China’s strict “zero outbreak” policy is facing an unexpected new threat as people fleeing Hong Kong’s worsening virus outbreak cross the border illegally.

Some Chinese cities have rewarded information about smuggling after 15 individuals illegally entered Zhuhai, Guangdong province, by boat from Hong Kong. At least four of them contracted Covid-19 and later traveled to other parts of China, according to Chinese media.

The cases come within a week of President Xi Jinping saying eradicating the outbreak must be Hong Kong’s top priority. Local authorities are already weighing mandatory testing of the entire population of the region and then quarantining anyone found infected.

The prospect of continued strict controls with no end date is fueling concerns among businesses that Hong Kong’s status as a financial hub is being jeopardized by a decision to effectively cut off Hong Kong from the outside world early in the pandemic.

On Friday, the top Chinese government representative in Hong Kong convened a meeting of property tycoons where they discussed contributing hotels, properties and other resources to the effort.

The meeting was broadcast live in Mandarin, the official language of China, and some executives of the participating companies were inarticulate.

Anyone who has legally arrived in China from overseas or Hong Kong will have to stay in a hotel or quarantine center for two weeks before continuing to travel.

Fences and other fortifications along Hong Kong’s long land border with Shenzhen, Guangdong’s second-largest city, were originally designed to keep illegal immigrants from China from entering Hong Kong. But it is relatively easy to travel by boat between Hong Kong and many cities in Guangdong, whose coastline and river network are long and difficult to police.

“Mainland cities are worried about arrivals from Hong Kong,” said Tan Yaozong, Hong Kong’s highest-ranking representative to the National People’s Congress in China’s parliament. “They are concerned that cases may enter their communities.”

Liu Zhaojia, who advises the Chinese government on Hong Kong policy matters, said illegal border crossings could also provoke “dissatisfaction among mainland Chinese residents and questions about why [Hong Kong] Authorities are not doing enough to prevent this from happening.”

Hong Kong reported 3,629 Covid cases on Friday, with another 7,600 still to be confirmed.

The territory’s own zero coronavirus strategy, which includes some of the toughest restrictions in the world, has prevented the mass deaths suffered elsewhere.

But some global business groups have moved to temporarily locate their Asian senior executives outside Hong Kong due to controls including a two-week hotel quarantine for arrivals.

Mark FitzPatrick, who was recently appointed as Prudential’s interim president, said the group’s next chief executive could be forced to take up the role from outside Hong Kong because of the “friction” of Covid-19 restrictions.

FitzPatrick told the FT that he “could definitely see CEOs taking short-term jobs outside Hong Kong until it’s easier to actually run a regional business. [from there]”.

British bank HSBC temporarily closed six branches in the city on Friday, including several floors of its headquarters, after an employee tested positive.

Hong Kong’s chief executive, Carrie Lam, announced that the election for a new leader will be postponed from March 27 to May 8, a sign that authorities expect the coronavirus outbreak to persist.

One Hong Kong resident, who asked not to be named, told the Financial Times that his family of five was considering leaving Hong Kong for Fujian province, where they have a home. “I have been in Hong Kong for almost seven years, and I have never seen [anything like this],” He said.

Additional reporting by Ian Smith and Tabby Kinder



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