Hong Kong catches tantalising glimpse of future

City limits. Hong Kong's hectic spring break offers some clues about which direction the Asian financial hub is heading.

In the first week of April, Hong Kong International Airport marked its busiest seven days since January 2020, before Covid-19 struck. Hot on the heels of UBS-backed Art Basel, a sellout HSBC World Rugby Sevens Series was immediately followed by the bank's inaugural Global Investment Summit. Speakers at the event, which filled a hole left by Credit Suisse's former flagship annual conference, ranged from actress Michelle Yeoh to Tesla co-founder Martin Eberhard to Stanford University's Elizabeth Economy. It was standing room only at some sessions for the 3,500 attendees.

Despite the influx, Hong Kong isn't back to its free-wheeling former self. On the stock market, the benchmark Hang Seng Index is nearly 50% below a 2021 high, and there is no end in sight to an IPO drought that has left investment bankers twiddling their thumbs. Meanwhile, executives are scrutinising Article 23, a strict and wide-ranging national security law introduced in March.

Hong Kong is changing in other ways, too, as the place that brands itself "Asia's world city" recovers from years of isolation wrought by protests and the pandemic.

Large numbers of locals spend their free time across the border: immigration data show more than 2.5 million residents left the city via its land and sea checkpoints during the week beginning March 25, with a similar number returning the following week. Most of those ports lead to China: that suggests around a third of the population used the long Easter weekend to visit the mainland. There was a similar pattern over the Chinese New Year public holiday.

A trip to China appeals in part because Hong Kong remains an eye-wateringly expensive place to call home. Goods and services from hospitals to hotpots are more affordable on the other side of the Pearl River Delta. Hong Kongers are flocking to cheap and cheerful shopping destinations like wholesale retailer Sam's Club. The Hong Kong government noted on Wednesday an increasing demand for less frivolous activities such as cross-border healthcare, too.

Ever since the handover in 1997, pundits have debated whether Hong Kong would become more like China, or vice versa. The past few weeks hint that the city can retain some of its cosmopolitan character, even as pragmatism and politics edge the city ever closer to its neighbour.

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Total arrivals into Hong Kong though its airport reached the highest level since January 2020 in the week beginning April 1, official data show. The city hosted the HSBC Rugby Sevens tournament between April 5 and 7, immediately followed by the inaugural HSBC Global Investment Summit between April 8 and 10.