Wuhan Mayor Offers To Resign As Coronavirus Death Toll Accelerates, Supply Shortages Intensify
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Wuhan Mayor Offers To Resign As Coronavirus Death Toll Accelerates, Supply Shortages Intensify

Investors who dismissed the threat to their P&Ls posed by China's coronavirus outbreak are suddenly realizing that they've made a grave miscalculation. What few Asian markets were open on Monday (most were closed for the LNY holiday) saw equities tank, and in the US, futures are pointing to a steep drop at the open - a sign that the market has found the excuse it needed to give back some of its torrid January gains.

With so much going on - the Bolton revelations, the deaths of Kobe Bryant and his daughter, the busiest week of earnings season, and the upcoming Fed meeting - the virus remains the most dominant theme - and with good reason.

As we reported late last night, the number of confirmed cases in China has tripled over the weekend. Health officials have confirmed 2,804 cases in China, where the deal toll has climbed to 80 - giving the virus a roughly 5% mortality rate. Over the weekend, we joked that the scapegoating was already beginning, citing a rash of public outrage directed at health officials and Wuhan, as well as the city's mayor, Zhou Xianwang.

In typically communist fashion, Zhou accepted responsibility for botching the initial response to the virus, and said he and the local party chief, Ma Guoqiang, would be willing to step down to quiet the public outrage. The government is scrambling to build not one, but two new hospitals in under two weeks to house coronavirus patients in Wuhan, yet doctors and nurses claim that they are still struggling with a shortage of supplies, even after local officials implored neighboring provinces to send assistance. Shortages of everything from beds to facemasks to personnel are still hurting the city's ability to treat new cases. That lockdown has obviously interfered with shipments of new supplies.

During a press conference on Sunday, Wang Xiaodong said in a press conference that the government was reinforcing medical supplies, but he triggered even more public anger as he Wang corrected himself twice about the number of face masks being made available in the province, initially putting the number at 10.8 billion, then changed it to 1.8 billion before correcting himself again to say that the real number was 1.8 million masks. Public anger was also directed at Wang because he neglected to wear a face mask during the presser, while Mayor Zhou appeared to wear his mask upside down. 

After appointing Premier Li Keqiang to head the party's committee to oversee the crisis response over the weekend, Li arrived in Wuhan on Monday, the SCMP reports. In a PR coup for the government, reporters followed Li as he visited patients and medical personnel fighting on the front lines of the outbreak and delivered some inspired speeches.

"You are trying every means to save lives," Li told medical staff at Jinyintan hospital, one of the designated institutions in Wuhan for treating infected patients. "When you are putting your efforts to save lives, you have to protect yourselves too."

Li will apparently remain on the ground in the province, where he will direct the effort to combat the virus's spread.

But the Chinese premier wasn't the only major figure to travel to Wuhan on Monday: The WHO director-general is traveling to the city to try and assess the situation on the ground.

Wuhan Mayor Zhou's announcement over the weekend that roughly 5 million people had already left Wuhan before the lockdown began made it seem like combating the virus's spread at this point would be virtually impossible. In Beijing on Monday, He Qinghua, the first-degree inspector of the Disease Prevention and Control Bureau, confirmed what many - including on CNBC reporter - suspected. In addition to the 11 million 'official' residents of Wuhan, the city is also host to millions of migrant workers from the countryside. Almost all of those workers have already returned home, threatening to spread the virus across China's impoverished rural areas where awareness of prevention strategies is minimal.

To fight this, China must mobilize a "grass roots" campaign of party officials.

"The awareness [of prevention and control] is relatively low in the countryside. We will need to fill the gap of this weak link," He said. "The most important thing now is mobilizing our cadres at the grass-roots level so we can do better in our prevention and control work at the community level."

Here's the latest roundup of cases, courtesy of the SCMP, which has consistently maintained the most accurate figures.

 

Even though researchers reportedly cast doubt on the virus's connection to the Wuhan food market illegally trading in wild animals, scientists on Monday said they had, in fact, found evidence of the virus at the market. A strain of the virus was isolated from samples taken at the market. The strain was isolated from environmental samples taken from the Huanan seafood market in Wuhan. A phot of the virus, known as 2019-nCoV, can be found below.

Per the SCMP, the virus was detected in 35 of the 585 environmental samples collected on Jan. 1 and Jan. 12, with 33 of the positive samples taken from the market’s western zone, where the wildlife trading business was concentrated.

Outside of the mainland, Taiwan reported its fifth case on Monday.

Several neighboring countries announced precautions to prevent the virus from crossing over from China: Mongolia has closed all educational institutions until at least March 2, and has closed its border with China to all pedestrian and vehicle crossings. Kazakhstan has suspended its 72-hour visa-free program for holders of Chinese passports. In Myanmar, the United Wa State Army, a political group for the Wa people, said it would shut down all entertainment in the autonomous territory, while imposing strict border checks on all outsiders. The group has also barred all large public gatherings and instructed the population to cease eating wild animals.

In Seoul, South Korean President Moon Jae-in said Monday that his administration was preparing a "complete enumeration" of people entering the country from Wuhan. And any travelers entering the country from China will need to fill out a 'health questionnaire'. Even Iran is taking precautions, prohibiting Chinese and people from Southeast Asia from bringing food into the country. Russian tour operators have stopped selling tours in China, and are only bringing Russian citizens back from the country.

According to Feng Luzhao, a researcher with the Chinese CDC, insisted that the most effective way to stop the spread of the disease would be to reduce travel.

"[We have decided] to extend the Lunar New Year holidays because [we want] to encourage people to stay home and avoid going to areas where infection may be prevalent and places with large crowds of people," Feng said. "[We believe] this can help curb the spread of the disease."

To try and stop the spread, China has ordered an 'extension' of the Lunar New Year Holiday, with several manufacturing hubs and other centers of industry deciding to stay closed into February.

Meanwhile, more health researchers in China are warning that the state is woefully undercounting the number of cases. A researcher at HKU med school announced that his new estimate for active cases in China is closer to 25,000.

Over in the US, a fifth case of coronavirus was confirmed in Arizona. With the trajectory of the virus confirming the worst fears of epidemiologists, we suspect this won't be the last case in the US.

Tyler Durden Mon, 01/27/2020 - 06:09
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