9 July 2021

Free to View Asia COVID-19 & Tracker Economics - Asia

Tougher restrictions

 As COVID-19 cases continue to surge across Asia, more Yun Liu authorities have re-imposed restrictions or even lockdowns Economist The Hongkong and Shanghai Banking Corporation Limited  But this has increased the urgency to ramp up vaccine Frederic Neumann procurement and roll-out in the region Co-Head of Asian Economics Research The Hongkong and Shanghai Banking Corporation Limited  Some economies have started pilot programmes to revive tourism, but a full re-opening may take a long time Maitreyi Das Associate Bangalore Déjà vu

No end in sight just yet. The Delta variant is causing daily new COVID-19 cases to surge to new record highs across Asia, prompting more governments to re-impose tougher restrictions. This is particularly evident in ASEAN, where cases in Indonesia and Vietnam have been rising sharply. The former has extended its tightening measures throughout the country until 20 July, while the latter will impose a strict lockdown in Ho Chi Minh City (HCMC) from 9 July for 15 days. Meanwhile, just two weeks before the Tokyo Olympics, Japan is set to declare its fourth state of emergency in Tokyo from 12 July to 20 August, raising the possibility of no spectators attending the games. Meanwhile, Singapore is the only country that has decided to ease its social restrictions from 12 July, as new cases remain low. Urgency on The recent outbreaks in the region has alerted the authorities that the key to exiting the pandemic is to accelerate vaccine procurement and roll-out. Singapore tops the region, as close to 40% of its population has been fully vaccinated, on track to achieve “herd immunity” by 3Q21. Mainland China has administered over 1.3bn vaccine doses as of 6 July, which means that almost 70% of its population has been vaccinated with at least one dose, according to our estimates. Meanwhile, ASEAN countries that are lagging behind are also tapping all available resources and, encouragingly, progress has been made recently. Vietnam will likely receive more than 60m vaccine doses, enough to inoculate around 30% of its population by the end of 2021. Malaysia (1m) and Thailand (1m) have received more vaccine doses from the US and China, respectively, while Indonesia is expected to receive an additional 4m vaccine doses from the US. Pilot island tourism Despite surging cases, some tourism-dependent countries have kick-started pilot programmes. Thailand has launched its no-quarantine “sandbox” pilot programme in Phuket from 1 July and has welcomed over 2,000 visitors in the first week. Meanwhile, Vietnam also announced an easing of restrictions for fully vaccinated travellers in Quang Ninh province from 1 July. However, low vaccination rates raise questions on how quickly the pilot programmes can be turned into a full and sustained border re- opening. We believe the earlier countries can reach “herd immunity”, the quicker a meaningful recovery in tourism can be achieved.

This is an abridged version of a report of the same title published on 9 July 2021. Please contact your HSBC representative or email [email protected] for more information.

Disclosures & Disclaimer Issuer of report: The Hongkong and Shanghai Banking Corporation Limited This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Research at: https://www.research.hsbc.com

Free to View ● Economics - Asia 9 July 2021

Asia COVID-19 and Vaccine Tracker

Chart 1: Total confirmed vaccine doses by country and territory (% of population)

Most economies have % of population secured enough vaccine 400 doses to reach “herd immunity” 300

200

100

0 AU NZ HK SK JN MA SG TH PH ID VN **IN TA *CH BA Oxford University Pfizer Janssen (J &J) Moderna Sinovac Novavax Gamaleya Research CanSino Biologics Sinopharm Corbevax Others

Note: *CH – Mainland China. Duke University’s data do not include domestic supply for mainland China (not made publicly available). **Does not include domestic production. Source: Duke University Health Innovation Center, HSBC

Chart 2: Percentage of people who received at least one dose and were fully vaccinated

Almost 40% of Singapore’s 80.0 68.46 population has been fully 70.0 62.75 vaccinated 60.0 50.0 40.0 32.56 30.12 30.0 26.49 25.33 20.98 20.93 15.94 20.0 13.88 12.13 11.81 11.3 8.26 10.0 3.79 3.54 0.0 *CH SI HK KR JN AU MA IN NZ SL ID TH TA PH VN BA People vaccinated per 100 Fully vaccinated per 100

Note: *CH – Mainland China data are our estimated share of people vaccinated from the total number of doses given. As of 10 June, 16% of the population is fully vaccinated. Source: Our World in Data, HSBC

