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To reopen their economies, Asia’s ‘COVID-zero’ economies must learn to live with death

June 17, 2021, 9:47 AM UTC

This is the web version of Eastworld, Fortune’s newsletter focused on business and technology in Asia. Subscribe here to get future editions in your inbox.

Greetings from Hong Kong, where health authorities this week lowered the age of eligibility for getting the Pfizer-Biotech vaccine from 16 to 12. That was big news in my household. My 15-year-old son got his first jab Tuesday.

Getting him fully vaccinated will add to my peace of mind. But beyond that, it won’t have much practical impact on our lives.

In Hong Kong, the rate of new coronavirus cases per day has been in the single digits since April. For months, we’ve been free to move about the city more or less as we please—with or without antibodies.

And getting our shots doesn’t make it any easier for us to travel. Japan, where my kids usually spend part of the summer, isn’t admitting foreign visitors without a residence visa (unless they’re Olympic athletes). Borders of Bali and Australia, my son’s two top holiday destinations (he’s a keen surfer), also are closed to tourists. Ditto for the Chinese mainland.

We could fly to the U.S., since we are citizens. But on our return to Hong Kong we’d have to endure hotel quarantine for at least two weeks—even though immigration officials could easily verify via our Hong Kong identity cards and government health records that we’ve been properly vaccinated here. And so, shots or not, for the second summer in a row, we’re staying put.

Yes, I know: this a “first world” problem. In many, if not most, developing countries, the virus still rages, vaccines remain in short supply, and rich countries still aren’t doing enough to help.

But this week, as my Facebook and Instagram accounts blow up with pictures of friends in the U.S. and Europe celebrating the return of restaurants, movie nights, and normal life, I can’t help but marvel at the paradox: throughout the Asia-Pacific region, dozens of “COVID-zero” economies—places that succeeded brilliantly in containing the virus through lockdowns and strict border closures—now seem incapable of mapping out realistic strategies to reopen.

Consider Hong Kong and Singapore, two cities whose very livelihoods depend on functioning as global financial hubs. In Hong Kong, vaccines have been available for more than three months, but only about 17% of the city’s 8 million residents have received both doses. Property tycoons and local merchants have sought to entice residents into getting their jabs by sponsoring “lucky draws” offering prizes, including Rolex watches, Teslas, a million-dollar apartment, and 300 taels of pure gold.

Hong Kong chief executive Carrie Lam insists zero new daily infections isn’t an absolute pre-requisite for reopening. But she thinks the vaccination rate is still too low to do so. The government, she has declared, won’t “sacrifice the safety of the people just to rush reopening borders.” Many health experts warn that, at the current rate of vaccination, Hong Kong’s borders may remain closed until next year.

A proposal to create a “travel bubble” between Hong Kong and Singapore has been delayed twice because of small outbreaks. Hong Kong has promised to expand a program that grants the city’s four main financial regulators the power to waive quarantine requirements for senior executives from the 500 largest companies on the Hong Kong stock exchange. But that has failed to mollify fed-up global bankers.

Singapore’s vaccination drive has been more successful than Hong Kong’s; about 35% of the city’s population are fully inoculated. But the city has been forced to scrap plans to host a number of high-profile international gatherings in recent months, including a meeting of the World Economic Forum and an Asia security summit organized by the International Institute for Strategic Studies.

In recent weeks, city authorities have struggled to contain an outbreak that originated in a shopping mall and food center; they reported 19 new cases Wednesday, prompting Finance Minister Lawrence Wong to declare that the government would reassess “the timeline and the scope” of a plan to roll back social distancing restrictions on restaurants and fitness centers.

A host of other economies in the region—including Australia, South Korea, New Zealand, Taiwan, Thailand, and Vietnam—wrestle with similar dilemmas. These jurisdictions have used social distancing measures, lockdowns and border closures to keep infections and deaths from the virus low. But their vaccination rates lag far behind those in the U.S. and Europe. And health experts in many Asian economies fear they will not reach herd immunity, the threshold at which widespread transmission of the virus ceases, until next year—if, indeed, they are able to reach it at all.

China is an exception of sorts. As Grady notes below, that nation is set to administer its 1 billionth COVID-19 vaccine dose by the end of this week, and plans to vaccinate 40% of its population by the of the month. But China shares the zero-tolerance approach to fighting COVID. Authorities have tightened national border restrictions and locked down several districts in the southern megacity of Guangzhou in response to an outbreak of about 150 infections in that city since May 21. A spokesman for the Guangzhou Health Commission declared “we cannot afford to be complacent and lower our guard.”

John Power, a correspondent for Hong Kong’s South China Morning Post, notes in a thoughtful piece that, while death counts have fallen dramatically in high vaccine coverage countries like the U.S., Israel, and Britain, COVID mortality rates in all three remain well above those in Australia, New Zealand, Hong Kong, Singapore, and Vietnam, where a total of just over 1,200 people have died from the disease. He points out that many Asia-Pacific territories have managed to hold deaths from COVID below deaths from the flu.

That, Power argues, poses a vexing ethical question: how many COVID deaths should a society accept in exchange for returning to something close to pre-pandemic openness?

