Hong Kong’s Unsustainable COVID Zero Policy is Pushing Businesses to Singapore
Pexels, Photographer: Jimmy Chan
Hong Kong and Singapore, two Asian financial hubs known for rapid economic development in the 20th century, always maintained distinct identities. Historically, Hong Kong has been the more lenient of the two cities, with financial laws that allow for more international control and have a basis in common law. This makes the transition of business between the special administrative region and Western companies easier due to legal similarities. By contrast, Singapore has very stringent financial standards that force companies, as well as its own government, to remain transparent, politically stable and forward-thinking. It is more difficult for companies to enter the market, but the greater reward of a stable and information-saturated economic environment has attracted a wide array of international investment.
Hong Kong’s “COVID zero” approach is turning this well-known distinction between the two islands on its head. This approach aims to achieve zero infections, a feat that many countries are beginning to find is unrealistic due to COVID-19’s potentially endemic nature. The city continues to isolate itself from foreign visitors and has implemented restrictions such as rigorous contact tracing and public mask mandates in an attempt to slow down the virus. New, more infectious variants such as Delta have pushed Hong Kong even further into isolation. The Economist found that the city’s case and death counts are being underreported, in a move reminiscent of China, its hinterland. As an international financial center, it’s only natural for these standards to begin to detrimentally affect both domestic and foreign business.
Nobody can enter or leave Hong Kong, leaving people visiting for business either shut out or stranded. Those who absolutely need to visit the city are subject to three weeks of quarantine, with businesses starting to struggle as a result. The imposed restrictions make it difficult for businesses to import and export products, with the American Chamber of Commerce noting to Bloomberg that 40% of its members are considering leaving the city entirely. Physical and economic isolation in such an interconnected world will naturally lead to negative consequences, including decreasing growth and a discontented populace.
All things considered, the COVID zero strategy is simply not a realistic goal for any country or city that wants to survive. Most countries that have pursued the strategy found themselves with just as many cases, if not more, and are now abandoning it in favor of one that allows life to continue under a new normal. Global lockdowns resulted in greater economic inequality, millions of jobs lost and a mental health crisis. Maintaining restrictions reminiscent of Hong Kong is not a viable long-term strategy if we want to avoid another global recession.
Singapore was one of the first countries to realize this reality, and shifted to adopt a more pragmatic approach, to which both people and businesses are responding favorably. In a stark juxtaposition to Hong Kong, Singapore is allowing business to continue operating, opening up to foreign countries that share its strategy, and creating a new, more pragmatic standard of normal. It is moving cautiously, but deliberately; some restrictions, such as social distancing requirements, remain in place, according to the Associated Press. It also maintains comprehensive testing and contact tracing programs, as well as attempting to vaccinate the remaining 20% of its population. In this, it is attempting to strike a balance between “lives and livelihoods” as Ooi Peng Lim put it, a senior consultant for Singapore’s National Center for Infectious Diseases.
This contrast, as well as Singapore’s advancements in financial technology and status as the second busiest port in the world, is creating benefits for people and businesses alike. Some experts have projected that it will leapfrog Hong Kong as an Asian financial center, while others argue it already has, with Hong Kong’s recent issues accelerating the takeover. China’s encroachment on its political activities also threaten the rule of law that international businesses depend on to ensure optimal results. Singapore’s political stability and pragmatic approach have already become attractive enough for businesses to move to the little red dot.
Singapore is pursuing a strategy rooted in reality. Hong Kong, along with a few other countries and cities are attempting to chase an ideal long determined to be unrealistic by most countries that want to survive. Singapore’s takeover may even be inevitable or may have already happened, but if Hong Kong wants to avoid sinking further than it already has, it may want to leave its dangerous state of isolation.