Chart 3: Cumulative confirmed COVID-19 cases per one million population

Number of confirmed COVID- No of confirmed cases % 19 cases (per one million 120,000 6.0 people) in Asia remains far below those in Western 100,000 5.0 economies 80,000 4.0

60,000 3.0

40,000 2.0

20,000 1.0

0 0.0 US UK MA IN PH SL SG ID JN BA TH SK HK AU TA NZ VN *CH Cases per m Mortality rate

Note: *CH – Mainland China. Source: CEIC, HSBC

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Free to View ● Economics - Asia 9 July 2021

Asia COVID-19 and Vaccine Tracker

Chart 4: Daily vaccination rate per economy (7-day moving average) 7 dma 7 dma Vaccination rates in Malaysia 25,000,000 300,000 and the Philippines continue to pick up as the number of 20,000,000 250,000 new cases remains elevated 200,000 15,000,000 150,000 10,000,000 100,000

5,000,000 50,000

0 0 CH* IN JN ID MA PH TH AU TA SL SK SG HK VN NZ BA Latest daily doses per m of population 1 week ago Latest daily doses per m of population 1 week ago

Source: Our World in Data, HSBC. Note: *CH – Mainland China.

Chart 5: Daily vaccine rate per million of population

Per m Singapore now tops the 18,000 region in daily doses per 16,000 million population 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 SG CH* MA HK JN AU SL TA NZ TH ID IN PH SK VN BA Latest daily doses per m of population 1 week ago

Source: Our World in Data, HSBC. Note: *CH – Mainland China.

Chart 6: Projected timeline for “herd immunity” (75% of the population), given the pace of daily

The timeline to reach “herd SG immunity” is moving closer *CH for many economies HK JN MA AU SL TA NZ TH IN ID SK PH VN BA Jan-21 Jul-21 Feb-22 Aug-22 Mar-23 Sep-23 Apr-24 Nov-24 May-25 Dec-25

Source: Our World in Data, HSBC. Note: *CH – Mainland China. Grey bar indicates economy with “herd immunity” timelines beyond December 2025.

3 Free to View ● Economics - Asia 9 July 2021

COVID-19 in Asia

Chart 7: Indonesia Chart 8: Malaysia

Confirmed cases Malay sia Daily change Daily new cases in Indonesia Confirmed cases Indonesia Daily change 2,500,000 36,000 900,000 10,000 are at new historic highs; 800,000 9,000 30,000 Malaysia’s new cases are 2,000,000 700,000 8,000 rising after being on a 24,000 600,000 7,000 1,500,000 6,000 downward trend 500,000 18,000 5,000 400,000 1,000,000 4,000 12,000 300,000 3,000 200,000 500,000 6,000 2,000 100,000 1,000 0 0 0 0 Feb-20 May-20 Aug-18 Nov-16 Feb-14 May-15 Feb-20 May-20 Aug-18 Nov-16 Feb-14 May-15 Daily change (RHS) Number of confirmed cases Daily change (RHS) Number of confirmed cases

Source: CEIC, HSBC Source: CEIC, HSBC

Chart 9: Philippines Chart 10: Singapore

Confirmed cases Philippines Daily change Confirmed cases Singapore Daily change Daily new cases in the 1,600,000 18,000 70,000 1,600 Philippines remain elevated; 1,400,000 16,000 60,000 1,400 new cases in Singapore 14,000 1,200,000 50,000 1,200 remain contained 12,000 1,000,000 1,000 10,000 40,000 800,000 800 8,000 30,000 600,000 6,000 600 20,000 400,000 4,000 400 200,000 2,000 10,000 200 0 0 0 0 Feb-20 May-20 Aug-18 Nov-16 Feb-14 May-15 Feb-20 May-20 Aug-18 Nov-16 Feb-14 May-15 Daily change (RHS) Number of confirmed cases Daily change (RHS) Number of confirmed cases

Source: CEIC, HSBC Source: CEIC, HSBC

Chart 11: Thailand Chart 12: Vietnam

Confirmed cases Vietnam Daily change Thailand’s daily new cases Confirmed cases Thailand Daily change 350,000 12,000 25,000 1,200 are on an upward trend; 300,000 Vietnam’s new cases have 10,000 20,000 1,000 risen to historic highs 250,000 8,000 800 200,000 15,000 6,000 600 150,000 10,000 4,000 100,000 400 50,000 2,000 5,000 200 0 0 0 0 Feb-20 Jun-20 Oct-20 Feb-20 Jun-20 Feb-20 Jun-20 Oct-20 Feb-20 Jun-20 Daily change (RHS) Number of confirmed cases Daily change (RHS) Number of confirmed cases

