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How can Hong Kong reverse this economic downturn? What is our path forward? The pandemic’s economic toll is most evident in the retail, restaurant and hotel industries.

THE world has moved on. Many have packed up and left. Those of us still living in Hong Kong seem to fall easily into a mental coma induced by years of Covid-19 restrictions.

With its border to mainland China – and everywhere else – still partly shut, this island city can feel suffocating.

But pessimism is not in our nature. Now that we’ve chosen to stay, it is time to ask more constructive questions.

How can Hong Kong reverse this economic downturn? What is our path forward?

The pandemic’s economic toll is most evident in the retail, restaurant and hotel industries.

Three years ago, they employed more than 600,000 people, or about 15% of Hong Kong’s labour force.

Before Covid-19, mainland Chinese tourists accounted for about one-third of total retail sales, a testament to the open economy that Hong Kong once was.

That tourist dollar evaporated when China closed its borders in March 2020.

Employment in the sectors has fallen by more than 20% from the 2019 peak. The pandemic hits jobs in the retail business hard.

So it is encouraging that Hong Kong is easing travel restrictions, and visitors are starting to return to the city.

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All of the recent policy moves are incremental, but they add up.

For inbound travelers, Hong Kong is ending a five-day flight ban for airlines that carried passengers infected with Covid-19.

It convinced the Shenzhen government to raise its daily quota for quarantine hotel rooms from 1,300 to 2,000, to ease the busiest border crossing into mainland China.

While the seven-day hotel quarantine remains in place for now, starting in August, Hong Kong will provide 23,000 quarantine rooms daily, up from 12,500 currently, to accommodate more travelers.

That’s about one quarter of the city’s hotel capacity.

While travel is by no means back to the pre-pandemic level, visitors are coming to Hong Kong again.

So consider the following policy proposition: With China sticking with Covid-zero and the border reopening nowhere in sight, can Hong Kong serve as the meeting point for China-related businesses, and a more gentle quarantine hub for those who want to go to the mainland?

In the last month and a half, I have been busy meeting visitors from Shanghai and New York.

Mainland company executives have been coming on work trips since early June – in fact, quite a few fled Shanghai as soon as Covid lockdowns eased. Some global asset managers bit the bullet as well. After all, Zoom meetings can only go so far.

As for overseas Chinese who have not seen their folks back home for years, Hong Kong makes a logical transition, too.

Flights to China are rare, expensive and can be cancelled at any minute.

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