Whether Hongkong will allow customs clearance with mainland China still in doubt

Hong Kong chief Executive Carrie Lam said in a media interview before attending the Executive Council on Tuesday that the Government will only continue to exempt those industries that are of urgent necessity and related to Hong Kong’s operation, such as cross-border lorry drivers, from quarantine inspection in order to give the central government more confidence in Hong Kong’s epidemic prevention measures and resume customs clearance with Hong Kong as soon as possible.

“Most of the exemption groups will be removed,” Carrie Lam said. “Only those who are of urgent need and related to the daily operation of Hong Kong, will still be allowed to travel between the two places without quarantine. As these measures have been implemented one after another, I hope the Central government will have more confidence to allow us to clear customs.”

On the same day, the Hong Kong government announced that it would tighten the criteria for terminating quarantine for confirmed COVID-19 patients, requiring them to remain under observation for 14 days after they are discharged from hospital. The move has been criticized by pro-democracy campaigners, who say the old approach did not lead to community outbreaks and describe the government as adding disproportionate “nuisance measures” in order to secure a quarantine free customs arrangement with Mainland China.

Hong Kong has been taking the same measures as the Chinese mainland to allow passengers to travel through customs without quarantine, but there is no specific timetable for customs clearance. That has left Hong Kong in a quandary: unable to clear customs with mainland China, but still needing to maintain strict quarantine measures. Some foreign chambers of commerce in Hong Kong complain that the strict arrangement makes it difficult for them to deploy staff, or even move their offices out of the city in the long run.

When Hong Kong chief Secretary Li Ka-chiu raised the issue again on Wednesday, he did not specify which quarantine exemption groups would be removed, saying only that an announcement would be made “in the near future”.

Without details, some pro-establishment figures remain positive about the government’s plans. Hong Kong media quoted Pro-Beijing business legislator Chan Chun-ying as saying that if Hong Kong’s quarantine arrangements need to be aligned with mainland standards to achieve customs clearance, it is an effort to meet a larger goal, and it is understandable that individual industries need to tighten exemption arrangements.

The honorary chairman of the Hong Kong Chinese Manufacturers’ Association also said that since the Hong Kong Government launched the “Re-entry” scheme, few Hong Kong businessmen with mainland factories had to apply to tid for exemption from quarantine, so even the abolition of the group would have no impact.

How Hong Kong fits in with the “health code” system used by mainland China is also reportedly a factor in China’s consideration of the possibility of quantitation-free customs clearance with Hong Kong. Hong Kong’s Secretary for Innovation and Technology, Peter Yuen, said only that he would continue to review the Hong Kong version of “Health Code” and seek advice from relevant industry and anti-epidemic experts to make preparations for future customs clearance.

In the past, many foreign business associations in Hong Kong have criticized the city’s stricter COVID-19 quarantine policy than some parts of Asia, which has affected their business and may plan to reduce the number of staff stationed in the city or even move entirely to places with a more relaxed response model, such as Singapore and South Korea.

Ms. Lam reiterated Tuesday that Hong Kong has advantages as a gateway to mainland China, and that it would “greatly reduce Hong Kong’s status as an international business and financial center” if companies based in the city could not travel to China.
The current COVID-19 outbreak in Hong Kong has abated. Since September, only one local case has been recorded. The rest are imported cases. The British Chamber of Commerce Hong Kong said it would continue to communicate with the Hong Kong government “through private discussions” but did not comment directly on the government’s actions.

According to the Hong Kong government, there are several categories of people who are exempt from quarantine at present, including aircrew, government officials on duty, directors of some listed companies and foreign diplomats stationed in Hong Kong.

For persons from mainland China and Macao to Hong Kong, apart from the above groups, lorry drivers, Hong Kong residents or residents of Guangdong province who have previously declared to the Hong Kong Government through the ERE-entry or ERE-Entry schemes are exempt.

Chung Kin-wah, deputy chief executive officer of the Hong Kong Institute of Public Opinion, said on Wednesday that if Hong Kong follows domestic epidemic prevention standards, it will only lead to a lockdown. The reality is that Hong Kong is being led by the nose by China’s policies. Now, China is carrying out a “virus zero” campaign, and Hong Kong is following suit. Lam’s actions are designed to curry favor with Beijing.

‘She was partly constrained by domestic policy,’ Mr. Zhong said. And she wanted to show in Beijing, she is very cooperate with Beijing’s policy and needs, so now most of the international community, including Singapore, will lose the target to coexist with a virus, I think she don’t speak, to think about, she won’t do anything for the interests of Hong Kong, now she is taking the interests of the people of Hong Kong, as a reward to Beijing please.

Foreign investors are concerned that Hong Kong’s status as a financial center will be affected by the long-term implementation of strict immigration quarantine measures. U.S. companies have lobbied the Hong Kong government to ease restrictions on entry and exit, but have not received a response. The Asian Securities Industry and Financial Markets Association (ASIFMA), whose members include BlackRock, Goldman Sachs and JPMorgan Chase, on Monday urged the government to gradually ease travel restrictions.

Carrie Lam said on Tuesday that the government’s current strategy was to focus on customs clearance with the mainland, as failure to enter the mainland would greatly undermine Hong Kong’s status as an international financial center and its attractiveness as a business hub.

Many of Hong Kong’s epidemic prevention policies show that it is keeping pace with China. In order to secure customs clearance with the mainland, the conditions for discharged COVID-19 patients are the same as those on the mainland. The Hong Kong government on Tuesday tightened the 14-day quarantine imposed on COVID-19 patients in China last year, requiring all patients to be sent to designated quarantine sites for 14 days of quarantine and health monitoring in a “round-the-clock management” and peer-to-peer approach.

Separately, China has introduced a third dose of inactivated COVID-19 vaccine for people aged 18 or older this month, and the Center for Health Protection said on Monday that an expert advisory panel is discussing the third dose. Ho Bae-leung, director of the Centre for Infectious and Infectious Diseases at hkU, said earlier that Hong Kong should also consider catching up on its vaccination policy to avoid being left behind in customs clearance with the mainland.