Hong Kong tries to end Covid-19 without nightmare-scenario lockdown

Pressure is rising on the government to contain the outbreak, the city's worst since the pandemic began. PHOTO: EPA-EFE

HONG KONG (BLOOMBERG) - As Hong Kong's most senior officials quash speculation the city will be locked down to contain a rapidly escalating Omicron outbreak, a picture is emerging of what actions the government will take instead.

Parts of the city could be sealed off when cases flare until residents have tested negative, according to officials and advisers.

The size may range from single buildings to larger areas, while the length of these mini-lockdowns would vary.

Off the table, according to the government, is a scenario where residents are forced to mostly stay in their homes for weeks on end, as seen in cities from Xi'an to Melbourne.

Official rhetoric on the impracticality of a citywide lockdown has grown stronger amid concern that only such a drastic measure would be sufficient to bring case numbers down to zero.

Hong Kong's leader Carrie Lam on Tuesday (Feb 15) said the government has "no plans whatsoever to impose a complete, wholesale lockdown".

Widespread distrust of the government among the city's 7.4 million inhabitants means there is plenty of skepticism that officials will keep their word.

Beijing's strict enforcement of national security laws since June 2020 has led to the arrest of dozens of opposition lawmakers, journalists and pro-democracy activists.

In January, Mrs Lam said secondary schools would remain open, only for the government to announce their closure less than a week later.

Whatever the government's intentions, there's little doubt a citywide lockdown would cause immense damage to Hong Kong's economy, businesses and livelihoods, according to analysts, business leaders and politicians interviewed for this story.

Even just implementing such a measure would be virtually impossible due to a lack of manpower, and would risk inflaming tensions between the police and residents less than three years after protests pitted them against each other.

"When the word lockdown is used, people assume it's going to be China-style but Hong Kong can't do what China has done - it's physically not possible," said Mr Bernard Chan, a financier and convener of Lam's advisory Executive Council.

"We have a lot of opinion leaders saying we should follow a lockdown. All these unnecessary comments made by various people are confusing, and when people get confused, you create unnecessary panic."

Pressure is rising on the government to contain the outbreak, the city's worst since the pandemic began.

Cases are mushrooming as omicron blows holes in the city's anti-Covid measures. Daily infections topped 2,000 on Monday for the first time, with another 1,619 reported Tuesday. The healthcare system is overloaded, with thousands awaiting hospitalisation, isolation facilities are full and deaths are starting to climb.

Hong Kong is among the last places on earth refusing to live with Covid-19, even as omicron makes that strategy increasingly difficult and costly.

People queue for the Covid-19 testing in Hong Kong on Feb 12, 2022. PHOTO: AFP

Despite the explosion in cases, Beijing has made it clear Hong Kong has no choice but to stick to the Covid-Zero policy that's seen the city isolate itself from the world for much of the past two years.

Air travel is virtually non-existent in the once bustling travel hub, with inbound flights banned from countries including the United States and Britain, while the border with mainland China is closed.

Officials are rolling out tougher measures.

Gatherings of more than two people in public are banned, while a maximum of two households can mix in private. Schools are shut, restaurants can't offer dine-in services after 6pm, while soon only people who can prove they have been vaccinated will be allowed into venues ranging from shopping malls to churches and hair salons.

As cases spread, the government is adopting a mass testing approach partly based on sewage samples.

Last month, officials locked down blocks of a public housing estate for a number of days, confining thousands to their apartments while they were tested. Earlier this month, the 20,000-strong community of Discovery Bay - home to many expat financial-industry professionals - was issued with mandatory testing orders.

Pursuing such a strategy makes more sense than locking down the city, according to Mr Ronny Tong, a lawyer and member of the Executive Council.

"A total lockdown of the entire Hong Kong territory would not be feasible and would do great harm to our status as an international financial centre," Mr Tong said. "But would there be a district lockdown, where there is an explosion of cases, or a particular area or block of buildings? That is likely."

Going further in Hong Kong could lead to a humanitarian crisis: the city would quickly run out of food, health-care resources and manpower, said Ms Pamela Mak, president of Hong Kong Small and Medium Enterprises Association.

The poorest residents live in tiny spaces with shared kitchens and refrigerators that are too small to stock up on supplies. The economic pain would be severe.

Businesses in the services industry would go under, unemployment would spike and the economy would likely enter another recession, said Mr Lloyd Chan, an economist at Oxford Economics.

Enforcing a large-scale confinement would also be logistically difficult: Hong Kong has only about 33,000 police officers and 4,730 civilian officers. Deploying the People's Liberation Army would be risky for Beijing just as President Xi Jinping prepares to seek a third term.

The economy is already under strain.

People lie in hospital beds outside Caritas Medical Centre in Hong Kong on Feb 15, 2022. PHOTO: AFP

Fitch Ratings last week cut its 2022 growth forecast for the city, saying the delayed pandemic recovery makes Hong Kong among the weakest of the 120 economies it tracks.

Even if Hong Kong limits lockdowns to neighborhoods, the city would struggle to achieve its goal of Covid Zero due to a lack of quarantine venues and real-time tracking, said Mr Michael Tien, a lawmaker and a Hong Kong deputy to China's National People's Congress.

"Hong Kong can decide to lock down the city, but the economy will be over and it may not even achieve Covid Zero," said Mr Tien. "It's slightly better if it locks down districts, but then you need enough isolation facilities and a tracking system. Do you have that?"

The government is planning to convert 44 hotels used to quarantine arrivals into isolation centres, Sing Tao reported on Tuesday, citing unidentified people.

The city has also reached out to the mainland for help with testing, with Chief Secretary John Lee leading a delegation to neighbouring Shenzhen on the weekend. Adding real-time tracking to the city's contact-tracing app is an additional measure Hong Kong can take.

Yet this would be a sensitive issue in a city where pro-democracy protesters wore masks, destroyed CCTV cameras, tore down so-called smart lampposts and used umbrellas to evade detection by authorities.

"We should have a tracing and tracking system on our device," said Mr Jeffrey Lam, a lawmaker and Executive Council member. "This is something that we ought to improve as soon as possible. Omicron is spreading so fast."

Some businesses with a regional or global focus have had enough.

Pernod Ricard has asked top executives from its Hong Kong office to temporarily relocate outside the city, the Financial Times reported on Tuesday. That comes after the Mandarin Oriental hotel group asked senior executives to leave the city for now because of virus curbs, according to the FT.

The city's lack of a clear endgame troubles residents, who worry that even if Hong Kong succeeds in bringing cases down, this may only mean tighter restrictions to prevent future flare ups and maintain Covid Zero.

"If once we're over this wave Hong Kong doubles down on Zero Covid, then we know this has nothing to do with health and all to do with politics," said Jefferies Group equity strategist Simon Powell.

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