Key Takeaways
- China and Hong Kong SAR reopened borders, leading to economic improvements and a surge in tourism after abandoning strict zero-COVID policies.
- The Greater Bay Area’s population, heavily reliant on daily commuting between Hong Kong and the mainland, benefited from the border reopening.
- While the move revitalized tourism and trade, visitor numbers remain below pre-pandemic levels, with Hong Kong’s minister of Tourism suggesting a slow return to peak figures.
- Initiatives like the “Hello Hong Kong” campaign aim to promote inbound tourism, offering 500,000 free round-trip airline tickets.
- China’s focus on developing the Greater Bay Area is anticipated to provide broader market opportunities, aiding Hong Kong’s economic recovery.
Reopening Borders and Economic Impact
Beijing, China–On February 17, the Government of the People’s Republic of China announced in a news release that over the last month, since opening up borders, the country (including Hong Kong SAR) has seen a significant improvement in the economy and an exponential rise in tourism.
Impact on Greater Bay Area and Trade
The governments of China and Hong Kong announced abandoning their strict zero-COVID policy and resuming travel and international tourism in December last year, which came into effect on January 8. One month later, the mainland and Hong Kong SAR opened all channels of travel and trade.
According to the release, a large population living in the Greater Bay Area (Guangdong–Hong Kong–Macao) used to commute daily between Hong Kong and the mainland (and vice versa) for work, business, and education and the sealing of borders during the pandemic severely affected residents and businesses (small and large).
Tourism Recovery Efforts and Future Prospects
Also, the mainland is one of Hong Kong’s main export markets (of electric and mechanical components). Opening borders and the free movement of goods between the two regions are expected to bring things back on track eventually.
As per data, Hong Kong averaged about 60 million visitors annually before the pandemic, which fell to 90,000 in 2021, considerably impacting the tourism sector.
Previously known as the world’s financial capital, Hong Kong is home to many hotels, restaurants, and tourism-centric businesses (a pillar industry in the region), which has experienced some relief over the last month.
Having said that, the numbers are nowhere near pre-pandemic figures. In 2018, the number of visitors to the region reached an all-time high of 65 million (annually). According to Hong Kong’s Minister of Tourism, Kevin Yeung, it may take a while to return to such levels.
“When tourists consider whether they will choose a particular place to visit, there are several factors to consider … the currency exchange rate, the price level, the safety of that particular city, the convenience of that place,” Yeung said in a report.
To promote inbound tourism, the government of Hong Kong launched the “Hello Hong Kong” campaign earlier this month by announcing a giveaway of 500,000 free round-trip airline tickets to and from the city over the next six months.
Per the release, the Chinese government will be focusing on the development of and an “opening up and building” of the Greater Bay Area, which will consequently provide a broader market for Hong Kong’s financial services and technological innovation industries in what it thinks is a crucial sector to Hong Kong’s economic recovery.
What We Think
The reopening of borders between China and Hong Kong marks a positive turn for both economies, fostering economic growth and rejuvenating the tourism sector.
However, despite initiatives like the “Hello Hong Kong” campaign, the return to pre-pandemic visitor numbers might be gradual, as highlighted by Hong Kong’s Tourism Minister, Kevin Yeung.
The emphasis on developing the Greater Bay Area presents promising opportunities for Hong Kong’s financial and technological sectors. Patience may be key as the regions navigate towards full recovery, balancing safety measures and promotional efforts to reignite tourism.
