LONDON/SINGAPORE (Reuters) – HSBC said Hong Kong’s strict curbs on travel and social interaction are hurting the economy and may impact the ability to hire and keep staff in the Asian financial hub, in one of the strongest comments yet by a global lender on the city’s tough measures to combat the COVID-19 pandemic.
“The evolving Covid-19 restrictions in Hong Kong, including travel, public gathering and social distancing restrictions, are impacting the Hong Kong economy, and may affect the ability to attract and retain staff,” the lender said on Tuesday.
The comments came as the Asia-focused lender reported its annual profit more than doubled. It said, however, it expects a weaker performance in its wealth management business in Asia in the first quarter of this year.
Daily infections numbers in Hong Kong have risen sharply this year, reaching a record 7,533 cases on Monday, overwhelming the government’s testing, hospital and quarantine capacities.
The Chinese territory is following Beijing’s “zero-COVID” policy rather than adapting to life with the virus.
As a result of that policy, more expats are thinking of leaving, and global banks, asset managers and corporate law firms are facing up to many of their staff exiting after annual bonuses are paid out in the first three months of the year.
Economists say that without unprecedented relief measures in Hong Kong’s 2022-23 budget on Wednesday, it’s hard to see how the economy can avoid contracting again after emerging last year out of its most prolonged recessions, which lasted from 2019 to 2020.
HSBC’s comments came after Bill Winters, chief executive of Standard Chartered, last week said the city’s travel curbs could in the long run hurt its status as a financial hub compared to other regional centres.
(Reporting by Lawrence White in London and Anshuman Daga in Singapore; Editing by Kenneth Maxwell)