Lobby group Hong Kong Investment Fund Association is readying a proposal for the local government that includes the consideration of quarantine-free travel, underlining that this is «a basic prerequisite» of a global financial hub.

Hong Kong Investment Fund Association (HKIFA) is preparing a proposal to the local government, urging for the end of Covid-related quarantines in order to maintain the financial hub’s competitiveness. 

«It cannot be become a norm for major business executives or investors to skip Hong Kong in their Asia trips because of quarantine requirements,» according to an «SCMP» report citing HKIFA chairman Nelson Chow Kin-hung in a media briefing.

«To maintain [Hong Kong’s] status as an international financial center, we need to be true to the label and be international. The ability to travel unfettered internationally is a basic prerequisite of an international financial center.» 

Not Enough

Although authorities in Hong Kong are making attempts to ease travel curbs with plans to shorten hotel quarantine periods for arrivals to three or four days alongside a China-styled color-coded health system, Chow said it was still «not ideal» for international investors.  

«Even though [the government] is shortening the quarantine period, we don’t know what the exit strategy is, at what point can we return to zero [quarantine]? What will it take to go from three days to zero,» added Sally Wong Chi-ming, chief executive of HKIFA which represents firms with a total of more than $52 trillion in assets under management.

Talent Exodus

HKIFA also reiterated one of the major challenges Hong Kong faces in its ability to maintain a competitive talent pool due to the impact of the city’s strict zero-Covid policy. 

«The situation is quite dire. Some firms are offering options for their staff to relocate to other cities, in an effort to retain employees,» Chow said. «A large number of regional talent are choosing other cities so that they can better conduct their duties.»

Cross-Border Flows

In addition to Covid-related issues, Wong also noted there was lackluster interest for cross-border schemes with mainland China – including the Mutual Recognition of Funds Scheme, Wealth Management Connect scheme and the ETF Connect – calling demand «slow and underwhelming». 

HKIFA has made a list of recommendations to the government to relax stringent restrictions on cross-border schemes, such as a 50 percent cap for fund sales as a portion of total asset value. It also suggests adding products domiciled in other markets for the ETF scheme and attracting more mainland investors with the addition of higher risk products for the wealth scheme.