Hong Kong companies see political persecution in COVID controls | business and economy

Hong Kong, China – Hong Kong’s bustling Mong Kok district saw diners pouring in and out of bars and restaurants on a busy summer weekend recently.

But there wasn’t a customer in sight at Shinko, a popular Japanese izakaya restaurant.

The restaurant was forced to suspend nighttime operations for 14 days after a customer failed to present a valid vaccination card during a police raid in mid-July.

While other restaurants have received similar penalties under Hong Kong’s pandemic rules, which include restrictive measures long abandoned elsewhere, Shinko’s owners believe they have been disproportionately scrutinized by authorities for their political beliefs.

“The business environment in Hong Kong makes me feel helpless, it makes me wonder if the authorities want to prevent us from doing business in Hong Kong,” Hei, one of the restaurant’s co-owners, told Al Jazeera.

Shinko is among Hong Kong companies that supported the mass pro-democracy protests in 2019, which began as peaceful demonstrations against plans to allow extradition to mainland China before morphing into a broader movement that has culminated in violent clashes between Demonstrators and the police came.

Companies like Shinko’s are known locally as part of the “yellow economy” — yellow is the color associated with pro-democracy sentiment in the Chinese-ruled city.

Once a fixture of the political landscape, Hong Kong’s pro-democracy movement has been largely silenced since Beijing imposed a draconian national security law on the territory in 2020.

Despite China’s promises to keep the former British colony’s rights and freedoms intact upon its return under Chinese rule, most of the movement’s leaders have been arrested, impeached or forced into exile. Media and civil society, once widely regarded as the freest in the region, are increasingly following the government line.

For “yellow” businesses, many of which became known for flaunting pro-democracy paraphernalia during the 2019 protests, the city’s new reality means coming under scrutiny from Beijing’s henchmen. This includes mouthpiece media, which often accuses institutions of defying the government’s COVID-19 restrictions and “spreading separatism” by displaying protest slogans and banners.

Hei, who asked not to use her full name, said her company has strictly followed the government’s COVID-19 restrictions to avoid complications, in part because she expects closer scrutiny and even hires extra staff to check customers’ vaccination records.

But Hei said her restaurant still gets more attention than others in her neighborhood as the eatery has been subject to five pandemic-related inspections since July alone.

Under Hong Kong’s strict pandemic rules, which align with mainland China’s “zero-COVID” strategy, customers who break the law can face a fine of HK$5,000 (US$637) during opening hours of the institution concerned can be restricted for 14 days. Guests entering bars must also present a negative COVID-19 test within the last 24 hours, with owners meeting technical requirements for ventilation and air purification.

Hei said some “yellow” business owners are trying to keep a low profile on social media to avoid attracting the attention of authorities.

“But I’ve found that no matter how inconspicuous you are, if they have to deal with you, they will come, it’s not helpful,” she said.

Both the Hong Kong Police Force and the Food and Environmental Hygiene Department (FEHD) are conducting inspections to ensure compliance with COVID-19 restrictions.

From March 2020 to August 2022, the police conducted more than 52,000 stops, resulting in 890 warnings, 3,258 fines and 638 prosecutions. The FEHD said it conducted more than 605,000 inspections, resulting in 2,432 prosecutions. It also said 1,257 catering businesses faced “timeout” penalties.

When asked what criteria are used to select a company for inspection, police said details of its operations are “not to be disclosed,” but officials would act “based on the actual circumstances” and in accordance with the law.

“The only aim of police operations is to appeal to the public to strictly follow the relevant regulations in order to reduce the risks of spread [the] Virus,” said a police spokesman.

Despite his actions, Shinko was fined after a raid in mid-July and forced to stop dining after 6 p.m. Hei said her staff checked customers’ vaccination records upon entry, but one customer failed to provide a valid QR code when questioned by police.

The suspension of dine-in services cut Shinko’s revenue by half, resulting in a six-figure loss. There is currently no way for companies to appeal the penalties.

While official guidelines require establishments to verify customers’ vaccination records prior to admission, they do not dictate whether owners are expected to verify the authenticity of these records.

“If an operator has exercised due diligence in scanning a customer’s QR code which turned out to be fraudulent, HK$5,000 [$637] The customer would be issued with a fixed fine,” said an FEHD spokesman.

Hei said that in the future, their staff may need to check people’s IDs to match their names with their vaccination records, although many restaurant chains get by with simply asking customers to scan their own vaccination cards upon entry.

Some entrepreneurs have decided to close up shop and move abroad. Herbert Chow, a pro-democracy businessman who owns the clothing and retail chain Chickeeduck, left Hong Kong in May after police raided a store that prominently displayed a protest slogan.

In August, Chickeeduck, which has been repeatedly labeled a national security threat by pro-Beijing media, announced that all of its stores would close once their leases expired.

Despite promising to return to Hong Kong, Chow later revealed on social media that he plans to continue his career in the UK.

Others have sought a fresh start in nearby Taiwan, including Teddy Ng, 37, who owned a catering and online retail business in Hong Kong.

In July, Ng announced that his nearly 10-year-old restaurant would close after its lease expires in September. His online retail website, which employs 25 people along with his restaurant, will also be shut down.

While Ng said he was proud the restaurant survived the pandemic, he was disappointed with government policies that drove him out.

“These COVID restrictions are disrupting our daily operations, but are they effective?” Ng told Al Jazeera, adding that Hong Kong has not kept up with the global trend of living with COVID-19.

While Hong Kong introduced a mainland-Chinese-style health code for entry to establishments like bars and restaurants earlier this month, countries like the UK, France and New Zealand long ago abolished vaccination cards. Despite its nickname as “Asia’s metropolitan city,” Hong Kong is among a handful of jurisdictions that still require hotel quarantine on arrivals.

Although Ng’s move to Taiwan meant giving up a decade of business relationships and his client base in Hong Kong, he finds the new environment much less stressful and hopes to open a restaurant in Taipei by October.

Like Shinko, Ng’s Hong Kong restaurant has been targeted by pro-government media and has been subject to frequent scrutiny. He said Hong Kong is no longer truly a free market due to political sensitivities and COVID-19 restrictions in the city.

“Therefore, we are willing to give up all these things and start fresh in a new place,” Ng said.