I'm trapped here in Hong Kong. And that's not going to change anytime soon.
For almost two years, I've been stuck in this territory of 429 square miles, smaller than the cities of Los Angeles, Phoenix and Nashville. Yes, I can technically leave. But if I want to return, I have to suffer through the world's strictest quarantine requirements. I'll explain what that means a little later.
Suffice to say, I'm stuck here alongside the rest of Hong Kong's 7.4 million residents. Several friends and acquaintances have traveled overseas for important events. All say it wasn't worth it once they went stir crazy in quarantine on their return.
It's hurting Hong Kong. There's no indication of the government's stance softening, and in fact the Hong Kong powers-that-be just tightened up several exemptions to quarantine (which didn't cover me anyway). The focus is on opening up the borders back to mainland China, which will likely happen before year-end. But Hong Kong's position as a global financial and trade hub is in serious doubt due to the prohibitive costs, both literal and in spirit, of traveling anywhere other than China, and then traveling back here.
The tough stance is necessitated by China's zero-COVID strategy. After botching the initial outbreak of COVID-19 in Wuhan, which officials tried to cover up, China instigated some of the toughest lockdown measures the world has ever seen. Local authorities went as far as to barricade some citizens inside their own homes. The measures did contain COVID, and snap lockdowns continue to this day when there's an outbreak. China now flaunts its strong record, with only 112,870 official cases and 4,636 official deaths, as proof its system of control has been best.
But having run its flag up the zero-COVID pole, the Chinese government cannot now open back up to international travel and usher the virus back in. Too many citizens would wonder what all that personal sacrifice was about. And China is a big country - many citizens are happy life and domestic travel are almost back to normal. The Communist government is secretly pretty happy with a situation in which its citizens aren't allowed to leave.
China may therefore end up the last major nation attempting to keep COVOID infection at or near zero. Hong Kong, as basically a colony of China, has imported that strategy as well. But there are plenty of signs frustrations over the policies are reaching breaking point.
With the zero-COVID strategy, China is reaching an inflection point, Nomura economists Ting Lu and Jing Wang write in a new report examining the issue. Zero-COVID will likely last well into 2022, past an important Communist Party conference, and as the strategy drags on "gains are likely to diminish while pains could rapidly rise," the Nomura pair write, suppressing growth next year. The implications are broad for the developed world, given China's importance in global supply chains.
Zero-COVID has shown the "institutional strength" of the Chinese Communist Party, and "allowed officials to laud the triumphant Chinese model," Lu and Wang state. Abandoning zero-COVID now "could be perceived as conceding that the strategy did not work in the first place."
Yet more and more Chinese nationals are "feeling the pinch, becoming worn out, unemployed or underemployed, and have drained their savings to a level at which they would have to cut their spending," the economists note.
China will hold the Winter Olympics in and around Beijing from February 4-20. The plan is to allow domestic spectators, although the current outbreaks of COVID have been concentrated in northeastern China, and have required lockdowns even in parts of Beijing, so that's far from a sure thing.
The annual National People's Congress gathering of China's parliament will follow in short order, in March 2022. It will then lead into the 20th Party Congress, likely next November, a meeting held every five years but at which once-in-a-decade leadership changes are made. Or not made. Chinese President Xi Jinping, having removed term limits for precisely this purpose, is surely going to seek an unprecedented third term, and ultimately seek to remain "Emperor for Life."
Those leadership changes - there will be some at lower ranks - won't all take place until the following year's National People's Congress. So we could see zero-CCOVID continue as a policy certainly until this time next year, and perhaps to March 2023 or beyond.
The propaganda wheels are already spinning. State news agency Xinhua on Saturday started praising Xi as "a man of determination and action, a man of profound thoughts and feelings, a man who inherited a legacy and dares to innovate, and a man who has forward-looking vision and is committed to working tirelessly."
The Communist Party's 300-member Central Committee in fact starts a meeting today, running through Thursday, at which it is likely to ratify a "historical resolution" to extol Xi's time in power and cement its place in the official assessment of the 100-year history of the party. Only two such resolutions have passed before, one each under Mao Zedong and Deng Xiaoping. This assessment will become the party's bible, coloring teaching, official pronouncements, and propaganda.
While China has benefitted in its manufacturing sector as the rest of the world's economies bounced back to life post-COVID waves, it is not so well-positioned to post further gains. Demand is shifting away from personal protective equipment and the kinds of electronics and gadgets people use when stuck at home and toward services, which China's tough border restrictions in many cases prevent it from offering.
Overseas production in other locations is also picking back up. The U.S.-China trade tensions continue, and the pandemic only stressed the importance of having a diversified supply chain and intensified efforts at many companies to build a "China + 1" manufacturing base.
Those efforts can now resume, while international executives are unable to visit production sites in China. China's manufacturing importance is massive but on the wane, in other words, meaning its durable-goods boom is not sustainable. What's more, China has had problems with rolling power cuts, as I explained recently, and other disruptions at home.
Hong Kong's doubling down on zero-COVID to be as strict as China "could significantly reduce its competitiveness," Nomura points out, particularly against financial centers such as Singapore, which is hewing to a sensible "living with COVID" course. I think Singapore is on the right lines - get vaccination rates really high, open up to places where infections aren't out of control, and deal with cases as they crop up. Life for that city-state can get back to normal.
It is anything but back to normal in Hong Kong, where many executives were making multiple business trips per month to serve Asia as a base. Citizens are used to multiple trips abroad for study, family and fun, as well. All of that is currently impossible. Businesspeople make a trip here and there for several weeks at a time to make it worthwhile. Most don't bother.
If I've been to a medium-risk country, I have to pay for a high-priced Hong Kong hotel for 14 nights, and literally cannot leave that room for the two-week duration. If I've been to one of the 25 high-risk nations, which includes the United States and the United Kingdom, the hotel prison sentence is 21 nights.
Full board at the boutique JEN Hong Kong, owned by the luxury Shangri-La chain, runs HK$14,658 (US$1,883). If my family of four want to go to see my 80-year-old parents back in Britain, we're talking US$7,532 in an enforced staycation, sure to drive my kids to killing-each-other point in their separate room and raise my divorce risk quite significantly as my wife and I trip over each other. Add to that the need for a PCR nucleic-acid COVID test within 72 hours of both departure and arrival back home. Add another US$500 or so for a family of four.
I can travel to the only country in Hong Kong's "low-risk" category with only seven nights of quarantine on return. But that's literally useless. New Zealand, the country in question, isn't allowing foreigners in. If it changes that policy, I'm sure its low-risk status will miraculously morph into a higher risk category as well.
So I'm walled in by a zero-COVID policy in a city where civil liberties have vanished, and the thought police are on patrol. Unions and trade associations have shut up shop, faced with government pressure if they tow anything at all other than the Communist Party line. I can be sent to jail for saying the Hong Kong government deserves sanctions, or that Taiwan is actually an independent country. Amnesty International pulled the plug here, at the time its observation of human-rights abuses is needed most, saying it's impossible to operate in Hong Kong.
China and Hong Kong are set to maintain this zero-COVID policy for at least another year. It won't work. The virus is endemic now, more than likely, so as soon as any international travel resumes, it will return. But return is out of the question to Hong Kong, with such a long quarantine to face. The other option, one an increasing number of citizens are choosing, is not to come back at all. To simply leave, for good.
