“API Geoeconomic Briefing” is a weekly analysis of significant geopolitical and geoeconomic developments that precede the post-pandemic world. The briefing is written by experts at Asia Pacific Initiative (API) and includes an assessment of burgeoning trends in international politics and economics and the possible impact on Japan’s national interests and strategic response. (Editor-in-chief: Dr. HOSOYA Yuichi, Research Director, API & Professor, Faculty of Law, Keio University)

This article was posted to the Japan Times on July 15, 2021:

https://www.japantimes.co.jp/opinion/2021/07/15/commentary/japan-commentary/japan-asia-coronavirus/

API Geoeconomic Briefing

July 15, 2021

How Japan can help tackle East Asia’s coronavirus surge

SAGARA Yoshiyuki,
Fellow, Asia Pacific Initiative (API)

 

 

 

 

East Asian countries have largely managed to keep their numbers of COVID-19 fatalities remarkably low compared with Europe and the United States through strict border and movement control measures. Today, these countries are seeing a surge in infections due to highly contagious variants transcending borders — challenges Japan has been struggling with.

Adding to those challenges is the fact that as East Asian countries had succeeded in containing infections, they became, paradoxically, less aware of the threat of the virus compared to Europe and the U.S. and as a result have been slow to provide vaccines.

There is disparity across the region — China, for example, has been ramping up vaccinations with surprising speed, but Taiwan is having a particularly difficult time with its drive.

But despite this, Japan is now leading the way in East Asia by tackling the challenges presented by the virus — the chain of infection hidden in communities and public spaces including restaurants and bars, the spread of “pandemic fatigue” and a slow vaccine rollout.

With all of the above in mind, certain questions need addressing with regards to East Asia: What are the challenges and blind spots for the region? How should the Group of Seven countries, the “Quad” members — Japan, the United States, Australia and India — and Japan itself try to improve the situation in the region?

 

Lessons learned

The number of deaths per million people reported in major countries in a two-week period in early July shows a noticeable decline in Europe and the U.S., which is due to effective vaccination rollouts. In the U.S., for instance, the number of deaths per million people dropped from more than 130 in February to 11 and in the U.K. from more than 200 in February to three.

China, meanwhile, has almost managed to contain infections and fatalities entirely since February.

But that is not the case for other East Asian countries, which have prevented the spread of the virus by adopting swift border and movement restriction measures. Amid the rapid transmission of the delta variant first identified in India, which is considered to be almost twice as infectious as the previous SARS-CoV-2 strains, the new variant has neutralized preventative measures that had previously proved to be effective.

Countries like Malaysia, the Philippines, Indonesia and Taiwan witnessed a rapid increase in the number of virus-related deaths from February to June.

South Korea and Singapore, which also reported a huge rise in infections at one point, managed to decrease the number of fatalities per million people to less than one by conducting extensive testing and vaccinations.

In Taiwan, a cluster, stemming from a handful of China Airlines pilots who had been quarantined at a hotel after being abroad, broke out in April. By the time it was confirmed that they contracted a COVID-19 variant, it had spread through the community as Taiwan had relaxed quarantine requirements for airline crew to three days.

A cluster also occurred in June among foreign workers at a major semiconductor packaging and testing firm known as King Yuan Electronics Corp. The company was forced to temporarily suspend all production in Taiwan, putting pressure on the chip supply chain.

In Japan, there was a sudden rise in the number of infections and severely ill patients in May following this year’s Golden Week holidays. Nevertheless, the number of fatalities per million people was trending downward during the third state of emergency, dropping to around five.

Travelers to Japan were required to quarantine for 14 days although the country lacked enough quarantine accommodation to ensure all people coming from abroad could isolate for 14 days. The government also was unable to take enforced measures to restrict people’s movements.

Even so, Japan managed to largely contain the spread of the virus in the first half of last year, adopting a cluster-based approach, with public health centers conducting retrospective contact-tracing. The government also promoted effective risk communication by asking people to avoid the “three Cs” — closed spaces, crowded places and close-contact settings.

