'No-COVID' policy drags on Hong Kong economy as cases surge

HONG KONG (AP) — Hong Kong’s Fung Shing Restaurant was bustling this week as customers came for one last taste of the traditional Cantonese dim sum that has made it famous.

With COVID restrictions cutting too deeply into its bottom line, the restaurant will shut its doors for good on Sunday, another economic victim of the pandemic.

Many fear the worst is yet to come, however, with Hong Kong experiencing its most severe outbreak yet, and fret the authorities' determination to stick to mainland China’s “zero-COVID” strategy may prevent it from recovering as a financial and travel hub.

“Even though maybe zero-COVID can be reached, there is still uncertainty on how long it can be maintained and what the cost is of maintaining it,” said Natixis senior economist Gary Ng.

“The biggest risk of Hong Kong in 2022 is that it may be entering the path of basically, if not recession, at least a downward drag in economic growth again while the world begins to normalize,” Ng said.

Hong Kong has seen banks close branches and movie theaters have shut down. The streets of popular shopping and dining districts are lined with shops displaying “for rent” signs. Its international airport is nearly devoid of travelers.

A ban on onsite dining after 6 p.m., imposed last month, is depriving restaurants of of critical dinner and banquet revenues.

Hong Kong’s daily new cases exceeded 2,000 for the first time on Monday; on Thursday, 6,116 new cases were reported.

Hospitals are becoming overwhelmed so the city’s looking into converting hotels and even unoccupied public housing into quarantine areas. But it shows no sign of backing away from matching mainland China’s stringent policies even as the rest of the world learns to live with the coronavirus.

As part of its zero-COVID strategy, China has...