Chairman's Message

Dear Members

“It’s tough to make predictions, especially about the future.” Thus spoke Yogi Berra, the American baseball player who was as famous for his malapropisms as he was for his brilliance on the field. “It’s like déjà vu all over again” was another famous Yogi-ism.

I recalled both these pithy observations as I sat down to write this month’s magazine statement and find that I, like the rest of Hong Kong, am still obsessing about COVID.

I look forward to the magazine statement that no longer needs to lead with a commentary on border and other restrictions. Perhaps we are making progress with the easing that was announced for 1st May but concerns are still very much “front-of-mind”.

Today, as I write, it is true that the level of daily infection is (for Hong Kong, at least) high – at around 1,800 cases. However, the total number of patients in hospital amounts to 558 with somewhere between 60-90 being admitted on

a daily basis (and around the same number being discharged). Of those patients in hospital 12 are in a serious condition and 12 are in a critical condition. Only three are receiving intensive care. The Hospital Authority itself notes that the current level of hospitalisations has “not caused serious impact to the service of public hospitals”. The functioning operation of our healthcare system is not under threat.

After a certain level of community immunity has been achieved – through a combination of vaccinations and past infections – the experts have held that social and border restrictions are only needed to protect the healthcare system. There comes a point when the balance of protecting lives over protecting livelihoods tips in favour of the latter. Anyone who has taken a tour of shopping centres and wet markets beyond Central can attest to the struggle of many shopkeepers and restaurateurs simply to get by.

So why do we persist with our current COVID arrangements?

At the Chamber, we have continued to lobby, in particular, for travel in and out of the SAR to be a lot more like the normal operating procedure in most of the rest of the world. We want home quarantine at least and no quarantine at best – understanding, of course, that travellers must be able to present the requisite vaccination records (and PCR test results if absolutely necessary).

We also stand up for our international school system. One of the great attractions of making a career move to Hong Kong is the quality of our international schools. Children get a first-class international education in Hong Kong. But they need to be in the classroom and parents need to be certain that home schooling will not be imposed on a whim.

It’s still reading like deja vu all over again!

I am pleased to say these arrangements are also front of mind for more than the international chambers. Hong Kong business organisations that twelve months ago were pushing the Government to prioritise an opening of the mainland boundary now recognise that this is probably some way off. I hear very few voices today saying anything other than that international borders need to open now. After all, we waited almost six months in 2021 with zero COVID cases and the boundary remained subject to strict quarantine restrictions. We can stay hermetically sealed only for so long.

A small delegation from the Chamber had the opportunity, at the start of June, to put our case for opening the international borders to a group from the China Liaison Office in a meeting which lasted two hours. I have to say I took some heart from this. The CLO group asked many searching questions and were concerned to understand the impact on our membership of current COVID policies. They were in listening and understanding mode.

Our frustration, as we said at the start of our meeting, is that we have bags of confidence in the business opportunities for Hong Kong but we find these increasingly difficult to action. The 14th Five Year Plan and last year’s Chief Executive Policy Address set out an ambitious and exciting programme for the future with a clear focus on the GBA and new areas of business opportunity whilst still keeping and promoting the core competencies of financial services, real estate and logistics.

We made four very clear points:

- There has been a serious loss of talent in the first six months of the year which has been almost impossible to replace; we are hopeful that people will return but the longer they are away the less likely this seems and the more expensive it becomes;

- Head Offices have not visited Hong Kong, in some cases, for more than three years; we are seeing investment priorities move away to those regions where progress is more immediate and tangible;

- anyone running a regional business in Hong Kong has been severely challenged in the last half-year as countries and territories elsewhere have re-opened; regional heads have been obliged to move elsewhere so that they can freely travel around their business operations; and

- we need to ensure a clear message that our schools will remain open unless of course there is really a necessity to protect the children and teachers.

Underscoring all of these messages is the importance of shifting policy away from protecting lives to promoting livelihoods.

I finished the meeting by explaining that Hong Kong was at something of an inflection point over this summer. There is a role for Hong Kong solely as an offshore service centre for the mainland. But that is NOT what any of us want and it is NOT how any of us have invested in and run our businesses to date. We see Hong Kong both as a super-connector for the mainland AND as a regional trade and investment hub. But borders need to open.

There is now a great opportunity to shift gear.

Since the last edition of the magazine, Hong Kong has held its Chief Executive election and determined the make-up of the new administration.

John Lee’s manifesto is short and to the point. There is, however, plenty of space given up to the role and importance of international business. The Foreword alone refers to Hong Kong’s

- “global inter-connectivity”;

- “its position as a leading international city”;

- continuing to be “inclusive, diverse and open towards the world”;

- “market-oriented and international business environment”;

- “connecting our country and the rest of the world” and being “the best entry point for global business into the mainland market”.

We have sometimes claimed (although, to be honest, never fully verified) that the totality of BritCham’s members in Hong Kong is the largest collection of private sector employers and contributors to the economy through investment and taxes. It is really pleasing to see the role of international business acknowledged in the Chief Executive-Elect’s manifesto.

At the Chamber, we have a plan to connect with the new Administration and will over the course of the rest of this year position ourselves as a thought-leader for business in Hong Kong.

Indeed, we have already started and submitted some first thoughts on the manifesto in a letter which you can find on our website. We have in recent weeks also submitted our first thoughts on how the Administration might support the enormous infrastructure and construction plan, set out in the 2021 Policy Address, through the deployment of “Public-Private-Partnerships” (PPP). You can find this submission on our website.

One of the questions I have been asked, particularly on my visits to the UK, has been whether we might appeal the so-called “three-year rule” for Hong Kong Permanent Residents. This states that you will give up your PR if you have been absent from Hong Kong for more than three years. We have worked with both the CEDB and the Immigration Bureau to understand the parameters better.

In summary, there is no scope to relax the three-year rule but there is scope to determine when the clock starts to tick. This is not necessarily at the point when you leave Hong Kong. You can find the email through this link.

As we come to the half-year point of 2022 and welcome and congratulate the new Administration, I am hopeful for our future. Hong Kong has been through some really difficult times over the last three years but the resilience of its institutions and the enterprise of its people have always shone through. I do think we have the foundations for a new and determined sense of direction. If you were in Hong Kong in 2003 you will recall how business activity grew exponentially when the SARS epidemic was finally over and restrictions lifted.

We certainly need that sense of direction. Without it we might end up thinking like Yogi Berra again: “If you don’t know where you’re going you’ll end up someplace else”

Peter Burnett, OBE Chairman, The British Chamber of Commerce in Hong Kong