Market Thinking

making sense of the narrative

Take the long way home…

Print Friendly, PDF & Email

The return to Hong Kong has finally arrived, after the HK authorities dropped their ridiculous three week wash-out plus three week hotel quarantine requirements, that had made a ‘desk to desk’ transition period of six weeks. But the inefficiencies, not to mention the costs, reman. The requirement to stay in a government approved ‘quarantine hotel’ requires careful triangulation, if your flight is cancelled, you lose your hotel booking. No refunds and good luck finding another one. No hotel, no entry. Of course, reducing a, wildly overpriced, hotel stay from three weeks to ‘only’ one theoretically frees up a lot of capacity, but then a lot of people, having be stranded overseas, are now all trying to get back. Only permanent residents of course, although that is being relaxed some time next month and the fact that officials are talking excitedly about welcoming back hundreds of thousands of tourists only serves to confirm the sense of the delusion they are under. Why do they think anyone is going to visit if they have to spend a week in enforced solitary confinement?

Ex-pats have been leaving in their droves, not, as the anti China propagandists keep trying to make out, because of the ‘draconian security laws’, but because most ex-pats in Hong Kong have regional jobs and zoom meetings can be done from anywhere, without the need for over-priced accommodation and schools that aren’t even open. Indeed, the combination of school closures for almost 3 years (the 2019 protests also closed schools) plus the ridiculous idea of closing children’s playgrounds, swimming pools and beaches has meant that many families have left, probably permanently. The few returning ex-pats, like myself, are flying solo.

The last time I did quarantine it was two weeks, but ‘desk to desk’ time isn’t going to be that much different as I had to fly via Singapore so as not to risk the flight/airline being cancelled, for, adding to a list of already ridiculous measures, the HK authorities have decided that any airline where three or more passengers test positive on arrival will be banned for seven days. Never mind if you test negative before or after, the concept of false positives is not considered. So you lose your hotel and probably another month of valuable time. Valuable to you that is, clearly not to the bureaucracy, which has but a single aim, to achieve (the unachievable) zero Covid.

A big part of the problem is management. Peter Drucker famously observed that what can be measured will be managed and for most of the last two years the only people being tested were arriving travelers. Accordingly the mindset arose that zero covid could be achieved by having zero covid arriving from abroad, hence increasingly extreme (and consistently futile) policies trying to suppress travel. With the rest of the world, even New Zealand, having acknowledged the futility of this policy, Hong Kong stands out, along with China as the last redoubt of the Zero Covidians.

In this obsession, I am sadly constantly reminded of the piece in Jung Chang’s book ‘Wild Swans‘ where she describes how under Mao local officials melted down farm equipment in order to meet steel production quotas, or how they declared agricultural surpluses while the people starved and the surpluses were sold to India. To fund a space race. As in so much at the moment, there is little more dangerous than a zealous bureaucrat with a performance target.

Having flown via Singapore, where, unlike Europe, they still maintain a few of the “Covid Theatricals”, just before they dropped the requirement for an Rapid AntiGen Test, I then had to take another, ‘agreeably expensive’ PCR test within 48 hours of departure for Hong Kong. Given the wait times, that meant two nights stay and still my colleague, who had flown up from Australia was refused boarding because the airline said it had to be within 48 hours of landing! They were wrong, but presumably terrified of falling foul of the HK authorities and so another delay (for him), another cost and, like so much of the last two years, a sense of powerlessness for all of us.

So, to quote an old expression, it’s more in sorrow than anger that I write this memo while stuck in the ‘Holding area’ at Hong Kong airport waiting for yet another PCR test to come back (there will be many more over the next two weeks). Sad that HK has transformed from the best airport experience in the world to arguably the worst. Sad that the lovely people of Hong Kong are suffering from continued massive policy mis-management and sad that the one of the ‘two systems’ under One Country two systems that would have had Hong Kong living with Covid and open for business as everything is in the UK now has clearly now gone. This is not to hark back to the days of the Brits, but a Governor would surely have considered the wider economic impacts of the Zero Covid measures. We currently live under a regime of Zero Risk tolerance and, as investors, we know that zero risk means zero return.

Being optimists we believe it will come back – which is why we are setting up a new business here – but we have to hope that the quixotic pursuit of Zero Covid hasn’t caused too much permanent damage along the way. Think positive!

Share this article

Leave a Reply

Your email address will not be published.