill senior executive roles.
The chamber said in October that lobbying the government about reopening its borders has been like “talking to a wall.” The survey reflected that, too, with more than half of respondents saying they feel the government is unconcerned or dismissive about business concerns.
AmCham surveyed 151 corporate representatives and 111 individual members. Other findings included:
- 44% of respondents said they are more likely to leave Hong Kong amid travel and social restrictions, 26% of companies are more likely to depart
- More than 8 in 10 businesses have been impacted by Hong Kong’s national security law, such as lower staff morale and losing employees who have emigrated
- Singapore is overwhelmingly expected to be a major beneficiary if talent leaves, with 80% of respondents selecting the city-state as the greatest competitive threat to Hong Kong
(Updates with comments in paragraph six.)
©2022 Bloomberg L.P.
Advertisement