Passengers wearing masks at Hong Kong Station. A recent uptick in coronavirus cases in the city forced officials to delay the start of an air corridor between Hong Kong and Singapore
Passengers wearing masks at Hong Kong Station. A recent uptick in coronavirus cases in the city forced officials to delay the start of an air corridor between Hong Kong and Singapore © Chan Long Hei/Bloomberg

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Hello from Wellington and Beijing today.

Throughout the coronavirus pandemic people around the world have looked to Asia-Pacific — the initial frontline of the crisis — for inspiration to rebuff the deadly disease and then rebuild battered economies. 

Our main piece today looks at the region’s mixed success with travel bubbles and fast-tracked visa systems during the pandemic. We posit there may be a lesson for vaccine diplomacy.

In Policy watch we look at the possibility of review clauses being used to break the deadlock in EU-UK trade talks, while our chart of the day highlights a landmark for China’s currency.

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Resurgence of outbreaks across Europe and US causes jitters in China

When Singapore and Hong Kong announced a travel bubble earlier this month, the lion city’s transport minister, Ong Ye Kung, ventured that the initiative could serve as a model for the world.

“If we can demonstrate to the world that this is successful, it becomes a good reference point [for other countries],” said Ong, adding: “This is as close as it gets to pre-Covid travel.”

The new scheme, which would have seen some travellers between the two Asian financial hubs skip quarantine, was postponed after a spike in local transmission in Hong Kong.

The episode is a clear warning over the tenuous nature of any travel bubble, trusted traveller scheme or other such arrangement: months of meticulous planning will be undone in an instant by an unforeseeable coronavirus outbreak. 

While the Singapore-Hong Kong deal may still prove successful — and the postponement a sage decision — other examples from around the region illustrate similar systems unravelling or failing to take flight. 

In April, South Korean companies began chartering flights to get engineers and executives to their factories in closed-off foreign countries, including China and Vietnam. Since then, as many as 10,000 Korean businessmen have entered China through special processes set up under a bilateral agreement in May, with the travellers benefiting from one-off visa approvals and, in the case of some regions, fast-tracked quarantine.

Earlier this month, however, employees from tech giant Samsung were told two scheduled chartered flights to Xian and Tianjin had been grounded. The move came amid signs South Korea was being hit by a third wave of coronavirus, prompting tighter social-distancing measures across Seoul. Korean companies and diplomats are still trying to gauge whether these flight cancellations mean the fast-track scheme will be put on ice until the risk subsides.

There are reasons to be wary. After the unprecedented lockdown of the world’s most populous country earlier this year, China has pursued a strategy of total virus elimination. The resurgence of outbreaks across Europe and the US is causing jitters in Beijing, spurring tighter restrictions.

A screen displays people's temperature readings as they pass through a health checkpoint at a shopping mall in Beijing, China
A screen displays people's temperature readings as they pass through a health checkpoint at a shopping mall in Beijing, China © Yan Cong/Bloomberg

In early November, China’s embassies in the UK, Italy, France, and a number of other nations with high daily cases, released new rules for travellers to China, requiring two medical tests within 48 hours of flying — one blood test for antibodies and one swab test for virus RNA. 

The British Chamber of Commerce in China criticised the abruptness of the announcement, while the EU chamber said the return of travel restrictions had “dealt a serious body blow to business sentiment”.

“European companies are worried that the list of affected countries will quickly expand, and that companies will be forced to re-evaluate where they assign their staff as a result,” the chamber said.

Despite those complaints, the foreign ministry in Beijing defended the measures as a necessary response to rising infection rates globally, arguing that the number of infected individuals arriving in China had surged 45 per cent in October. 

“Given the circumstances . . . we have strengthened epidemic control work at the far end, so as to protect China’s hard-won domestic control of the epidemic,” a ministry spokesperson said.

Even in the Pacific, New Zealand’s efforts to resume quarantine-free travel to cash-strapped Pacific island nations remains elusive. That is despite few serious outbreaks for months in New Zealand, nor any cases at all in many Pacific countries. In Australia, politicians have stopped people travelling across state lines.

Asia’s experiences come against a backdrop of no universal rules for safe travel or quarantine. The subsequent ad hoc systems, like the Singapore-Hong Kong bubble and the China fast-track visas, remain opaque, the rules fluid and subject to change. This offers little security to people, companies or governments alike.

These examples also underscore that across countries — perhaps cities — where virus elimination has been obtained, reopening borders before all travellers are vaccinated with a trustworthy dose will be highly unlikely. The upshot: until a safe vaccine is universal, things won’t get back to normal. 

Throughout 2020 there have been calls for multilateral groups such as the G20 and G7 to guide the world through the pandemic and ensure the continued safe movement of people and goods. That leadership has not emerged.

These lessons from Asia, Trade Secrets hopes, might now at least prompt a redoubling of efforts among politicians, diplomats and health officials towards co-operation and co-ordination when it comes to distributing Covid-19 vaccines

In the meantime, we lean on West Ham fans for the final word on quarantine-free (travel) bubbles: “They fly so high, nearly reach the sky . . . Then like my dreams they fade and die.”

Charted waters

China’s currency is set to record its best six months against the dollar on record as the country’s containment of coronavirus and economic recovery provide a competitive advantage investors expect will last well into 2021. The rise of the renminbi, which was under pressure earlier this year, underscores a reversal of fortunes as China shifted from being the centre of the pandemic to having it largely under control as cases surge in the US and Europe.

Column chart of change in renminbi-dollar exchange rate over previous half-year (%) showing that China's currency is on track for its best six months on record

Policy watch

EU chief Brexit negotiator Michel Barnier wears an EU flag-themed mask during a break in talks
EU chief Brexit negotiator Michel Barnier wears an EU flag-themed mask during a break in talks © Justin Tallis/AFP/Getty

Negotiators are exploring the idea of review clauses to break the deadlock in EU-UK trade talks, with the possibility that parts of the deal could be revisited several years after they take effect.

EU diplomats said the two sides were discussing whether review clauses and transitional arrangements had the potential to ease the pain of compromises needed to get an agreement done — but warned that both sides still had very different views of how this might work.

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  • A look inside the latest iPhone 12 shows the growing importance of Apple’s South Korean suppliers, who now account for 26.8 per cent of the smartphone’s value. 
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