FirstFT: Hong Kong fund managers plead officials to reopen border

Hong Kong’s fund managers have called on the government to reopen the city’s borders and warned of a “permanent” loss of talent even as Covid-19 cases rose in the Chinese territory.

Sally Wong, chief executive of the Hong Kong Investment Funds Association, which represents global and local groups that oversee more than $52tn in assets under management, made the plea as the financial hub’s outgoing leader Carrie Lam said on Tuesday that she would “not budge” in the face of industry pressure.

Hong Kong has been tied to Beijing’s Covid elimination policies since the start of the pandemic, with incoming travellers subject to at least a week of hotel quarantine. Despite the restrictions, the city has recorded hundreds of cases a day, with 737 new infections recorded on Monday.

The policies have cut off the city from the rest of the world, sparking an exodus of residents and causing the economy to contract by 4 per cent in the first quarter compared with the same period last year. A net loss of about 130,000 residents was reported since the beginning of this year.

• Related read: Several big Chinese investment banks in Hong Kong have reduced staffing in their investment and equity capital divisions to cut costs during the city’s drought of initial public offerings, according to bankers.

Has your work been affected by border closures in Hong Kong? Share your experience with me at firstft@ft.com. Thanks for reading FirstFT Asia and here is the rest of today’s news — Emily

Five more stories in the news

1. Coinbase to cut almost a fifth of staff The Nasdaq-listed exchange said it would cut 1,100 employees as it grappled with a slowdown in trading that has forced it to abandon its growth plans. Bitcoin has lost more than 60 per cent of its value since November, when it hit an all-time high almost $69,000.

2. Pentagon bankrolls rare earths plant The US Department of Defense has signed a $120mn deal with Australia’s Lynas Rare Earths to build one of the first US domestic heavy rare earths separation facilities, part of Washington’s push to counter China’s dominance of critical mineral supply chains.

3. Blows to Europe’s gas supplies sparks price surge Europe’s gas supplies suffered a double blow on Tuesday after a major US liquefied natural gas export terminal said it would be offline for at least three months and Russia said it would cut flows through a key route to Germany.

4. Biden to visit Saudi Arabia and Israel US president Joe Biden will meet Saudi Crown Prince Mohammed bin Salman and leaders from almost a dozen countries on a trip to the Middle East next month, Saudi Arabia and senior administration officials have said.

5. Bloomberg seeks staffer China says was released on bail US media group Bloomberg said on Tuesday it had been unable to contact a Beijing staff member detained by Chinese security services in 2020, despite government claims she was released on bail six months ago.

The day ahead

China economic data May figures for industrial production and retail sales, which are both expected to show a contraction, are set to be released today. (Bloomberg)

Nato defence meeting Ministers gather in Brussels for a two-day meeting. The event will include a working dinner to which representatives of Finland, Georgia, Sweden, Ukraine and the EU are invited. A separate meeting of the Ukraine Contact Group, hosted by the US, will take place at Nato headquarters.

Federal Open Market Committee interest rate decision US central bankers will convey their forecast policy path in an updated “dot plot”, which maps out individual interest rate projections as part of a broader set of estimates about the economic outlook.

Join leaders from FTX, Monzo, JPMorgan and more on June 16-17 from the FT Future of Finance stage at the heart of Europe’s leading tech festival, The Next Web. Register for your free digital pass today.

What else we’re reading

Is ‘Made in Japan’ back with the weaker yen? A tight labour market and rise of production outside the country by companies may limit the “reshoring” of jobs, writes Kana Inagaki. Companies are unlikely to unwind the global production bases they have spent decades finessing to reduce their exposure to currency volatility.

Alibaba and Tencent’s darkening clouds The lacklustre growth has defied expectations that cloud computing could transform the Chinese tech groups in the way that Amazon Web Services revamped the US ecommerce giant and Azure bolstered Microsoft. Competition from politically favoured vendors are adding to the pressure.

Farewell to the servant economy First there were Uber drivers who would come to your door at the push of a button. Now there are people who will bring you a packet of biscuits and ibuprofen. “On-demand” services might have made people feel wealthy, but the model is in jeopardy, writes Sarah O’Connor.

• Related read: A rise in wages is structural, with labour set to take more corporate income, writes Ellen Zentner, Morgan Stanley’s chief US economist. For more on the world of work subscribe to the FT’s Working It newsletter.

Economists Exchange: Christopher Pissarides The problems in labour markets look very different from when the former adviser to the Cypriot and Greek governments began his academic career in the 1970s, plagued by mass unemployment. But for Pissarides, who won the 2010 Nobel Prize for his work on friction in labour markets, many of the answers are similar.

Inside the risky bets that unravelled Celsius’ crypto lending When asked by one user why he had so many enemies, Celsius Network co-founder Alex Mashinsky boasted: “because I am winning and giving it all to my community”. Days later, his crypto investment firm is in crisis after it blocked customer withdrawals, a move that shook crypto markets.

Music

Members of the superstar K-pop band BTS will take a break from working together. The band’s management company Hybe, said it is not a “hiatus”, but rather that the members “will be focusing more on solo projects at this time,” a statement said. Last year, a K-pop boom drove South Korea’s entertainment listings to a record high. (AP, FT)