Source: CEIC, HSBC Source: CEIC, HSBC

4 Free to View ● Economics - Asia 9 July 2021

COVID-19 in Asia

Taiwan’s daily new cases Chart 13: Mainland China Chart 14: Taiwan have moderated significantly after a recent wave Confirmed cases Mainland China Daily change Confirmed cases Taiwan Daily change 120,000 18,000 18,000 1000

100,000 15,000 15,000 800 80,000 12,000 12,000 600 60,000 9,000 9,000 400 40,000 6,000 6,000 20,000 3,000 3,000 200 0 0 0 0 Feb-20 May-20 Aug-20 Nov-20 Feb-21 May-21 Jan 20 Apr 20 Jul 20 Oct 20 Jan 21 Apr 21 Daily change (RHS) No of confirmed cases Daily change (RHS) No of confirmed cases

Source: CEIC, HSBC Source: CEIC, HSBC

Chart 15: India Chart 16: Sri Lanka

Confirmed cases India Daily change Confirmed cases Sri Lanka Daily change India’s daily new cases 36,000,000 480,000 300,000 4,000 continue to decline, but 32,000,000 420,000 250,000 3,500 remain elevated; Sri Lanka’s 28,000,000 360,000 3,000 200,000 new cases are on a 24,000,000 300,000 2,500 20,000,000 downtrend trend 240,000 150,000 2,000 16,000,000 12,000,000 180,000 100,000 1,500 8,000,000 120,000 1,000 50,000 4,000,000 60,000 500 0 0 0 0 Feb-20May-20 Aug-20 Nov-20 Feb-21May-21 Feb-20 May-20 Aug-20 Nov-20 Feb-21 May-21 Daily change (RHS) No of confirmed cases Daily change (RHS) No of confirmed cases

Source: CEIC, HSBC Source: CEIC, HSBC

Chart 17: Japan Chart 18: South Korea

Japan sees a recent rise in Confirmed cases Japan Daily change Confirmed cases South Korea Daily change 1,000,000 10,000 180,000 1,400 daily new cases; Korea’s new 160,000 1,200 cases appear to climb back 800,000 8,000 140,000 1,000 to similar levels back in May 120,000 600,000 6,000 100,000 800 80,000 400,000 4,000 600 60,000 400 200,000 2,000 40,000 20,000 200 0 0 0 0 Feb-20 May-20 Aug-20 Nov-20 Feb-21 May-21 Feb-20 May-20 Aug-20 Nov-20 Feb-21 May-21 Daily change (RHS) No of confirmed cases Daily change (RHS) No of confirmed cases

Source: CEIC, HSBC Source: CEIC, HSBC

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Free to View ● Economics - Asia 9 July 2021

Vaccine Data and Timelines

Chart 19: Potential vaccine coverage by population (confirmed doses + doses under negotiation)

389% % of population Potential vaccine coverage is 400% enough to achieve “herd immunity” for most Asian 350% 311% economies 300% 250% 200% 172% 154% 150% 144% 150% 112% 100% 98% 79% 100% 71% 64% 63% 61% 50% 24% 0% NZ AU SK MA HK JN VN SG SL PH TH ID TA IN* BA Potential vaccine coverage

Note: IN* – Does not include domestic production. Source: Duke University Health Innovation Center, HSBC

Chart 20: Share of confirmed vaccine dose purchases vs doses still under negotiations

A large portion of Vietnam’s India total vaccine commitment Indonesia has not yet been finalised Japan and is still under negotiation Vietnam Australia China* Philippines South Korea Malaysia Taiwan Thailand New Zealand Hong Kong % - 10 20 30 40 50 60 70 80 90 100 Confirmed dose purchases Dose purchases still under negotiation

Note: China* – Mainland China. Source: Duke University Health Innovation Center, HSBC

Chart 21: Vaccination timelines to reach “herd immunity” (analyst estimates)

Most economies in Asia VN started vaccinations in 1Q21 TH TA SL KR SI PH MA JN ID IN HK CH* NZ AU Nov-20 Feb-21 May-21 Sep-21 Dec-21 Mar-22 Jul-22 Oct-22 Jan-23 Vaccination timeline to reach herd immunity**

