Hong Kong to consider loosening COVID-19 restrictions
Hong Kong could further loosen quarantine times today to less than 14 days as the region copes with the Omicron variant’s spread.
However, the restrictive policies Hong Kong is implementing to fight off the new variant could lead to economic contraction. Chinese finance executives and diplomats have argued that prolonged quarantines—and generally strict pandemic measures on travel—have reduced economic competitiveness in Hong Kong.
The European Chamber of Commerce warned last week that Hong Kong’s restrictive zero-COVID policies have reduced the desirability of doing business in the region. The restrictions have slowed down domestic demand, manufacturing, and supply.
The pandemic restrictions disrupted manufacturing and supply as well, making other nations near China more attractive. In January, the Hong Kong PMI rate fell from 50.8 percent to 48.9 percent. Firms in the private sector—including in mainland China—have reduced their quantity of purchases, which has resulted in the reduction of inventory levels.
Hong Kong’s economy cannot afford to lose momentum at this time. The government of Hong Kong has two choices, to reduce requirements for economic growth, or to commit to the zero-COVID strategy and risk further economic contraction in the future.
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