Stocks plummet as COVID-19 spreads across Asia and Europe

The China Project illustration by Derek Zheng

“It was an ugly day on Wall Street,” reports CNBC. “The Dow closed down more than 1,000 points, its worst day since February 2018. The other major indexes all closed down more than 3% each.”

Until this weekend, investors had shrugged off the threat of the COVID-19 epidemic. A week ago, no countries other than China and Japan — where a single cruise ship became a hotbed for hundreds of COVID-19 cases — had more than 100 infections.

But fears of a pandemic animated the markets today. Though about 97 percent of the total 79,571 reported infections are in mainland China, the numbers outside China are growing rapidly. Besides that cruise ship where over 600 were infected and three have died, South Korea has now reported over 800 infections, Italy has 230, Japan has 159, and over 50 cases and 12 deaths were reported in Iran. See also Hong Kong stocks tumble as virus cases spiral outside China, in Nikkei Asian Review (porous paywall).

Is it a pandemic?

Reuters reports on comments from the head of the World Health Organization:

“The key message that should give all countries hope, courage and confidence is that this virus can be contained, indeed there are many countries that have done exactly that,” WHO Director-General Tedros Adhanom Ghebreyesus told a news conference in Geneva.

“Using the word ‘pandemic’ now does not fit the facts but may certainly cause fear,” he added as the number of cases continued to mount internationally and financial markets spun lower…

Tedros said a sudden increase of cases in Italy, Iran and South Korea were “deeply concerning” but for now authorities were not seeing an uncontained global spread of the virus or witnessing widespread serious cases or deaths…

“Does this virus have pandemic potential? Absolutely, it has,” Tedros said. “Are we there yet? From our assessment, not yet.”

See also:

• Is the coronavirus outbreak a pandemic yet? / NYT (porous paywall)
• A vaccine won’t stop the new coronavirus / Atlantic
• Will warming weather kill off Covid-19? Scientists aren’t sure / Caixin

A “considerable impact on the Chinese economy”

Chinese President Xí Jìnpíng 习近平 admitted yesterday, per the SCMP, that the COVID-19 epidemic would have a “considerable impact of the Chinese economy and society,” though he insisted that “the fundamentals of China’s long-term economic growth have not changed, and the impact of the epidemic is short term and overall controllable.” Cóng Liàng 丛亮, the general secretary of the National Development and Reform Commission, loyally repeated the message that the epidemic’s impact will be “temporary and short-term,” and said that the government would meet all its economic and social development goals for 2020.

In comments via teleconference to “every county government and every military regiment throughout the country,” Xi described the epidemic as the “fastest spreading” and “most difficult to prevent and control” since 1949, when the People’s Republic of China was founded. For more on the high-profile comments by Xi, see China Daily: Xi sets out major tasks for officials.

For a more realistic look at the state of the Chinese economy right now, see a Wall Street Journal report that begins:

The Chinese economy’s quick return to normal will hinge largely on how migrant workers such as Zhang Hua choose between two bad options: Stay in their hometowns without jobs, or return to cities where they face a 14-day coronavirus quarantine before being allowed back to work…

China’s transport minister recently said fewer than one-third of the country’s 291 million migrant workers, or people from rural areas who work in cities, had returned to their jobs as of Feb. 14. He said another 120 million should return by the end of February, while the remaining 100 million would return in March.

Or read in Caixin: Production at China’s biggest steelmaker is down 8%. “Baowu, which disclosed the information at an industry conference on Feb. 22, expects to make 1 million tons less steel this quarter than it did in the same period last year.”

The annual meeting of the National People’s Congress has been officially postponed, Xinhua reports. It was originally scheduled to start on March 5, and will likely be rescheduled “to start during the 7-day period of March 24 to March 31,” according to the NPC Monitor.

Confusion in Wuhan and other updates

While the leaders and planners in Beijing try to project calm, citizens living in the epidemic epicenter in Wuhan are receiving mixed messages. The South China Morning Post reports that “just three hours after announcing that visitors trapped in Wuhan…could leave on Monday, authorities reversed the decision, saying it had been made without approval.” The city has also “introduced 14 days’ mandatory quarantine for recovered coronavirus patients, after some discharged patients again tested positive.”

While some other parts of China, including the provinces of Yunnan, Guangdong, Shanxi, and Guizhou, are lowering their lockdown levels in response to the epidemic per Reuters, others like Harbin, the capital of the northern province of Heilongjiang, are tightening measures.

Finally, a bit of good news: “China said it will ban the trade and consumption of wild animals…as part of efforts to curb virus outbreaks,” the SCMP reports. A subcommittee of the China Wildlife Conservation Association, which represented frog breeders and had voiced opposition to the ban, has croaked.

—Lucas Niewenhuis