Taiwan Races to Avert Lockdown, Save Covid Success Story
(Bloomberg) -- Taiwan is facing hundreds of untraceable infections after a year of being one of the biggest success stories of Covid-19 containment, raising the prospect that the pathogen has been spreading undetected through the community for months.
While officials have now limited social gatherings and urged people to work from home, the measures fall short of the strict restrictions that regional neighbors like Singapore are imposing for smaller flareups. The authorities are hesitant to put in place stronger restrictions out of concern they will sacrifice the economy’s strongest growth in years, especially at a time when governments and companies around the world are clamoring for access to supplies of Taiwan’s semiconductors.
President Tsai Ing-wen’s administration remained widely popular at home and garnered no small amount of international acclaim for its handling of the outbreak and would be reluctant to lose that reputation with a full-on lockdown.
The government reported a record 206 new local cases Sunday. This came after 180 new cases on Saturday, prompting authorities put the capital Taipei and the surrounding New Taipei City into a soft lockdown, limiting the sizes of indoor and outdoor gatherings and shutting most recreational facilities and businesses.
Hospitals are cutting down outpatient services and will bar medical tourism to preserve resources. A full lockdown could be imposed if local infections average 100 or more for 14 days, with an unclear source for at least half of those, according to the Centers for Disease Control.
The new surge in cases has so far been mainly confined to the greater Taipei area and has not affected the operations of Taiwan’s major technology companies, such as Taiwan Semiconductor Manufacturing Co., as most of their operations are located further south.
The benchmark Taiwan Stock Index fell 1.1% as of 9:30 a.m. Monday while the Taiwan Dollar weakened 0.15%. The benchmark Taiwan Stock Index tumbled 8.4% last week on concern about the impact on growth, while the Taiwan dollar fell 0.4% against the greenback.
With a population of 23.5 million, Taiwan has reported 1,682 cases and only 12 deaths from Covid-19 and at one point went for more than 200 days without a local infection. But the current outbreak -- linked to a hotel used to quarantine airline pilots -- has been gathering pace.
On Saturday, family and social gatherings in Taipei were limited to five people indoors and 10 outside. Bars, nightclubs and karaoke parlors were shut and religious services in temples, churches and mosques across the island were suspended.
The weekend saw popular tourist sites all but deserted, with long queues at supermarkets in Taipei, center of the outbreak, as people stocked up on food and other essentials.
The social-distancing curbs could help curb the outbreak, much as fast action after its first case in January this year helped Taiwan quickly end a cluster infection related to a hospital within just four weeks.
But persistent restrictions may hurt retail spending and potentially the broader economy. Because Taiwan remained open, and is the main source for in-demand high-performance semiconductors, exports have been surging. Shipments rose 38.7% in April from a year earlier, the second-highest total following a record in March.
“We all need to protect Taiwan in the following year to maintain steady economic growth, after we successfully contained Covid-19 over the past year,” Taiwan President Tsai Ing-wen said last week.
The outbreak is likely to have a short-term impact on consumption, cabinet spokesperson Lo Ping-cheng said in a text message after top economic and financial officials met with Premier Su Tseng-chang Sunday morning. But the government still expects growth to meet its 4.6% full-year target, as long as infections can be controlled soon and planned additional consumption stimulus has the desired effect.
“The real impact of covid curbs on Taiwan’s economy will be small because Taiwan is exports-dependent,” the fund association’s Chang said. “Only a few industries will be impacted, such as domestic consumption, dining and tourism, while most industries will be unaffected.”
The current outbreak puts a spotlight on the government’s vaccination program. While Taiwan has consistently ranked among the top five places in terms of its handling of the pandemic according to Bloomberg’s Covid Resilience Ranking, it has been comparatively slow to acquire shots.
So far, only 315,000 doses of AstraZeneca’s Covid-19 vaccine have been delivered to Taiwan. The past week saw a rush of people trying to book shots, leading authorities to announce that inoculations are only available to higher-risk or front-line people.
Taiwan’s envoy to the U.S. on Friday said she trying to ensure that Moderna shots arrive in June, while Tsai has said a locally developed vaccine should be available in late July.
©2021 Bloomberg L.P.