Markets tank as COVID-19 is ‘very close’ to pandemic

corona econ

SupChina illustration by Derek Zheng

The number of confirmed cases of COVID-19 outside of China has “tripled over the past week” — from 10,000 to more than 30,000 — the Wall Street Journal reports (paywall). Michael Ryan, executive director of the World Health Organization’s health emergencies program, said today that the epidemic is “very close” to a pandemic.

However, only a handful of countries “have signs of sustained community transmission,” Tedros Adhanom Ghebreyesus, the head of WHO, added in a press conference, per CNBC. “Roughly 93% of the global cases are concentrated in four countries: China, Korea, Italy and Iran, they said. Roughly 80 countries have less than 100 cases each.” Click here for the latest numbers.

“It was Wall Street’s worst day in more than a decade: Stocks plunged on Monday as a panic that began in the oil market made its way through the global financial system,” the New York Times reports. “The S&P 500, already down 12 percent from its late February high, fell more than 7 percent,” and the Dow fell 2,000 points. Though most of the decline was driven by a “price war for crude” between Saudi Arabia and Russia that drove oil prices down 20%, there are also substantial “fears that the coronavirus will disrupt global supply chains and tip the economy into a recession,” per CNBC.

What happens next?

One country with sustained community transmission is the U.S., though judging by President Trump’s Twitter feed this morning, the official line is to deny the seriousness of the epidemic. Secretary of State Mike Pompeo is also deflecting blame: Per Reuters, he claimed that imperfect information from China “has led us now to a place where much of the challenge we face today has put us behind the curve.” Pompeo has also insisted multiple times on calling the novel coronavirus the “Wuhan virus,” contrary to WHO guidelines.

Italy has embraced China-style quarantine action, putting its entire population of 60 million under lockdown, the Financial Times reports (paywall). Italians have been “instructed to limit leaving their houses unless for urgent health or work reasons,” and all public gatherings have been banned until April 3. The country is the worst-hit in Europe, with nearly 10,000 infections and over 450 deaths.

Should other countries follow suit?

That is the subject of these recent articles:

  • Wealthy countries must “act more decisively,” the international medical journal The Lancet said in an editorial. The “evidence suggests that the colossal public health efforts of the Chinese Government have saved thousands of lives,” and wealthy countries must “abandon their fears of the negative short-term public and economic consequences that may follow from restricting public freedoms as part of more assertive infection control measures.” If they do not, countries with weaker health systems will face greater risks.
  • “China’s blunt force strategy poses deeper questions for other countries,” writes Amy Qin in the New York Times. “Its campaign has come at great cost to people’s livelihoods and personal liberties. Even countries that could copy China still have to ask whether the cure is worse than the disease.”

Meanwhile, official COVID-19 cases fall in China

To be taken with a huge grain of salt, especially after Caixin confirmed that asymptomatic — but still contagious! — COVID-19 patients are not being counted in official numbers in many provinces:

  • “Mainland China reported no new locally transmitted coronavirus cases outside the epicenter of Hubei Province for the second day running on Monday,” per Reuters.
  • Even Hubei Province, excluding Wuhan, “has reported [on March 6] no new cases of coronavirus over 24 hours for the first time in the outbreak,” also per Reuters.

More COVID-19 news from China:

Wuhan residents objected to a staged visit to a locked-down estate by Vice-Premier Sūn Chūnlán 孙春兰, the SCMP reports. “It’s all fake!” some residents yelled from their windows, claiming that “the management company responsible for the estate had quickly cleaned up before she came and arranged for fake volunteers to deliver groceries to its locked-down households.”

Internet users objected to an exhortation by Wáng Zhōnglín 王忠林, the top official in Wuhan, for the city’s residents to “thank the General Secretary [Xi Jinping], thank the Chinese Communist Party, heed the Party, walk with the Party, and create strong positive energy.” The China Media Project writes that the remarks “generated fury online, and were viewed by many Chinese as tasteless and disgusting.”

“Chinese authorities are scrambling to tighten controls at airports and other points of entry,” the SCMP says, as “nearly all” of the newly confirmed cases outside Wuhan are “from abroad, mostly the coronavirus hotspots of Iran, Italy and South Korea.”

“More than two dozen people have been rescued from the rubble of a multi-story building reportedly converted into a coronavirus quarantine center, after it collapsed in the southeastern Chinese province of Fujian on Saturday,” the SCMP reports. Ten people were later confirmed to have died in the collapse, and a government team is investigating whether renovations to the building caused the tragedy. One source told Caixin that the owner of the building, Xinjia Hotel in Quanzhou, had “built mezzanines that were too heavy for the structure to bear.” Caixin has a photo gallery of the rubble and rescue efforts.

—Lucas Niewenhuis