HONG KONG – Hong Kong Financial Secretary Paul Chan said he is optimistic about the city’s economic prospects for this year and expects the local real estate market to rebound after the China border reopens.

Hong Kong’s exports, tourism and local service industry are all expected to rebound on China’s border reopening, and consumption in the first quarter is likely to rise significantly from a year earlier, Mr Chan wrote in his blog on Sunday.

The city’s property sector has been hit by rising global interest rates and economic weakness, with the transaction volume in the first 11 months of last year plunging 38 per cent, according to the financial secretary.

While he expected more rate hikes from the United States Federal Reserve, and Hong Kong’s interest rates to continue to climb, Mr Chan said the border reopening with China could lift general sentiment in the real estate market.

In a Facebook post on Sunday, Chief Secretary Eric Chan Kwok-ki said Hong Kong is working to resume quarantine-free travel with mainland China by as early as Jan 8.

Mr Eric Chan, the city’s No. 2 official, said quotas will be set in the first stage of the plan to limit the number of people who can travel between the city and the mainland.

“The border will be fully opened eventually, based on the operation of the first-stage scheme, and as the scale is being expanded based on conditions,” he said.

The return of mainland visitors would be a major boost to Hong Kong’s battered economy. China had kept its borders all but shut for three years and Hong Kong itself had maintained some of the world’s strictest curbs until the second half of last year.

The frequency of sea, land and air transport will be increased to meet commuting demand, and some checkpoints that had been closed will resume operations, Mr Eric Chan said in the post.

The Jan 8 date was the clearest indication yet that the Hong Kong government is aiming to restore quarantine-free, cross-border travel after a three-year hiatus due to Covid-19. Chief Executive John Lee said earlier that the border with mainland China would reopen by mid-January.

In a major step towards reopening its international borders, China will stop requiring inbound travellers to go into quarantine, also starting from Jan 8. BLOOMBERG, REUTERS