However, the government faced allegations of having allowed infections to spread by introducing the Go To Travel and other related campaigns aimed at stimulating domestic spending. Japan also failed to strengthen its medical care system to sufficiently accept COVID-19 patients.

In low- and medium-income countries, governments are finding it difficult to gain public support for repeated lockdowns and the suspension of social and economic activities.

With this in mind, Japan can contribute to other East Asian countries by passing on the lessons learned from its experiences, while also learning from them as well.

Nonetheless, it is clear that states can no longer contain the virus only by border and movement control measures.

 

Slow rollout

One common issue that East Asian nations have been facing is the slow pace of vaccine rollouts.

The percentage of the population that had received at least one vaccine shot was around 10% in many East Asian countries, except for a few, such as Singapore (64%), South Korea (30%) and Japan (28%) as of July 6.

Despite the fact that governments in the region have managed relatively well in controlling COVID-19, they have been slow to secure vaccine supplies when compared to the U.S. and some European countries severely hit by the virus.

Even though Japan struck a basic agreement with Pfizer Inc. in July 2020 for doses of its COVID-19 vaccine co-manufactured with BioNTech SE, a German biotech startup, it was not able to participate in Pfizer’s multinational clinical trials, leading to a delay in its approval process.

Japan’s vaccine rollout was also affected by the European Union’s tightened export controls on doses produced in Europe.

Still, Japan was able to negotiate with Pfizer and the EU, and fought the good fight in the battle for securing COVID-19 vaccines. Most East Asian countries have yet to secure enough vaccine doses for their populations.

Although many have started receiving vaccines, mainly those developed by AstraZeneca PLC through the COVAX (COVID-19 Vaccines Global Access) initiative, the numbers of donated doses from the program are not sufficient.

China stands alone in East Asia in pushing ahead with vaccinations at a rapid pace. The number of vaccine shots administered per day nationwide topped 20 million in May.

While Pfizer’s messenger RNA vaccine is reported to be 95% effective against COVID-19, Chinese-made inactivated vaccines are generally less effective, as seen with those produced by Sinopharm Group Co. and Sinovac Biotech Ltd., which have efficacy rates of 79% and 51%, respectively. Still, China’s daily number of administered shots far exceeds the 3 million in India and around 1 million in the U.S. and Japan.

China announced on June 20 that more than 1 billion doses of the COVID-19 vaccine had been administered in the country.

Infectious disease experts have said that dealing with the virus is a repetition of the hammer — a period of strong measures to get transmission under control — and the dance — a period of lifted restrictions, using a recent expression that surfaced online.

China has been using extensive measures to contain the virus, combining digitized management of population movement with overwhelming testing capacity and vaccinations — something that cannot be imitated by any other country.

 

The ‘Greater China’ market

As a matter of fact, China had been taking the lead in obtaining mRNA vaccines, too.

The mRNA vaccine produced by Pfizer was co-developed with BioNTech. As early as March last year, days before Pfizer reached an agreement with BioNTech for the rights to commercialize its vaccine, China’s Shanghai Fosun Pharmaceutical Group Co. (Fosun Pharma) signed a deal with BioNTech to develop and distribute the vaccine in China.

A press release issued by Fosun Pharma and BioNTech on March 16, 2020, said that the two companies agreed to collaborate to advance the vaccine in “China” without elaborating on exactly where that covered, a matter that would later become a significant issue.

On Feb. 17, Taiwan’s Health and Welfare Minister Chen Shih-chung said Taiwan was close to signing a contract to buy doses of BioNTech’s vaccine, but the deal was put on hold at the last moment.

Some speculate that Fosun Pharma owns exclusive distribution rights to the BioNTech vaccine in the “Greater China” market, which includes Taiwan.

