Hong Kong's status as an international hub has been "undermined" by strict coronavirus border controls, outgoing leader Carrie Lam admitted Friday, just a day after saying she would not further lift restrictions before departing.

The once vibrant Asian business hub is mired in its third year of pandemic isolation as it hews to China's zero-Covid strategy, which seeks to control outbreaks with lockdowns, social distancing and border controls.

Hong Kong last month reopened to vaccinated non-residents but international arrivals must still undergo seven days of quarantine.

"The border control measures have really made people very impatient, and of course, have undermined Hong Kong's status as a hub," Lam said in an interview with CNBC.

"If you cannot travel freely to other places and into the mainland, how could you be a hub?"

Lam is due to step down on June 30 after a five-year term that saw huge democracy protests and Covid-19 outbreaks that left more than 9,000 people dead.

On Thursday Lam announced that pandemic restrictions will not be further loosened during her remaining time in office.

But in the Friday interview, Lam agreed that a more flexible quarantine policy would bring people back to Hong Kong.

"Once we could bring down the hotel quarantine period or, as some have suggested, replace it with home quarantine measures, I'm sure we will be seeing a lot of people coming to Hong Kong," she told CNBC.

Addressing lawmakers on Thursday, Lam said Hong Kong was stuck between China's zero-Covid approach and foreign countries' decision to live with the virus.

Beijing remains committed to completely quashing all outbreaks and President Xi Jinping reaffirmed the policy on Thursday, saying it must be "unswervingly upheld", according to state news agency Xinhua.

Lam on Thursday said there was no chance of reopening the border with mainland China in the near future.

Hong Kong's next leader John Lee has said one of his top priorities is to reconnect the city with the mainland, though he gave no specific timetable.

Lee previously acknowledged that travel curbs have caused "inconvenience" for international travellers but made no commitment to reduce the quarantine period.

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