Hong Kong has been plagued by a “double whammy” in terms of politics and health since 2019. On the political front, the city has been subjected to Western sanctions against the backdrop of Sino-US tensions, and its status as Asia’s international financial center seems to be losing ground to that of Singapore, which is in ascendancy. The isolation of the Chinese mainland from Hong Kong because of COVID-19 pandemic restrictions has also contributed to the city’s economic woes. However, as the old saying goes, a “pandemic only lasts for three years”. With the gradual relaxation of anti-pandemic restrictions on the mainland and the strained relations between China and the US easing, Hong Kong’s most difficult period is likely to be over soon, and it should prepare to enter the post-pandemic era.
On Nov 11, the State Council’s Joint Prevention and Control Mechanism released 20 measures to optimize the prevention and control of the pandemic, including the new quarantine requirement that all passengers arriving from overseas must undergo five days of centralized quarantine plus three days of home- or hotel-based isolation, instead of the current protocol of seven days of centralized isolation plus three days of self-isolation. Inbound travelers will no longer be placed into isolation again after completing the required quarantine periods at their first points of entry. The new quarantine measures are more pragmatic, giving more weight to the economy and people’s livelihoods. Meanwhile, on Nov 10, Cao Xuetao, vice-minister of the National Health Commission of the People’s Republic of China, said the central government supported Hong Kong’s science-based adjustments to its anti-pandemic measures aimed at further opening up the city to the mainland and the world. This was the first time since the COVID-19 outbreak that a central government official has made such a positive comment on Hong Kong’s pandemic prevention and control policy, and to a certain extent, it reveals that the mainland’s pandemic prevention and control strategy is changing. In addition, at a news conference held by the National Health Commission on Nov 12, in response to questions from Hong Kong reporters on whether centralized quarantine would be abolished and whether a full liberalization was in the pipeline, the commission responded that it “would not rule out further optimization and adjustment of China’s quarantine measures”, and that it would “take small steps without stopping”. This suggests that the mainland’s pandemic prevention and control policy will be eased further. It is conceivable that quarantine-free travel between Hong Kong and the mainland is no longer a distant prospect.
With its unique legal environment and location, Hong Kong will still be able to play a central role in connecting the Chinese mainland to the rest of the world and return to prosperity
Quarantine-free travel between Hong Kong and the mainland will not only benefit a large number of residents who need to travel frequently between the two places, but also boost the confidence of foreign investors in the mainland’s business environment. The relaxation of the mainland’s pandemic prevention and control policy has been well-received, as evidenced by the immediate rebound in the stock markets, with Hong Kong stocks outperforming A-shares so far. As early as a week ago, the Hang Seng Index surged by more than 5 percent in a single day merely on the hearsay that the mainland’s pandemic prevention policy is to be eased soon. After the official release of the 20 new measures on Nov 11, the Hang Seng Index jumped by more than 7 percent. At the same time, the US dollar to offshore Chinese yuan rate also rose sharply, regaining the significant level of 7.1. All these signs show that foreign investors in Hong Kong are confident that the market will recover after the mainland relaxes its anti-pandemic policy, and that the recovery of Hong Kong’s economy and financial markets will depend on the restoration of the foreign investors’ confidence.
Meanwhile, after the meeting between US President Joe Biden and Chinese President Xi Jinping on the sidelines of the recent G20 summit, improvement in the strained Sino-US relations may also be in sight. In fact, as early as September, China increased its holdings of US debt again, a sign that the diplomatic deadlock between the US and China will not last too long and will probably ease gradually.
With so many signs flagging the dawn of a post-pandemic era, Hong Kong should be prepared to resume its role as a bridge between China and the rest of the world. Although the city’s economy and international standing have been devastated by the pandemic over the past three years, its strong links with the mainland and the rest of the world, particularly Europe and the US, remain a unique advantage. The rule of law, on which Hong Kong’s prosperity has always depended, has not been weakened, but rather, the city’s institutional framework has been further improved with the support of the central authorities. For example, the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region (HKSAR) (REJ Arrangement) in 2019, the Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the HKSAR (Arrangement) in 2020, the Record of Meeting Concerning the Mutual Recognition of and Assistance to Insolvency Proceedings between the courts of the Mainland and the Hong Kong Special Administrative Region in 2021, and the Arrangement on Establishment of the International Organization for Mediation Preparatory Office in the Hong Kong Special Administrative Region in 2022. These concrete measures have further enriched Hong Kong’s rule-of-law environment and provided institutional safeguards for the further enhancement of Hong Kong’s business environment in the post-pandemic era.
While Singapore has stolen the limelight from Hong Kong over the past three years, there is reason to believe that as the mainland further eases its pandemic prevention policy, Hong Kong, with its unique legal environment and location, will still be able to play a central role in connecting the Chinese mainland to the rest of the world and return to prosperity.
The author is a member of China Retold and an EMPA candidate, Tsinghua University.
The views do not necessarily reflect those of China Daily.