Hong Kong’s painful but now fleeting experience with the virus could nudge China away from its ‘zero Covid’ stance
https://asiatimes.com/-by Jeff Pao
Government workers on the streets of Hong Kong. Image: Getty / NKTV Screengrab
Hong Kong has seen a strong rebound of economic activity just a few days after it announced plans to shorten quarantine rules and reopen facilities, potentially providing China a pathway away from its “dynamic zero infections” policy and towards “living with the virus.”
Online searches for residential properties have increased by 30% in recent days while travel agencies have reportedly received 80% more inquiries from overseas from Hong Kong people who planned to return to the city in April. Hong Kong’s retail and tourism sectors also plan to increase their headcounts to serve international tourists this summer.
Many mainland Chinese cities are now struggling to fulfill the central government’s “dynamic zero infections” policy while containing the impact of lockdown measures on their economies. During a seven-day lockdown last week, Shenzhen may have suffered an economic loss of up to 60 billion yuan (US$9.4 billion), some media reports suggested.
Shanghai, the mainland’s main financial hub with a population of 25 million, has so far opted against locking down the entire city despite a recent surge in Covid infections. Shanghai’s Covid cases jumped more than 60% in a single day to 1,600 on Friday, raising concerns authorities may ramp up restrictions into a city-wide lockdown.
Reports have suggested some residents in targeted locked down areas of the city are struggling to secure fresh food, while access to medical care is declining as hospitals prioritize Covid patients and shut basic out-patient services.
While Chinese authorities are still imposing sweeping lockdowns in some areas of the country – residents in the entire province of Jilin, in China’s northeast, are confined to their homes – Omicron’s fast spread has prompted economic and industrial hubs to take more targeted approaches in recent weeks.
Hong Kong’s recent shift from zero tolerance to living with the virus could provide Beijing with a guide path on how to deal with its outbreaks. Since the fifth-epidemic wave broke out in Hong Kong last December, it has infected more than one million people and killed 5,000, forcing the special administrative region to give up its “zero Covid” policy in mid-March.
That marks a significant shift. In mid-February, Chinese President Xi Jinping ordered Hong Kong to make epidemic control its top priority. Due to a lack of rapid test kits and unclear policies about home quarantine, several Covid patients with mild symptoms flocked to public hospitals, putting severe strain on the city’s medical system.
Tens of thousands of people, including many foreign professionals, fled the city due to the tightening anti-epidemic rules, which have been imposed while much of the world is dropping their social-distancing measures. With the surge in cases, Beijing later accepted that Hong Kong could not implement a zero-tolerance policy as capital and talent fled the financial hub.
On Monday, Hong Kong unveiled a sweeping three-month road map to relax its Covid rules, putting the city more in trend with the West and less with the mainland. Quarantine time for Hong Kong residents who return to the city will be halved from 14 to seven days from April 1 while entertainment premises will reopen step-by-step from April 20.
Those announcements have rapidly restored confidence. About 30% more people have searched for residential apartments since the government announced on Monday it would relax anti-epidemic rules, Sammy Po Siu-ming, chief executive of Midland Realty’s residential division, asserted on Wednesday. Homeowners have also enjoyed more bargaining power due to an improvement in market sentiment, Po said.
He predicted the number of property transactions would surge by about 10% in March from last month and increase in April and May.
Centaline Property Agency executive director Louis Chan said many homebuyers had suspended their purchase plans earlier this year due to the virus outbreaks. But Chan said many of them would return to the markets after social-distancing measures were eased from April 20. He said property developers would soon launch new marketing campaigns, which he predicted would further improve market sentiment.
A spokesperson of Wing On Travel, a local travel agency, said the company received 80% more air ticket and hotel room inquiries from overseas Hong Kong people who planned to return to the city from next month as they would only be required to quarantine at hotels for seven not 14 days.
Tommy Tam Kwong-shun, chairman of the Society of IATA Passenger Agents, an industry group representing travel agents, said a large number of Hong Kong emigrants, businessmen and students would return from the United Kingdom, Canada, Australia and New Zealand when direct flight services resumed on April 1. Tam said airlines and hotels could not meet the rising demand due to their Covid-reduced staffing and operations.
Hong Kong had implemented some of the world’s toughest anti-Covid measures, including a 21-day quarantine requirement for arrivals, since early 2021 but finally failed to stop fast-spreading Omicron outbreaks that caused the city to have the highest death rate worldwide in recent weeks. At the same time, economic activities slowed as the city could not resume quarantine-free travel with the mainland.
Opening the border may not happen any time soon, though. Last week, Shenzhen was locked down for one week after 400 cases were reported since mid-February. Many Shenzhen residents blamed neighboring Hong Kong for failing to contain the virus while others raised concerns about the impact of lockdowns on the industrial city’s economy.
A columnist surnamed Xu wrote that Shenzhen’s external trade amounted to 8.4 billion yuan (US$1.3 billion) per day, meaning that the city could suffer an economic loss of up to 58.6 billion yuan during the one-week lockdown. Xu wrote that his estimated figure excluded other losses caused by the closure of shops and companies.
The article was widely circulated on China’s internet while Xu’s figures were mentioned by many other writers. Shanghai now faces a similarly tough health-0ver-economy choice as the number of infections keeps rising despite targeted lockdowns that have restricted people’s mobility and sealed off high-risk areas but not yet locked down the entire city.
Medical experts are signaling to policymakers that Omicron is not as severe as previous variants like Delta. Jiang Rongmeng, chief physician at Beijing Ditan Hospital, said in an interview that Omicron symptoms were much milder than those of seasonal influenza and similar to the common cold. Jiang said his hospital had received 400 Covid patients, none of whom were seriously ill or had fevers for over three days.
Jiang said most Covid patients could recover within five days and that he agreed with the government’s decision to allow recovered patients to self-isolate at home instead of in quarantine camps. Whether Beijing takes more cues from Hong Kong’s “living with the virus” shift is yet to be seen but will be crucial for China’s and the world’s economy.