(Refiles to fix typo in paragragh 4)
* Shorter quarantine period to take effect on Feb. 5
* Social distancing measures to be extended until Feb. 17
* Schools to halt face-to-face lessons until Feb. 21
By Farah Master and Twinnie Siu
HONG KONG, Jan 27 (Reuters) - Hong Kong will cut quarantine for arriving travellers to 14 days from 21 starting Feb. 5, leader Carrie Lam said on Thursday, a move that follows intense lobbying from finance executives and diplomats who said the measure was hurting competitiveness.
Tough coronavirus rules have made Hong Kong one of the world's most isolated cities, with flights down as much as 90%.
Residents returning from more than 160 countries have been required to quarantine for 21 days in designated hotels will now have to spend 14 days in a hotel, followed by seven days of self-monitoring, with further details to be announced. She did not say which countries would be covered by the new rules.
"It is not because of pressure from anybody. It's just because of science...that Omicron has a relatively short incubation period," she told a news briefing, adding that the measure was still unlikely to satisfy the business community.
On Wednesday, the territory's European Chamber of Commerce said in an internal report that weeks of quarantine requirements were affecting desirability and risked an exodus as companies moved staff to Singapore and the South Korean capital Seoul.
The easing comes as the government tightens rules in the Chinese territory to curb the spread of the highly transmissible Omicron variant of the coronavirus, locking down thousands in a congested housing complex and government facilities.
Schools, playgrounds, gyms and most venues are shut, while tens of thousands of people must do daily coronavirus tests.
Lam said citywide restrictions would be extended until Feb. 17, from a previous date of Feb. 4. Schools will not resume face-to-face classes until Feb 21.
This week the government announced that some civil servants could work from home, with some bank staff receiving similar instructions.
Thursday's 164 new infections were a record since the pandemic started in 2020. It was a fifth consecutive day of cases in the triple digits after an outbreak linked to the Kwai Chung housing estate.
Lam said the city needs to raise its vaccination rate to around 90% from 70% currently before authorities can consider adapting current policies.
"I cannot stand seeing a lot of people dying in my hospitals so we will try our best to raise our vaccination rate."
(Additional reporting by Anne Marie Roantree and Jessie Pang; Writing by Farah Master; Editing by Clarence Fernandez and Mark Heinrich)