The American Chamber of Commerce in Shanghai (AmCham Shanghai)

4 March 2020

Coronavirus Health Update

China’s National Health Commission reported 125 new cases of COVID-19 in China yesterday (March 2), most of them in Hubei province (there were 11 new cases confirmed outside the province). The aggregate number of confirmed cases in China has risen to 80,026.

Yesterday there was one new case reported in Shanghai (a Heilongjiang Province native living in the Pudong New Area).

The graphs below show the trend for the number of daily new cases in China (graph 1) and the aggregate number of confirmed cases versus suspected cases (graph 2).

According to the South China Morning Post, the laboratory at the Shanghai Public Health Clinical Centre was shut down on January 12, one day after its researchers published the world’s first genome sequence of COVID-19 on open platforms. The release of the data has helped researchers develop test kits for the virus. According to a source, no specific reason was given for the shutdown; it was ordered to close for “rectification.”

The institute had reported its discovery on January 5 to the National Health Commission, recommending “relevant prevention and control measures” be taken in public places. It then made its findings public on January 11 after it saw that the authorities had taken no obvious action to warn the public. Repeated submissions by the institute asking permission to reopen have gone unanswered.

Reuters reports that Xi Jinping has announced China will establish a series of national clinical research centers to help contain the outbreak and develop a vaccine.

In another sign that China may be bringing the epidemic under control, Wuhan has closed the first of its 16 specially built hospitals meant to handle the influx of coronavirus patients.

The New Yorker has an interesting graphic strip on how Chinese millennials are finding solace in the kitchen during the time of coronavirus.

Policy Update

Jiangsu Released Implementation Rules for its 50 Supportive Policies: The Jiangsu provincial government has released three sets of implementation rules and service procedures for the 50 policies it issued in mid-February regarding “promoting economic stability and sustainable development” to help companies weather the epidemic. The municipal government classified the 50 policies into different categories by industry scope and has assigned various government agencies and departments to support each batch of implementation rules. The Jiangsu government will continue to release more implementation rules batch by batch.

For more information, read about each set of procedures below:
• 1st batch on utility costs and major projects
• 2nd batch on tax reduction and financial subsidies
• 3rd batch on labor and employment and industrial and transportation support

Guangdong Strengthens Quarantines for Inbound Travelers from Epidemic-Stricken Countries: The Nanfang Daily reported Tuesday that Guangdong province, one of China’s manufacturing hubs, will require all travelers arriving from countries and areas with severe COVID-19 outbreaks to quarantine themselves and be medically observed for 14 days, either at home or in a designated hotel. The report did not specify which passengers would be allowed to spend their quarantine at home versus in a designated hotel.

This follows a notice from the Nanjing municipal government last Saturday, which announced that airport passengers, even those without flu symptoms, arriving from countries with severe COVID-19 outbreaks must nevertheless be quarantined for 14 days at a designated hotel for observation. In Nanjing, passengers must pay for their own accommodation costs, according to the Nanjing Foreign Affairs Office. The Nanfang Daily report can be found here.

Economic Impact

Electronics Shipments Suffer: Shipments of smartphones, headphones and computers are weak as manufacturers struggle to find parts in the wake of the coronavirus, writes the Financial Times. Best Buy and Dell are among those companies impacted, say industry observers.

Apple Exposure: With its heavy reliance on China as a manufacturing and assembly base, Apple is among those companies most exposed to coronavirus-induced supply chain disruption. Yet as the WSJ argues, the company has few other options than to stick with China given the dearth of large-scale manufacturing expertise elsewhere.

Not So Bleak: Nobel Laureate Michael Spence offers an optimistic view of the impact of the coronavirus, suggesting that the financial costs will be transitory, even if the human costs won’t pass. Read here at Project Syndicate. Less optimistic are many of those interviewed by the New York Times, as the coronavirus begins to drag on Western economies.

Charting the Coronavirus: Capital Economics has updated its charts, and among the most interesting are those recording cinema ticket sales and containers waiting to be offloaded in Chinese ports. Film producers will be weeping.

Advice for Finance Chiefs: The Conference Board has collected the wisdom of finance chiefs to produce a summary of how they should manage the coronavirus’s impact.

What’s the Long Term Impact? ChinaFile rounded up insights from three China experts on the long term political and diplomatic effects of the virus, including how China’s administration is perceived by other world superpowers and whether it can continue to be a regional political leader.

Other Economy

BRI to Nowhere: “Plans originally called for a seaport, roads, railways, pipelines, dozens of factories and the largest airport in Pakistan. But, almost seven years after the China-Pakistan Economic Corridor was established, there’s little evidence of that vision being realized,” writes Bloomberg, as yet another BRI project appears to have stalled.

Other Reading

China Leadership Monitor: Another issue of arguably the most substantive and thoughtful China-focused journal is available. In one article, Victor Shih argues that as China’s “government continues to place a heavy priority on financial stability and the funding of key government objectives, developing liquid and transparent markets have taken a back seat,” and that foreign participation in China’s financial markets will “stagnate.”