Hong Kong struggles to persuade CEOs it is open for business

“We’re back!” Hong Kong’s financial secretary Paul Chan told a conference intended to show the Chinese city is open for business following the lifting of coronavirus measures that undermined its status as a hub for international finance.

But Chan himself was not back at all. After catching Covid-19 on a work trip, he was stranded in the Middle East due to Hong Kong’s remaining pandemic restrictions and appeared at the fintech gathering on Monday via a video link.

The incident encapsulated the challenge Hong Kong faces in persuading global investors to return to a territory that imposed weeks-long quarantines and unpredictable flight bans through much of the pandemic.

The fintech conference is part of a week of gatherings — including a global forum for financial institution chief executives and the return of the celebrated rugby Sevens tournament — that the government hopes will announce Hong Kong’s re-engagement with the business world.

But at least three senior executives have pulled out of the Global Financial Leaders’ Investment Summit that opens on Wednesday, with two more missing from its schedule.

Blackstone said its president Jonathan Gray could no longer attend due to a coronavirus infection and would be replaced by chief financial officer Michael Chae. Jane Fraser, chief executive of Citigroup, also pulled out after contracting Covid, to be replaced by wealth management head Anand Selva.

CS Venkatakrishnan, Barclays chief executive, “made changes to his travel plans”, while Timothy Armour, chair of US fund manager Capital Group, and Valérie Baudson, chief executive of Amundi, one of Europe’s biggest asset managers, were also missing from a revised agenda for Wednesday. Capital Group and Amundi did not immediately respond to a request for comment.

Some executives say Hong Kong’s remaining coronavirus rules, which include pre-departure and on-arrival Covid tests, risk undermining the city’s return to the world stage.

Johannes Hack, president of Hong Kong’s German Chamber of Commerce and a bank executive, said measures such as on-arrival tests should be scrapped.

“I can’t ask my boss to come to Hong Kong as long as he has to worry about testing positive and having his trip disrupted,” Hack said. “If I say, ‘Come for two days but potentially be stuck for a week’, [they are] going to say no.”

Visitors arriving in Hong Kong must currently take PCR tests for a week, and for the first three days at least cannot visit restaurants or bars. If they test positive, they must isolate for seven days.

Some attendees of the financial forum and fintech conference were exempted from some of the requirements. Banking CEOs who test positive, for example, will be allowed to leave the city by private jet.

Hong Kong leader John Lee on Tuesday dismissed concerns about the turnout for the global forum, with the chief executives of Goldman Sachs and Morgan Stanley still attending. “[Those] who cannot attend the event only account for a small number of people . . . We still see over 200 attendees, which matches our expectations,” Lee said.

But the physical absence of mainland Chinese panellists highlighted the impact of the tight travel restrictions imposed by Beijing as part of its zero-Covid approach. Regulators including the governor of the People’s Bank of China and vice chair of the China Banking and Insurance Regulatory Commission joined the fintech conference via pre-recorded speeches or live-stream video links.

Still, Liu Jin, president of the Bank of China, was scheduled to appear at the global forum in his first public appearance outside mainland China since taking office in 2021. Chan, the financial secretary, was also set to attend after he made a belated return to Hong Kong on Tuesday and tested negative for Covid-19.

Hong Kong is desperate to repair the damage to its reputation from the long coronavirus isolation and the tough crackdown on civil liberties that followed huge pro-democracy protests in 2019.

The city’s economy contracted 4.5 per cent year-on-year in the third quarter, much worse than the 0.8 per cent contraction expected by economists and the worst decline since the second quarter of 2020.

At the fintech conference, many executives said they were excited to return to Hong Kong and thrilled by the city’s proposal to allow retail trading in crypto assets. But others bemoaned its remaining Covid-19 rules.

“It was so annoying not being able to do much in the first few days, and then all the tests,” said one attendee. “I think Hong Kong could really come back, but it’s just being held back by these rules.”