Note: *CH – Mainland China. **”Herd immunity” assumes 70% of the population is inoculated. Source: HSBC estimates

6 Free to View ● Economics - Asia 9 July 2021

ASEAN COVID-19 Trends

Chart 22: Daily new COVID-19 cases

Daily new COVID-19 cases in New cases ASEAN are at new record 60,000 highs, given the surge in 50,000 Indonesia 40,000

30,000

20,000

10,000

0 Aug-20 Sep-11 Oct-03 Oct-25 Nov-16 Dec-08 Dec-30 Jan-21 Feb-12 Mar-06 Mar-28 Apr-19 May-11 Jun-02 Jun-24 Indonesia Malaysia Philippines Singapore Thailand Vietnam

Source: CEIC, HSBC

Chart 23: Oxford Stringency Index time series

Index Index Government stringency 100 100 measures remain largely in place across ASEAN 80 80

60 60

40 40

20 20

0 0 01-Jan 01-Mar 01-May 01-Jul 01-Sep 01-Nov 01-Jan 01-Mar 01-May 01-Jul Indonesia Malaysia Philippines Singapore Thailand Vietnam

Source: CEIC, HSBC

Chart 24: Number of new fatalities per day

Daily fatalities in ASEAN are No of new deaths also at new record highs 1,000 900 800 700 600 500 400 300 200 100 0 Mar-31 May-12 Jun-23 Aug-04 Sep-15 Oct-27 Dec-08 Jan-19 Mar-02 Apr-13 May-25 Jul-06 Indonesia Malaysia Philippines Singapore Thailand Vietnam

Source: CEIC, HSBC

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Free to View ● Economics - Asia 9 July 2021

Economic Indicators

Chart 25: Ground traffic trends in capital cities

Ground traffic in Kuala Lumpur and Jakarta has 10 declined sharply, given the 0 recent surge in cases -10 -20 -30 -40 -50 -60 -70 Kuala Jakarta New Delhi Bangkok Taipei Tokyo Singapore Hong Kong Manila Lumpur Change in % from peak traffic hrs in 2019

Source: TomTom, HSBC

Chart 26: Air traffic trends across Asia

Air traffic has remained broadly stable across Asia No of flights tracked 500 from the previous month, 450 except in Bangkok and 400 Jakarta 350 300 250 200 150 100 50 0 Colombo Bangkok Kuala Hanoi Taiwan Manila Singapore Hong Seoul Jakarta London Delhi Tokyo Beijing New York Lumpur Kong Latest 1m ago

Source: Flight Tracker, HSBC

Chart 27: Oxford Stringency Index

Government stringency Index measures have relatively 90 relaxed in Mainland China 80 and Singapore but remain broadly unchanged in other 70 economies 60

50

40

30 SL IN MA VN PH HK ID CH* SG TH JN SK Latest 1 m ago

Note: *CH – Mainland China. Source: CEIC, HSBC

8 Free to View ● Economics - Asia 9 July 2021

Economic Indicators

Chart 28: Average non-residential mobility (recent vs one month ago)

MA TA VN AU SL PH TH JN SI ID IN NZ US HK KR 30 18 20 2 10 1 0 -10 -3 -20 -15 -10 -17 -17 -11 -30 -22 -18 -28 -25 -40 -39 -32 -50 -60 -70

2-Jul 1 month ago

Note: Comparison to Google baseline. The baseline is the median value, for the corresponding day of the week, during the five-week period of 3 January 2020-6 February 2020. Source: CEIC, HSBC

Chart 29: Mobility data: Average non-residential COVID-19 tracker Average Non-residential mobility

Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Asia AU NZ JN HK IN ID KR MA PH SI SL TA TH VN Elsewhere US UK Key (Amount of time spent in each location vs baseline levels) Low High

Note: Comparison to Google baseline. The baseline is the median value, for the corresponding day of the week, during the five-week period of 3 January 2020-6 February 2020. Source: CEIC, HSBC

9 Free to View ● Economics - Asia 9 July 2021

Disclosure appendix

Analyst Certification The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Yun Liu and Frederic Neumann Important disclosures This document has been prepared and is being distributed by the Research Department of HSBC and is not for publication to other persons, whether through the press or by other means. 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