Why is the Coronavirus Such a Threat?


Posted by Ed 11 days ago
AsiaXPAT (Hong Kong) -  An article published on the Daily Telegraph provides rationalle for the extreme measures that governments are taking to address the coronavirus threat.
Leading financial journalist Ambrose Evans-Pritchard also analyses the dire global implications related to the spread of the corona virus in this article. 
Here are some excerpts:  
The Virus Threatens to Collapse the Global Supply Chain
The workshop of the world is closed. China is on a total-war footing. The Communist Party has evoked the ‘spirit of 1937’ and mobilized all the instruments of its totalitarian surveillance system to fight both the Coronavirus, and the truth. Make GDP forecasts if you dare.

As of this week two-thirds of the Chinese economy remains shut. Over 80pc of its manufacturing industry is closed, rising to 90pc for exporters.

The Chinese economy is 17pc of the world economy and deeply-integrated into international supply chains. It was just 4.5pc of world GDP during the SARS epidemic 2003, which some like to use as a reassuring template. You cannot shut down China for long these days without shutting down the world.

The scale of disruption in China is already staggering. Hyundai, Number Five in global car sales, has been forced to close all its factories at home in Korea for lack of key components.
Volkswagen, Toyota, General Motors, and Tesla have all downed tools at their Chinese plants, as has Apple’s iPhone supplier Foxconn.
Global Supply Chain Risks
In his seminal paper, Trade-Off, David Korowicz, explains the fragility of our Just-In-Time global supply chain and the contagion risks should factories stop production for even a few weeks. 
To summarize, companies keep limited stocks of parts and products so if the supply chain is interrupted (by war or pandemic) the shelves go empty and it would be very difficultnand probably impossible to restart the system.

If the Virus Spreads Outside of China It Overwhelms Medical Facilities, and Spreads Even Faster
“It’s very, very transmissible, and it almost certainly is going to be a pandemic,” said Anthony Fauci, head of the US National Institute of Allergy and Infectious Disease.

It is the same warning from an “increasingly alarmed” Peter Piot, head of the London School of Hygiene and Tropical Medicine.

The danger is that it will become endemic and circulate everywhere like flu, a manageable headwind for rich countries with good health care but a Sword of Damocles having over Africa or South Asia.
Medical experts quoted in this New York Times article indicate that the problem with the coronavirus is that it can spread before a person exhibits symptoms.  By the time they become sick, they may have already passed it on to multiple people.
Obviously we have a very dangerous situation on our hands. Measures to try to stop the spread of this virus risk toppling the global economy. But not introducing draconian measures likely means the virus spreads out of control and we get a similar outcome.
Also see the SCMP for ‘Striking’ coronavirus mutations found within one family cluster, Chinese scientists say 

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Ed 10 days ago
Bloomberg is reporting that 61 of the passengers out of 273 on a cruise ship have tested positive for the coronavirus.
It would appear that his virus is extremely virulent and spreads rapidly, and easily.
The danger is that it will become endemic and circulate everywhere like flu, a manageable headwind for rich countries with good health care but a Sword of Damocles having over Africa or South Asia. 

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Ed 7 days ago
UPDATE:   60 More Test Positive on Cruise Ship
Japanese press are reporting another 60 infections on one cruise ship bringing the total from that single ship to 130.   This would indicate that this coronavirus is highly contagious.
Meanwhile, in China, there are concerns about opening factories and putting thousands of workers into spaces similar to what's happened on the cruise ships.   If one person is asymptomatic and reports for work, the virus could spread and infect hundreds of workers in a factory.    
This puts the Chinese government in a very difficult position.   If they do not reopen the factories, then the supply chain will be starved of parts and products.  This would soon result in shelves going bare around the world.   If they reopen prematurely, and the virus infects significant numbers of workers, the factory will not be able to operate. 
Read more on this story on Bloomberg

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Ed 6 days ago
This from a friend commenting on this article  Plague Pushes China To Breaking Point

'A friend's family is in Wuhan, they are all at home 4/5 people in the family are sick, just the kid is not sick and they believe one family member is on a deathbed (45-year-old male) the rest just have bad flu symptoms. These people are definitely not in the official statistics and are undocumented cases so I imagine the numbers are much much higher.'


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Ed 6 days ago
This SCMP article confirms that there are likely many thousands of infected people in Wuhan and other cities in China who are unable to obtain medical treatment or testing for the coronavirus because the hospitals and clinics are jam-packed. 
The head of the CCP party in Wuhan Ma Guoqiang admitted nearly 1500 people exhibiting severe flu-like symptoms had to wait days to get admitted to a hospital.
A great many infected people exhibit only mild symptoms of the virus so might not bother to seek medical treatment or quarantine themselves, so they are likely to be passing on the virus to others. 