While the press release on the two companies’ deal in March 2020 simply mentioned “China,” on Dec. 11, 2020, the Hong Kong government announced that Fosun Pharma seemed to own distribution rights for the BioNTech vaccine not only in mainland China, but also in Hong Kong, Macau and Taiwan.

It is not uncommon in the Chinese pharmaceutical industry to sign a sales contract covering the Greater China market.

However, when a startup which owns a core technology for an innovation gives an exclusive production or distribution right to a Chinese company, and if the term “China” as written in the contract is interpreted as “Greater China,” Taiwan will consequently be excluded from having access to the product.

There is a threat that this could bring about serious vulnerabilities not only regarding vaccines and medical supplies, but all supply chains involving Taiwan in the future.

 

‘Pseudo-multilateralism’

Vaccinations are progressing in many European countries and in the U.S., and people are now beginning to regain freedom of movement. At the G7 summit held in the U.K. in June, leaders agreed to accelerate vaccinations in order to end the pandemic in 2022 and to provide the world with at least 1 billion doses over the next year.

Meanwhile, Fosun Pharma said it was setting up a joint venture with BioNTech to make and sell the mRNA vaccine in China, with manufacturing capacity to produce up to 1 billion doses a year.

The mRNA vaccine would become a strong weapon in China’s vaccine diplomacy drive.

In a teleconference with U.S. Secretary of State Antony Blinken on June 11, Beijing’s top diplomat and politburo member, Yang Jiechi, rejected what he called “pseudo-multilateralism based on interests of small cliques and group politics,” in an apparent warning to G7 member states.

Perhaps Beijing believes it supported multilateralism during the four year reign of the Trump administration. However, what it calls multilateralism appears to be a closed concept backed by authoritarianism and parochial nationalism that benefits only those in power and certain interest groups.

G7 leaders recognized in their communique that ending the pandemic in 2022 will require the vaccination of at least 60% of the global population — some 4.7 billion people.

In order to do that, it will require 9.4 billion doses if each individual is to receive two shots of a vaccine.

A fierce competition has started between G7 countries and China on which can produce and distribute vaccines worldwide more expeditiously. And East Asia is at the forefront of this competition.

Initially, Quad members were planning to provide vaccines to countries in the Indo-Pacific region, including those in East Asia.

India was anticipated to be the major provider, mass producing the vaccine developed by AstraZeneca PLC and University of Oxford and supplying 66.3 million India-made doses to 95 countries as of May 29.

However, vaccine supplies under the initiative stagnated with the surge in infections that has been seen in India.

 

Fair distribution

Tokyo now has an opportunity to play a role.

Japan co-hosted an online summit of the COVAX program on June 2 and pledged to work to ensure fair distribution of vaccines worldwide.

As a first step, Japan donated 1.24 million doses of the AstraZeneca vaccine to Taiwan and 1 million to Vietnam. Japan has began providing Indo-Pacific countries with millions of doses from this month.

The government reached an agreement with AstraZeneca to obtain 120 million doses of its vaccine. Production of undiluted solutions, vial filling and packaging of the vaccine will be conducted domestically in Japan.

Although it is not a vaccine purely made in Japan, doses produced in the country will bring hope to East Asia.

With the world at a crossroads threatened by variants of the virus, now is the time for democratic powers, specifically G7 member states, Australia and India, to come together to build back free, open and better multilateralism.

The important first step of such efforts is to distribute safe and highly effective vaccines fairly throughout the world.

Japan should strongly push forward its own style of vaccine diplomacy — building resilient vaccine supply chains by supporting the construction of cold-chain logistics and supplying vaccines manufactured domestically, while sharing within the region its lessons learned from coping with the pandemic. This will help all concerned to overcome the East Asian COVID-19 paradox.

 

Disclaimer: The views expressed in this API Geoeconomic Briefing do not necessarily reflect those of the API, the API Institute of Geoeconomic Studies or any other organizations to which the author belongs.