It used to be an international business centre, the bustling, vibrant commercial gateway to China and the rest of Asia.

But after weeks of lobbying by Hong Kong’s global business community for the government to ease border restrictions and harsh mandatory quarantine to bring it into line with other trading hubs, the authorities have instead responded with even tougher measures.

At her regular press conference on Tuesday, Hong Kong’s chief executive, Carrie Lam, announced most exemptions from the city’s mandatory and self-funded quarantine periods of up to 21 days will soon be cancelled. The government followed it up on Wednesday by announcing that Covid patients would have to spend a further two weeks in hospital after they had recovered.

Hong Kong has reported just one local case since mid-August and, eager to have China reopen its borders to the city, Lam has made it clear she has prioritised Beijing’s demand for zero Covid over restarting international travel and “living with the virus”.

The changes push Hong Kong further into a life dictated by China’s strategy as the rest of the world is opening up, which according to business and expatriate groups is driving people out of the city. It adds to already record levels of population loss as Hongkongerss fled the national security crackdown.

Hong Kong has reported a relatively low 213 deaths and 12,300 cases in the pandemic, largely due to its early border closures. It has since developed a labyrinthine set of entry requirements depending on a traveller’s point of origin, vaccination status, visa status, and quarantine hotel bookings.

The city mostly bans non-residents, and requires entrants to undergo up to 21 days of quarantine. Until Lam’s announcement on Tuesday there were exemptions or shorter quarantine stints for some residents, workers, diplomats and business figures – controversially including Nicole Kidman to film a movie.

The rules have changed repeatedly, at times suddenly banning entrants from entire countries, leaving Hongkongers stranded overseas. Mandatory self-funded quarantine has been criticised by leading health professionals as unnecessarily long and potentially harmful. Coupled with the wholesale changes to Hong Kong’s political freedoms and daily life, those who had moved to Asia’s world city for work are starting to reassess.

“It’s the fact that it’s changing all the time,” said James Arnold, an Australian finance worker, shortly before leaving Hong Kong after five years living in the city with his family.

“People I speak to say that they’re not travelling again until they know. So then the pressure builds up, and now the conversation is: I haven’t seen my mum for two years.

“With Hong Kong particularly being so opaque, it’s very difficult, and that opaqueness is not determined by them, it’s determined by Beijing.”

One American expat living in Hong Kong said he was considering leaving after a decade in Hong Kong.

“Other economies are opening up, including most recently Thailand. However if I leave I have to do three weeks in a quarantine hotel. The other reason is ageing parents, and they are not able to come visit me due to the restrictions.”

The number of non-mainland foreign companies is falling, with US companies dropping for a third straight year. Business representatives including the US Chamber of Commerce have voiced frustration at being unable to attract staff or make long-term decisions, and many are now pushing to restructure or relocate to Singapore, or to cities in mainland China such as Shanghai.

Last weekend the Asia Securities Industry and Financial Markets Association warned the government that its approach risked Hong Kong’s status as a global financial centre.

Faced with the uncertainty of the border closures on top of the worsening security and political environment, foreign chambers of commerce have warned that many existing companies are leaving, downsizing or moving staff to other Asian cities.

A survey by the US Chamber of Commerce earlier this year found more than 40% of its members were considering leaving Hong Kong, but its president, Tara Joseph, said the government was not responding to their concerns. “We’re at the point where it just feels like we’re talking to a wall,” Joseph told Bloomberg. “So we’ve stopped writing letters at this point.”

‘People don’t need to be in Hong Kong for access to China’

Talks are under way between Hong Kong and Beijing counterparts about opening travel between the two regions, with China insisting Hong Kong’s approach be closely aligned to its own.

China has responded to outbreaks with an elimination strategy of lockdowns, mass testing and travel restrictions, and has made it clear it expects Hong Kong to maintain a similar standard of pandemic control.

And so Hong Kong appears ready to sacrifice its status as an international hub, impose long quarantine on returning residents, and extra quarantine for discharged patients – a move described by one health expert as wasteful but by another as likely to help the negotiations with China.

Lam has said that international businesses were in Hong Kong because of access to China, and so would not want global travel to resume without their crucial mainland access.

But Arnold, citing Beijing’s increasing control over the city, said Lam was missing a key point: “There’s a point we get to with Hong Kong, particularly with changes to national security laws, where people don’t need to be in Hong Kong for access to China.

“If they’re comfortable working in China they will go [to be based in China].”

The departing international expats and companies join the separate and massive exodus of Hongkongers fleeing the Beijing-led crackdown on democracy. A phone survey this month by the Chinese University of Hong Kong found 42% of respondents indicated they would emigrate given the chance.

The specific impact of pandemic measures on respondents were unclear, but Dr Victor Zheng Wan-tai, associate director of CUHK’s Institute of Asia-Pacific Studies, which ran the poll, said the exodus was driven by politics but pandemic-related push/pull factors for people likely offset each other.

“Although you can consider the greater seriousness of Covid-19 in western countries might hinder intentions to leave, the welcoming and [increasingly] relaxed measures in the UK, Canada, and Australia in fact also encourage them to do so,” he told the Guardian.