China is searching for new ways to entice foreign investment in Hong Kong as the city’s economy has struggled in years amid sweeping new security laws and COVID-19 pandemic restrictions
Bloomberg reported on Friday that Chinese officials held a special listening session in early June with Hong Kong’s foreign chamber of commerce to request advice on how to boost the city’s economy. Sources who described the meeting to Bloomberg noted its significance, as the event took place mostly in English and involved mainland Chinese authorities mostly listening and taking notes as they solicited advice from foreign investors.
Included in the invitation for the June listening session were five questions for potential attendees, including a request for “suggestions” or “advice” on how the Hong Kong government can improve the local business environment. Bloomberg’s sources said the main overarching response from attendees was a need to end COVID restrictions altogether and as soon as possible.
The meeting comes as China has seen economic struggles in recent months. According to Bloomberg, Hong Kong’s economy contracted by four percent in the first quarter of this year, making it one of the city’s worst performances in the past 30 years. Hong Kong has been limited in its ability to conduct business activities due to a strict COVID Zero policy.
In July of 2020, China also passed laws that prohibit broadly defined acts of “sedition,” “subversion,” “succession” and “terrorism.” In response to protests against these new laws, authorities in Hong Kong warned that even uttering certain pro-Hong Kong independence slogans could violate the new laws. Multiple independent newspapers in the city have also been shut down in police raids, with the publications and their operators being charged with sedition and foreign collusion.
Both the COVID restrictions and the new national security laws appear to have motivated investors to leave Hong Kong. In May of last year, CNBC reported a full 42 percent of American Chamber of Commerce (Amcham) members were planning or at least considering leaving Hong Kong and of that cohort, around 62 percent cited concerns Hong Kong’s new security laws as a reason to leave.
In November, Reuters reported Hong Kong Amcham President Tara Joseph planned to step down after failing to convince the Hong Kong government to ease the COVID restrictions.
China does not appear likely to drop its COVID restrictions altogether in the near future, but reduced the quarantine period for those arriving in Hong Kong from 21 days to seven for those who are vaccinated.
John Lee recently became the new Chief Executive of Hong Kong after running unopposed. Prior to being elected as chief executive of the city, Lee had served as the city’s security service and helped implemented the new national security laws. This week, Lee announced that he would try to reduce inconveniences to those visiting Hong Kong but vowed to do so “without bringing extra risk to the mainland.” At the same time, Lee vowed to continue cracking down on “fearmongering” and “lies” about human rights issues in Hong Kong, The Times reported.