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Ed 5 days ago
UPDATE : Is the Worst of the Coronavirus Over?  SCMP
My Take:
1. The SARS virus did not run its course for 6 months and it was never a China-wide epidemic. 
2.  Real numbers are not being reported because a) it's China and b) more people are probably not going to the hospital than are, because the hospitals are full.
3.  The infections are cumulative and increase exponentially and one person generally infects multiple other people (see 130 infections on a cruise ship - see the entire family infected at the hot pot meal)   
China is reporting roughly 43,000 infections as of Tuesday and 4000 recovered. If the hospitals were already overwhelmed a few weeks ago, and only 4000 have recovered, then surely that means that ever more people are not being admitted or diagnosed. And those people will be spreading the virus.
4.  Wuhan built a new hospital in 10 days that can hold 'up to 1000 patients'  One might call that a drop in a bucket in terms of addressing the true scale of the problem (or a cynic might refer to it as a PR exercise).  Many thousands of infected people will continue to be turned away because there is no space in any of the hospitals. 
5.  Further compounding this problem is the fact that as of mid January, over 500 medical workers in Wuhan were infected by the coronavirus, leaving hospitals short-staffed. Authorities were told not to report this infection rate then, so one has to wonder how many more doctors and nurses are infected now and unable to report to work.  Fewer medical staff surely would result in fewer reported infections as even more sick people would need to be turned away.
Conclusion:  the hospitals are full so fewer people are being diagnosed, resulting in lower infection counts.   No, unfortunately the worst is unlikely to be over.
This is an interesting headline on the SCMP.  Shouldn't it be 'does' 
I suppose the algos that run the stock market are triggered by the past tense and the computer programs are triggered to buy on that signal. 
Vaccine for the Coronavirus Imminent?
On a related note, I have seen multiple headlines indicating that miraculously, various labs from Australia to Hong Kong to America have developed a vaccine for this virus in just the few weeks since it was discovered. 
Let's put that to rest by listening to Professor John Nicholls of HKU Faculty of Medicine
The NY Times also has a story on this indicating a vaccine is likely years away and that costs are so prohibitive that labs are reluctant to develop a vaccine for the coronavirus when they know the infection will have burned out by the time the vaccine is ready. 

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Ed 5 days ago
The Guardian is running this story:
Unlike SARS, which eventually fizzled out, the chances that COVID 19 will do the same are slim,  stated David Heymann, a professor of infectious disease epidemiology at the London School of Hygiene and Tropical Medicine.
He commented that even with the extreme containment measures put in place in China, it looks like the virus is already well-established.
'My view is pessimistic' said Heyman.

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Ed 5 days ago
China's Fatal Dilemma 
This blog post by Charles Hugh Smith suggests that keeping the quarantine in place long enough to halt the spread of COVID 19 would collapse the Chinese economy, and that the authorities there have decided to falsely state that the virus has peaked and is receding, and that China is slowly re-opening for business. 

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Ed 5 days ago
The Wall St Journal is reporting on people being turned away from hospitals in Wuhan:

Coughing badly, Zhu Chunxia sat on a sidewalk in the rain on Monday, awaiting transport to a facility where her apartment complex’s residential committee said she could be treated for the new coronavirus sweeping through this central Chinese city.

The ride never came. Though her doctor was almost certain she was infected with the virus, a throat-swab test she had taken came back negative, which meant the facility wouldn’t take her.

"They said we didn’t qualify," said the 36-year-old mother of two girls. "They wanted positive results."

And meanwhile, scientists at Imperial College in London estimate that approximately 1 million people might be infected in Wuhan, a city of 11 million.

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Ed 5 days ago
Feedback from a friend who owns a trading company:
AX - what’s happening at the factories you deal with in China? Are they re-opened yet?

Trader - Not good up there.

My partner’s factory in Dongguan has 20% of its staff in so its slow going.

Many of the factory workers in the south and middle parts of China provinces come from the northern part of China. And because of the migration issue, many factories (for the time being) won’t be getting their workers back for weeks to come, if not months.
Otherwise, anyone wanting to migrate from one province to another will have to be quarantined. no one wants that...

So...challenging times indeed. Our deliveries are delayed…3-4 weeks. This is what happens when the global markets rely/depend on one country to produce its goods. I sincerely hope the world wakes up!!

Its brutal here…SARS 2.0. A lot of businesses will go belly-up…particularly those riding on thin profit/loss margins.


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Ed 4 days ago
UPDATE - Nearly 15,000 new infections (and 242 deaths) reported in a single day, 10x the number from the previous day 'because there were not enough test kits available to test all those reporting sick'  See SCMP
This takes the total infections to 60,000+ 
What about the many thousands who have been turned away from hospitals altogether?  Are they being counted?    I very much doubt it. 
Tens if not hundreds of thousands of sick, virus-infected people are spreading what appears to be a highly contagious disease far and wide in Hubei and China. 

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Ed 4 days ago
The SCMP is reporting that school closures in HK will be extended indefinitely, and that public sector workers will continue to work from home for at least another week to prevent the spread of the coronavirus.
Meanwhile, factories in China, where there are at least 60,000 infections being reported (and more than likely hundreds of thousands), are opening their doors and welcoming back millions of workers.

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Ed 4 days ago
Cut Off from the World ---  Eight Days in Wuhan --- a press team explains what the situation is like on the ground in Wuhan since it all access in and out of the city was cut off just prior to Chinese New Year 

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Ed 3 days ago
JP Morgan is tracking coal consumption in China to try to determine if the country is 'getting back to business' and opening factories.

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Ed 2 days ago
Coal Consumption: 
Property Sales:

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Ed 1 day ago
DEVELOPING : Fiat Chrysler Assembly Plant Halts Production - Unable to Source Components from China
Bloomberg is reporting that  Fiat Chrysler is the first automaker in Europe to idle its assembly lines due to the impact of the coronavirus.  Their Serbian production line was suspended due to inability to source electronics parts including sound systems from its China suppliers.
Earlier the Bangkok Post reported that the biggest car factory in the world in Korea had also halted all production due to the inability to source a range of components from factories in China. 
It is not known when these components will be available to these automakers as much of China remains in lockdown due to the COVID 19 virus.

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