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‘COVID-free’ policy dampens Hong Kong’s economy as cases rise

Hong Kong’s Fung Shing restaurant was bustling this week as customers came for one last taste of the traditional Cantonese dim sum that made it famous.

With COVID-19 restrictions reducing its results too deeply, the restaurant will close its doors permanently on Sunday, another economic victim of the pandemic.

Many fear the worst is yet to come, with Hong Kong experiencing its worst outbreak, and worry that authorities’ determination to stick to mainland China’s ‘zero tolerance’ strategy could prevent it from recovering. as a financial and tourist hub.

“While perhaps zero COVID can be achieved, there is still uncertainty about how long it will be sustained and the cost of sustaining it,” said Natixis chief economist Gary Ng.

“Hong Kong’s biggest risk in 2022 is that it could head down a path of recession, if not recession, at least slower economic growth as the world begins to normalize. “Ng said.

Hong Kong has seen banks close branches and cinemas close. The streets of the popular shopping and dining districts are lined with shops displaying “for rent” signs. Its international airport is almost devoid of travelers.

A ban on eating in after 6 p.m., imposed last month, is starving restaurants of critical dinner and banquet revenue.

New daily coronavirus cases topped 2,000 for the first time on Monday; Thursday saw 6,116 new cases reported.

With hospitals overwhelmed, the city is considering converting unoccupied hotels and even social housing into quarantine zones. But that shows no sign of backing down from mainland China’s tough policies even as the rest of the world learns to live with the coronavirus.

As part of its zero tolerance strategy, China has locked down entire cities, literally keeping people sequestered in their homes and providing them with food and supplies as they are isolated during extensive testing and contact tracing to stifle The epidemics.

But China has many cities. Hong Kong, a former British colony and semi-autonomous region of China, lacks the resources for such a comprehensive lockdown, which would shut down virtually all economic activity in the city of around 7.5 million people.

And residents of Hong Kong, which was handed over to communist China in 1997 under a “one country, two systems” approach, are used to more freedoms than mainland residents. Closings of individual buildings or city blocks have drawn heavy criticism.