In a move that is anticipated to have a significant positive impact on the economies of the two cities, China has announced that its borders with the special administrative areas of Hong Kong and Macao will be fully reopened beginning next week. The daily travel limitations will also be eliminated, according to a statement made on Friday by the State Council’s Office for Hong Kong and Macao Affairs. Travelers entering mainland China from Hong Kong or Macao will no longer be required to show documentation of negative Covid tests. The faltering economies of Hong Kong and Macao are anticipated to receive a big boost from the return of regular travel.
Both Macao, which was the world’s casino capital before the pandemic and Hong Kong, which is a key international financial hub, saw their economies drop last year. Hong Kong’s GDP shrank by 4.2% in the fourth quarter, which was substantially more than economists had predicted. For the past three years, companies all throughout the city have been extremely concerned about the resumption of cross-border travel to mainland China.
However, some relief was brought about last month when residents of Hong Kong and mainland China were allowed to resume two-way, quarantine-free travel. However, this limited reopening came with requirements for travelers, including the need to test negative for Covid-19 and book trips in advance online using a daily quota system. With these restrictions no longer in place, Hong Kong’s economy is predicted to increase by 3% to 4%, with mainland Chinese tourists’ spending playing a significant role.
In an effort to restore Hong Kong’s reputation as a major international commercial center, John Lee, the leader of Hong Kong, has also disclosed plans by the government to distribute up to 500,000 free airline tickets to entice tourists to return. Additionally upbeat about Hong Kong’s economic recovery, Goldman Sachs analysts anticipate 3.5% growth this year as a result of the reopening of the border with mainland China and the elimination of the majority of social segregationist regulations.
The reopening of the borders between Hong Kong and mainland China is anticipated to have a significant positive impact on the latter territory’s economy as a significant financial hub. The economy of Hong Kong contracted by 3.5% in the previous year, and its GDP contracted by 4.2% in the fourth quarter, both of which were substantially worse than economists had anticipated. According to industry associations, the city’s businesses have expressed the greatest concern over the past three years over the restricted cross-border travel to mainland China.
However, when residents of Hong Kong and mainland China were permitted to resume two-way, quarantine-free travel, businesses experienced some solace. Travelers no longer need to obtain a negative Covid-19 test and make online reservations for travels that fall under a daily quota system starting the week after next.
According to Hong Kong Chief Secretary Chan Kwok-ki, the return of “regular travel” for both parties is imminent and may increase the city’s economic growth by 3-4%. The reopening of the borders and the elimination of the majority of social isolationist measures have given Goldman Sachs analysts reason to be optimistic about the city’s resurgence, which they predict will result in growth of 3.5% this year.
The government would provide up to 500,000 free aircraft tickets to entice back tourists as part of the city’s efforts to reclaim its standing as a major international economic hub, according to John Lee, who described it as “the world’s biggest welcome ever.”
The reopening of Macao’s borders with mainland China is also anticipated to be beneficial for the former capital of the world’s casinos. Its economy, which has been severely impacted by the pandemic, is anticipated to grow significantly as a result of the restrictions being lifted and the return to “regular travel.”
In conclusion, it is anticipated that the reopening of borders between mainland China and its special administrative territories of Hong Kong and Macao will significantly improve both cities’ economy and aid in their return to position as important business hubs.