European firms mull moving staff from Hong Kong amid its 'Covid-19-zero' strategy: Chamber

The European Chamber of Commerce in Hong Kong in August issued an unprecedented open letter saying Chief Executive Carrie Lam's pandemic controls threatened the city's standing as a global finance hub. PHOTO: REUTERS

HONG KONG (BLOOMBERG) - European companies are discussing relocating staff from Hong Kong, the region's local chamber of commerce said, as the city commits to a "Covid-19-zero" strategy that almost every country apart from China is abandoning.

Hong Kong's strict quarantine measures have led many businesses to consider restructuring at least part of their operations to places such as Singapore, Mr Frederik Gollob, chairman of the European Chamber of Commerce in Hong Kong, said on Wednesday (Oct 6) on Bloomberg Television.

"You can assume that in most boardrooms across Europe and Hong Kong, this is a subject of discussion," he said. "You can't really avoid it, looking at the restrictions."

His comments come a day after Chief Executive Carrie Lam said Hong Kong's ties with mainland China were more important than the international business and global travel connections that helped cement the city's status as an Asian financial centre. Ms Lam was expected to discuss her response to the Covid-19 pandemic in her annual policy address on Wednesday.

The European Union chamber - an umbrella group that represents countries, including France, Germany and Spain - in August issued an unprecedented open letter warning Ms Lam that her pandemic controls threatened Hong Kong's standing as a global finance hub.

An American Camber of Commerce survey earlier this year found that more than 40 per cent of members said they might leave the city.

Despite recording no local coronavirus infections in more than a month, Hong Kong requires returning residents to spend as long as 21 days in hotel quarantine, even if they are fully vaccinated. That has frustrated foreign business chambers and residents and contributed - alongside China's imposition of a national security law - to a record outflow of residents.

"What we do not see is a massive outflow of companies out of Hong Kong," Mr Gollob said. "But we do see the tendency to restructure either functions, parts of your teams, teams or, in some cases, entire companies to other locations in Asia."

Still, Mr Gollob said it was equally important for EU businesses in Hong Kong to be able to travel to mainland China, a major trading partner for the bloc.

The business community is looking forward to seeing measures that will lead to the swift opening of the border, he said.

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