As Power puts it: “Unless they remain cut off from the world indefinitely, even as North America and Europe restart travel and learn to live with the virus, societies that avoided the worst of the pandemic will ultimately have to reassess their tolerance for death.”

It’s a question leaders of the “COVID-zero” economies can’t continue to ignore.

More Eastworld news below.

Clay Chandler
clay.chandler@fortune.com

This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com

Eastworld news

A-leak-baba

A marketing consultant illegally collected 1 billion sensitive data items including usernames and phone numbers from Chinese tech giant Alibaba since 2019, according to a Chinese court filing. The court ruled that the firm was guilty of using the data to serve its clients and sentenced a staffer and his employee to jail terms of over three years and imposed a $70,000 fine. Alibaba says the firm never sold any of the data, but would not comment on how many of its 925 million users were affected by the leak. Wall Street Journal

Apple Daily

Hong Kong authorities raided the offices of pro-democracy newspaper Apple Daily on Thursday, arresting the editor-in-chief and four other senior employees. Hong Kong authorities allege the paper may have violated Hong Kong’s national security law through publishing articles that called for foreign powers to sanction Hong Kong and Beijing for enacting draconian measures on the city. Apple Daily’s journalistic union called the raid a “blatant violation of press freedom,” while Hong Kong officials claimed the city was cracking down on “criminal activities” and not “normal journalistic work.” Hong Kong Free Press

Lift off

China launched three astronauts into space on Thursday, marking China’s first manned mission in five years and the first crewed mission in China’s quest to build its first space station. China has long wanted its own space station after being locked out of the International Space Station due to objections from the U.S. China aims to complete construction on its station by the end of 2020, and the three-man crew is expected to stay in orbit for three months while testing life support and maintenance systems on un-manned modules China had previously launched into space. CNN

Build Back Better World

On Sunday, G7 leaders announced the launch of Build Back Better World (B3W), which U.S. President Joe Biden bills as a counterweight to China's massive global infrastructure scheme the Belt and Road Initiative. Biden says B3W will help address a $40 trillion shortfall in infrastructure spending in developing world, and will be focused on "high-standard" infrastructure projects. Still, experts say that the B3W initiative cannot rival China's BRI without financial backing, and G7 leaders failed to put a dollar-value on how much money they are willing to contribute to B3W. Fortune

Markets and movers

Blackstone -- The U.S. private equity firm is buying Chinese property giant SOHO China for $3.05 billion, SOHO China announced on Thursday. SOHO China owns 1.3 million square meters of commercial properties in China, and is known for its futuristic office buildings in the country. Reuters

Didi -- Chinese regulators have launched an antitrust probe into Chinese ride-sharing giant Didi Chuxing, just as the ride-hailer is preparing to list in a blockbuster U.S. IPO later this year. Amid a broader crackdown on China’s tech industry, the government is examining if Didi squeezed out smaller rivals and how Didi sets prices for its core ride-hailing business. Reuters

Bytedance -- The Chinese Internet giant and TikTok owner doubled its revenue in 2020 to $34.3 billion while its gross profit rose 93% to $19 billion, according to an internal company memo. Bytedance has 1.9 billion users across TikTok and its platforms in China like the TikTok-equivalent Douyin and news aggregation app Jinri Toutiao, the memo said. Wall Street Journal

Hog futures -- China’s hog futures hit record lows this week, plunging 30% since the hog futures were first launched on the Dalian Commodity Exchange in January. China culled over half of its pig supply in 2018 and 2019 after widespread outbreaks of African Swine Fever, but the shortage has turned into a glut as farmers have repopulated pig farms. Financial Times

Twitter -- On Wednesday, Indian IT minister Ravi Shankar Prasad accused social media platform Twitter of failing to comply with new rules India put into effect in late May, saying it has chosen a path of “deliberate defiance” against the Indian government. Twitter says it is making “every effort” to comply with India’s guidelines. Twitter previously criticized the rules for threatening India’s freedom of expression.  Nikkei Asian Review

Krafton -- The South Korean video game giant behind the global hit PUBG is set to raise as much as $5 billion in what will likely be South Korea’s largest-ever IPO, according to a company filing. Krafton estimates its value at over $30 billion, and it is set to debut on the Korea Exchange on July 22. Bloomberg

SK Telecom -- South Korea’s largest mobile carrier plans to invest up to $5 billion in the next three years as it seeks to become South Korea’s version of the Japanese fund Softbank. SK Telecom’s board decided last week to split the family-controlled conglomerate into two companies. One will focus on SK’s traditional mobile business while the other, tentatively named SKT Investment Co., will focus on investments and IPOs. Bloomberg

Final figure

1 billion

China is set to administer 1 billion COVID-19 vaccine doses by the end of this week, signaling that the country is on track to meet its ambitious goal to vaccinate 40% of its population by this month. China has provided enough shots to vaccinate 33% of its population, roughly on par with the European Union, but a higher portion of people in China have likely gotten at least one dose given how quickly China’s campaign has ramped up. China has used a mix of carrots and sticks to boost its once lagging vaccine campaign, and the country is now on pace to vaccinate 70-80% of its population by this fall. The Guardian

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