Roll out the welcome mat. Monday’s full resumption of cross border travel between mainland China and Hong Kong is needed to revive the territory’s economy.
About 56mn people — eight times the population of Hong Kong — visited the city annually before the pandemic. The flow of visitors from mainland China, which had accounted for 80 per cent of that total, fell to just 91,000 people at the peak of the pandemic. Now Beijing is dropping all border restrictions between the city and the mainland for the first time in three years. Hong Kong will also scrap its vaccination requirements.
For Hong Kong, tourism is critical. Before the pandemic the sector contributed about 5 per cent of Hong Kong’s GDP and about 7 per cent of total employment. Mainland visitors also accounted for most Hong Kong property purchases, helping generate the taxes that are a pillar of city revenues. The closure of borders and imposition of quarantine requirements helps explain why Hong Kong’s economy contracted 3.5 per cent last year, the third decrease in four years.