June 1, 2021

Asia

HONG KONG: Weighing the latest evidence on a potential foreign exodus

BY Gabriel Wildau

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Hong Kong has purchased enough vaccines for the city’s entire population, but distrust of the government is fueling vaccine hesitancy. As of 1 June, only 21% of the city’s total population of 7.5mn had received at least one vaccine dose, and 16% had received two. Last month, a health official warned that only three months remain before the first batch of Pfizer/BioNTech doses would expire.

After vaccinations began in late February, the seven-day moving average of daily jabs peaked at over 43,000 on 13 April before falling to around 27,000 by 27 May, then recovering somewhat to 33,480 on 1 June. The current daily pace of 0.43 jabs per 100 people is well above India at 0.18 but far below Singapore at 0.77. More than half of all doses administered are Pfizer/BioNTech, while the remainder are from Sinovac.

Distrust of the Hong Kong government following the 2019 protest movement and Beijing’s subsequent political crackdown appears to be the main reason for vaccine hesitancy, but additional factors are also contributing. The city has suffered fewer than 12,000 cases and only 210 deaths since the pandemic began, and confirmed cases have stayed below 20 for all but one day since mid-March. Vaccine hesitancy is also an issue in other parts of Asia where infection rates are low, including Australia and Taiwan, but recent outbreaks in Taiwan and around Southeast Asia may persuade residents that vaccination is advisable. Social media is also rife with misinformation and conspiracy theories. A ten-day suspension of the Pfizer/BioNTech rollout in March due to damaged packaging – which officials later said did not pose a safety risk – may have also dented public confidence. A poll in January showed that only 37% of the city’s population intends to seek vaccination.

The government’s options for encouraging vaccinations appear limited. Some hotels are offering cash incentives for staff to get vaccinated, with additional bonuses offered if 70% of employees receive vaccines. Hong Kong Chief Executive Carrie Lam has welcomed such measures but rejected the idea that the government should offer similar incentives. A “vaccine bubble” scheme launched on 29 April allows restaurants, bars, and entertainment venues to re-open or operate at increased capacity for vaccinated patrons. Uptake by businesses – who are required to segregate vaccinated and non-vaccinated patrons within the same establishment – has been weak, however, with many operators complaining of excessive complexity.

The risk for Hong Kong is that persistently low vaccination rates force authorities to maintain travel restrictions as other regions lift them. As previously discussed, the National Security Law and the broader erosion of Hong Kong’s autonomy is unlikely to trigger a mass exodus of foreign business. Still, prolonged travel restrictions would add a new incentive for multinationals to reduce their presence or at least to accelerate staff localization. On 7 May, the government shortened mandatory quarantine periods for some inbound travelers, but almost all travelers remain subject to a 14 or 21-day hotel quarantine on arrival. Apart from plans to allow quarantine-free entry from the mainland once Hong Kong achieves several weeks of no local infections, authorities have not announced plans to ease travel restrictions further.

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