HONG KONG: THE RETURN TO “NORMAL”

Hong Kong has lifted its arrival restrictions completely, more than three years after the first cases of COVID-19 emerged and the first measures to combat the pandemic.

At the same time, China has just opened its border with Hong Kong, which has remained closed since January 2019. This decision is accompanied by the acceleration in China of the withdrawal of strict rules against COVID-19 that have hit and slowed its economic growth.

The opening means the resumption of quarantine-free travel between Hong Kong’s financial hub and mainland China, albeit in a “gradual and orderly” manner according to local authorities.

China and Hong Kong are opening their doors to the rest of the world, welcoming international travelers and returning residents without quarantine for the first time since the beginning of the pandemic.

Without ever really imposing a city-wide lockdown, Hong Kong closely followed China’s “zero infection” policy until mid-2022, when it began easing restrictions and reducing quarantine measures.

The former British colony has now abandoned all its COVID-19 rules, with the exception of wearing a mask, which remains mandatory.

THE RENEWED OPTIMISM OF THE VARIOUS ECONOMIC ACTORS

Hong Kong, whose economy has been largely impacted since 2019, is waiting with undisguised impatience for the resumption of flows at its border. Before the pandemic, mainlanders accounted for about three-quarters of arrivals in Hong Kong.

In terms of attracting foreign investment and talent, observers insist that the signal sent by Beijing will have a very positive effect.

Travelers have already begun to flock to the borders of mainland China and many Chinese have also planned to resume travel abroad and Hong Kong in particular.

Investor confidence is on the rise and the first Hong Kong economic indicators show a new dynamic.

China’s policy change has been welcomed by the markets, and the main stock markets have been trading higher in recent days.

HONG KONG, AN ESSENTIAL GATEWAY FOR THE CHINESE MARKET

Hong Kong still appears among the top three countries in the ranking of investment flows to China. However, very few investments made in China from Hong Kong have a purely Hong Kong origin. A large part of these investments only “pass” through Hong Kong and come from other regions of the world (USA, EU, South America…).

Based on this observation, in the context of investments made in China, the opening of a Hong Kong company still appears today as an essential step. And if the last three years have taught us caution, as the region has undergone major changes, it is a safe bet that Hong Kong’s geographical location will allow it to maintain for a while an unparalleled economic dynamism and its nickname of “Asian New York”.

Ginestié Magellan Paley-Vincent, France, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact france@transatlanticlaw.com

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