Worry grew on Tuesday that the extent of economic disruption from China’s coronavirus outbreak was being underestimated as the death toll in the world’s second-largest economy from the epidemic soared past 1,000.
Companies struggled to get back to work after an extended Lunar New Year holiday while hundreds of Chinese firms said they would need billions of dollars in loans to stay afloat. Layoffs also began despite assurances by President Xi Jinping that widespread sackings would be avoided.
“The coronavirus outbreak completely changed the dynamics of the Chinese economy,” JPMorgan analysts said in a note to clients as they again downgraded forecasts for Chinese growth this quarter.
Another 108 coronavirus deaths were reported on Tuesday, a daily record, bringing the total number of people killed in the country to 1,016, the National Health Commission said.
There were 2,478 new confirmed cases on the mainland as of Monday, down from 3,062 on the previous day, bringing the total to 42,638.
It was the second time in the past two weeks that authorities recorded a daily drop in new cases, offering a hint of hope the virus was peaking. But the World Health Organization (WHO) warned the spread of cases outside of China could be “the spark that becomes a bigger fire”.
A WHO team has arrived in China to investigate the outbreak.
Only 319 cases have been confirmed in 24 other countries and territories outside mainland China, according to WHO and Chinese health officials, with two deaths, one in Hong Kong and the other in the Philippines.
More than 300 Chinese companies are seeking bank loans totaling at least 57.4 billion yuan ($8.2 billion) to help cope with the disruption caused by locked down cities, closed factories and crippled supply lines, two banking sources said.
Chinese firm Xinchao Media said on Monday it had laid off 500 people, or just over 10% of its workforce, and restaurant chain Xibei said it was worried about how to pay the wages of its roughly 20,000 workers.
Authorities said they would roll out measures to stabilize jobs, in addition to previously announced cuts to interest rates and fiscal stimulus designed to minimize any downturn.
Asian share markets followed Wall Street higher on Tuesday even as China’s factories struggled to re-open and analysts warned investors might be underestimating how economically damaging the challenge was likely to be. [MKTS/GLOB]
Analysts at Nomura said measures of returning workers and passenger traffic flows within China suggested the virus had “a devastating impact on China’s economy in January and February”.
“We are concerned that global markets thus far appear to be significantly underestimating the extent of disruption,” they wrote in a note.
One Chinese government think-tank forecast the virus would wipe one percentage point off annual economic expansion and analysts fear a prolonged disruption could have negative consequences for global growth..
China’s Hubei province, the epicenter of the outbreak, reported 2,097 new cases and 103 new deaths on Feb. 10, its health authority said.
The flu-like virus emerged from a wildlife market in the Hubei provincial capital of Wuhan in December.
CRUISE SHIP BLOCKED
Public anger over the handling of the outbreak has been rising and Hubei’s government dismissed the provincial health commission’s Communist Party boss, Zhang Jin, and director Liu Yingzi, state media reported.
Hubei remains in virtual lockdown, with its train stations and airports shut and roads blocked.Slideshow (3 Images)
One Beijing government official said it would be harder to curb the spread of the virus as people return to work. “The capacity of communities and flow of people will greatly increase the difficulty,” he said.
About 160 million people are expected to return to their homes across China over the next week following the end of the holiday, a transport official said.
The virus has caused chaos in Asia with many flights suspended, businesses disrupted and entry restrictions imposed by governments trying to ward off the spread.
It has also roiled the world of luxury cruises.
The Diamond Princess cruise ship with 3,700 passengers and crew remained quarantined in the Japanese port of Yokohama, with 65 more cases detected, taking the number of confirmed cases from the Carnival Corp-owned (CCL.N) vessel to 135.
Thailand said it had barred passengers from disembarking another Carnival Corp ship, Holland America Line’s MS Westerdam, the latest country to turn the vessel away due to coronavirus fears although no confirmed infections have been found on board.
It has already been turned away by Japan and the Philippines.
“Now we are back in limbo,” passenger Stephen Hansen told Reuters via email.