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Hong Kong has dropped almost all of its remaining Covid-19 restrictions and scrapped compulsory testing for arrivals as the city aims to revive its pandemic-hit economy and catch up with Beijing’s abrupt exit from zero-Covid.

John Lee, Hong Kong’s chief executive, announced on Wednesday that travellers would no longer be required to undergo PCR testing on arrival from Thursday, and would only need to present evidence of a negative rapid antigen test. A ban on gatherings of more than 12 people will also be ditched, although the city’s outdoor mask mandate remains.

“I want to tell the world that . . . Hong Kong is very normal now,” Lee told a press conference.

Close contacts of positive Covid cases will no longer be ordered to isolate at home or quarantine at government facilities, putting an end to what some described as the “brutal” experience of being trapped in government centres.

The Chinese territory had imposed some of the world’s most stringent curbs to control the virus, including mandatory quarantines that at one point stretched up to three weeks and a policy of separating Covid-positive children from their parents, measures that raised concern among expatriate residents and businesses as well as locals.

Hong Kong dropped hotel quarantine for overseas arrivals only in September and has gradually lifted other social restrictions, such as those targeting bars and restaurants, this month. Residents will no longer need to display proof of vaccination to enter such venues from Thursday.

More than 140,000 members of Hong Kong’s workforce have left over the past two years, driven out by the pandemic regime as well as a national crackdown by Beijing that has crushed the city’s civic freedoms.

Gary Ng, a senior economist at Natixis, has said the territory may experience an economic rebound after the restrictions are relaxed, predicting 3.5 per cent to 4 per cent gross domestic product growth in 2023, following a projected 3.2 per cent contraction this year.

“It takes time to see the actual impact of border reopening,” he said, adding that first-quarter economic data might remain discouraging.

Property services company Savills Hong Kong estimated that retail rents could rise up to 5 per cent in 2023, with the gradual return of mainland Chinese and overseas travellers.

Hong Kong’s latest easing came after China this month ended centralised government quarantine for Covid patients and this week announced it would abandon isolation for inbound travellers next month even as it battles its biggest outbreak of the pandemic.

Tens of millions of people are catching the virus every day in China, where hospitals have been overwhelmed by a wave of elderly patients and authorities have stopped releasing daily Covid case counts.

“When the government decided on a policy shift to live with the virus, these measures will have to be dropped at some point,” said Leo Poon, head of the University of Hong Kong’s division of public health laboratory sciences.

Hong Kong would also begin reopening its border with the mainland in stages from January 15, Lee said, a week after China drops its inbound quarantine requirement. Cross-border activity has been halted for the past three years, stifling the territory’s economy.

More than 2.5mn of Hong Kong’s population of 7.4mn had caught the virus, Lee said, meaning the city would be able to manage risks because of its prior exposure. Hong Kong experienced its worst outbreak this spring, when it recorded the highest death rate in the world. Cases have remained elevated since, with the city reporting 19,689 new local cases and 59 deaths on Wednesday for the day before.

Some health experts and lawmakers have called for Hong Kong to drop its mask rule, following the model of Singapore, Taiwan and Japan.

But health secretary Lo Chung-mau insisted the mask requirement would protect residents “from influenza and other respiratory tract infections” and remain in place until the winter surge ended.

“We balance the benefits versus the costs,” he said.