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Opinion | Restart China’s economy by reopening Hong Kong to the world
- China needs lots of help as it struggles with Covid-19, and Hong Kong can play a central role by offering a financial lifeline
- But this will only be possible if the city abandons its own zero-Covid straitjacket by dropping all policies except the one thing that actually works: community vaccination
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Late last week, two heavyweights issued nearly simultaneous warnings about the economic impact of China’s “zero-Covid” policy.
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“The Chinese economy at this moment is in the worst shape in the past 30 years,” said Shan Weijian, a storied Chinese private equity investor. Shan warned of a “deep economic crisis” that was “man-made”, the result of “draconian” pandemic policies.
Joerg Wuttke, president of the EU Chamber of Commerce in China and a 30-year Beijing resident, painted a similarly bleak picture of a “crashing” economy brought low by “Covid zero”. He spoke of plunging freight volumes, a weakening yuan, capital outflows and stimulus measures that are “like a Band-Aid for an amputation”.
Worst of all, Wuttke said “China is losing its credibility” as a source for manufacturing, which is prompting many global businesses to restructure their supply chains away from the mainland. “Covid zero” has sparked radical uncertainty, sapping business confidence and freezing investment.
That is not the kind of talk one normally expects from a genial chamber of commerce president.
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As usual, with crisis comes opportunity. If the economic situation is as dire as Shan and Wuttke claim, China is going to need a lot of help and Hong Kong should play a central role in its recovery. Hong Kong cannot fix supply chains directly, but it can offer a financial lifeline to the mainland’s pandemic-battered economy.
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