International financial firms have urged Hong Kong to ease its zero-Covid approach, as the government’s data showed that only one in five applicants were exempted from a tough quarantine rule since a waiver programme kicked off five months ago.

The exemption scheme had not operated as expected, with only 86 approvals granted as of October 22, out of 385 applications received, according to data provided by the Financial Services and the Treasury Bureau (FSTB) in response to a query by South China Morning Post.

The data underscored the concern shared in a survey compiled by the Asia Securities Industry and Financial Markets Association (ASIFMA), which counts 150 banks and asset managers as members including BlackRock, Goldman Sachs and JPMorgan. The guild sent a letter to Financial Secretary Paul Chan Mo-po over the weekend, urging him to give a clear road map of how the city plans to resume normal operations like other international financial centres.

Nine out 10 of the association’s members

said they were finding it difficult to operate in Hong Kong because of the highly restrictive Covid-19 policies, while 48 per cent were contemplating moving staff or functions away from Hong Kong amid such challenges, a recent survey of 30 members showed.

The members “fear that if Hong Kong does not develop and communicate a clear and meaningful exit strategy from the current zero-case approach, as is the case in many other jurisdictions, Hong Kong risks losing its vital international status”, Mark Austen, chief executive of ASIFMA, said in the letter.

Hong Kong has served as a gateway for international investors to the mainland, with the city ranking as the world’s top initial public offering market seven times in the past 12 years. The city, an integral part of Beijing’s Greater Bay Area initiative, has also set its sights on becoming a green finance centre and an offshore bond-raising destination for mainland entities and the central government.

In late May, the Hong Kong government implemented rules to exempt some fully vaccinated senior bankers from the city’s compulsory quarantine in a bid to make travel and return easier to help businesses in the city. However, many banks and brokers said it was extremely difficult to get approval from regulators on exemptions, which meant most senior executives could still could not travel easily.

Should international players decide to quit the city, it would have a knock-on effect on the mainland markets, the association warned.

“This would undermine the territory’s and the mainland’s long-term interests and policy objectives in relation to the internationalisation of China’s capital markets, integration and continued national economic development, and impact the Greater Bay Area’s positioning,” Austen said.

The call came as other financial centres, such as Singapore, London and New York, have eased travel restrictions and opted for “living with Covid”. Hong Kong, on the other hand, has adopted a zero-Covid policy and requires travellers to undergo up to 21 days of quarantine.

The travel and quarantine policies, among the strictest globally, have helped Hong Kong to achieve almost zero infections in recent months, with only a single local case on October 7.

However, the measures have brought business travel to a standstill, significantly limiting Hong Kong’s ability to function as an international finance centre and posing a risk to its long-term economic prospects, ASIFMA said.

“We share these and other results only to highlight industry concern regarding Hong Kong’s ongoing status as an international finance centre and for its long-term economic health,” Austen said, adding that “living with Covid” will eventually be required, enabling businesses, families and the community in Hong Kong to more effectively plan for the future.

Hong Kong’s government acknowledged that it is “aware of the views from the financial industry on the anti-epidemic measures,” adding that the FSTB “will maintain liaison with them to understand their difficulties and concerns.”

“We noticed that some countries and regions have adjusted their anti-epidemic strategies, from the original goal of “zero infection” to the so-called “co-existing with the virus” strategy without striving for “zero infection,” according to a government spokesman. “Generally, after adjusting their anti-epidemic strategies, these countries and regions saw an increase in the number of infection, hospitalisation and death cases recorded.”

City authorities “will continue to strive to reach zero infection and sustain the various stringent and necessary anti-epidemic measures, with a view to proactively implementing the anti-epidemic strategy of preventing the importation of cases and the spreading of virus in the community,” the spokesman said.