Newly Confirmed Coronavirus Cases in China’s Hubei Province Rise Sharply

Date: Thursday, February 13, 2020
Source: The Wall Street Journal

Beijing leaders offer tax relief and other measures to keep jobs filled and ensure necessities are available

China reported nearly 10 times as many newly confirmed coronavirus cases Wednesday as Tuesday, after a new diagnosis classification was adopted, raising concerns that the scale of the outbreak has been much larger than Chinese data had suggested.

Newly confirmed cases in Hubei province, of which Wuhan is the capital, jumped to 14,840 Wednesday from 1,638 a day earlier, official figures showed Thursday. Meanwhile 242 new deaths were reported in Hubei.

The provincial health commission has started to count clinically diagnosed cases—not just those with a positive laboratory test—as confirmed, contributing to the jump. This is consistent with how other provinces are classifying patients, the commission said.

Of Wednesday’s new cases, 13,332 were clinically diagnosed.

The jump came a day after China’s National Health Commission said officials are starting to see positive changes in control of the disease.

Doubts have proliferated among Wuhan residents over the accuracy of the swab testing kits that authorities have been using to diagnose cases. Some doctors and epidemiologists have called for hospitals to use chest scans in diagnosing the new virus.

Test kits have also raised concerns in the U.S. Some of the labs validating the Centers for Disease Control and Prevention test got inconclusive results when running it themselves, the CDC said Wednesday. Those results were part of a test run, meaning not with actual patient samples.

The likely culprit is a reagent—a compound used to cause a chemical reaction—that isn’t behaving consistently, health authorities said. The CDC is working to remanufacture the reagent and send it back out.

This could result in delays in running diagnostics. Local and state health authorities were eager to access the tests themselves, to avoid the wait involved in sending samples through the CDC.

The U.S. on Wednesday confirmed its 14th coronavirus case, a female passenger on the second evacuation flight from Wuhan into Miramar Marine Corps Air Station in San Diego. She is the second person to test positive from the air base, where evacuees from Hubei province are waiting through a federally mandated 14-day quarantine. CDC officials said there was no evidence of person-to-person spread there.

In China on Wednesday, top leaders offered tax relief and other measures in a bid to stabilize an economy reeling from the outbreak, as businesses and factories have been slow to reopen after the extended Lunar New Year holiday and many workers at staying home.

The Politburo Standing Committee, the Communist Party’s top body, stressed in a meeting Wednesday the importance of keeping people employed and strengthening policies to support small and medium companies, according to state broadcaster China Central Television. Separately, China’s State Council, or cabinet, said it would offer rent and tax relief as part of an emergency plan to help small and private companies resume operations.

“We must make every effort to ensure the supplies for outbreak response and daily necessities to maintain economic progress and people’s life,” said Chinese Premier Li Keqiang.

Businesses remained closed and streets were quiet across China’s largest cities Wednesday. In Beijing, subways that are typically jam-packed during peak travel times were mostly empty, and shopping malls were silent. The gatekeeper of one residential compound in downtown Beijing estimated that roughly 70% of the people living there have returned to the city following the holiday. Yet they appeared to be holing up: Dozens of parcels and grocery delivery orders were set out by the gate of the compound by delivery drivers. Some city parks and supermarkets, however, appeared to have an uptick in visitors.

The cabinet on Wednesday also called on officials to provide machinery and raw materials to businesses, especially manufacturers of medical products based outside Hubei province, which is at the center of the crisis. It promised to avoid mass layoffs and roll out more measures to ensure normal functioning in society and the economy. The standing committee, which is led by President Xi Jinping and includes other top leaders, said state-owned enterprises would resume production.

Whether China is able to return the economy to normal and limit the economic fallout from the virus has broad ramifications for the global economy. China accounts for almost a fifth of global gross domestic product when adjusted for incomes—more than the U.S.’s 15% by the same measure. The outbreak has already disrupted world-wide supply chains and forced businesses to make hard decisions with limited information.

On Wednesday, the GSMA canceled the Mobile World Congress in Barcelona after many companies—including Facebook Inc., Amazon.com Inc. and Sony Corp. —withdrew due to concerns about the coronavirus outbreak.

It is unclear how serious the economic damage will be from the coronavirus outbreak. But it risks hindering the government’s important political goal of doubling income levels and the size of the economy from where they stood in 2010, while lifting living standards for a remaining five million people still considered severely impoverished.

There are some signs that pessimism is growing. Feng Chucheng, an analyst with Plenum, a research firm, told clients in a note Monday that the continued disruption to the work environment in China could drive down first-quarter GDP growth to 2% or even into negative territory.

“Most firms in the service sector will have to wait for at least another week, and most property projects will be on halt for at least 10 more days,” Mr. Feng wrote.

Wall Street economists, too, expect the virus to slam the Chinese economy in the first quarter and weigh on the rest of the world, including the U.S. But they say the impact on global growth will be mild and fully recouped once the sickness is fully contained.

Economists at Goldman Sachs Group Inc., for instance, expect first-quarter global growth to be hit by 2 percentage points on an annualized basis. They expect U.S. growth could slow as much as half a percentage point in the first quarter but fully recover by the end of the third quarter. Economists at JPMorgan Chase & Co. recently slashed their estimate for first-quarter global growth in half to a 1.3% annualized rate but also predicted a strong rebound later in the year.

China’s economic moves come a day after the central government in Beijing replaced two provincial health officials in Hubei province with a trusted official from China’s national health agency.

As of end Wednesday, the death toll from the outbreak was at more than 1,300 people, along with more than 59,000 confirmed cases in mainland China, most of them in Hubei.

Also on Wednesday, Chinese aviation officials urged other countries, many of which are banning flights from China and restricting travelers from the country, to ease their regulations. The restrictions have hurt the international aviation market and inconvenienced travelers, said Liang Nan, an international affairs official at China’s Civil Aviation Administration, according to the official Xinhua News Agency.

The World Health Organization has said that widespread travel bans aren’t necessary to halt the virus’s spread.

Total cargo and passenger turnover dropped 4.9% and 5.3%, respectively, in January compared with the year before, data from the agency showed Wednesday.

China has imported 2.84 billion yuan, or about $400 million, worth of products to help contain the virus, including masks and protective suits, from Jan. 24 to Feb. 11, China’s customs agency said Wednesday. With hospitals in Hubei overwhelmed and in need of supplies, Beijing has exempted donated materials from tariffs and taxes and cut some tariffs on some U.S. goods.

The coronavirus also led to the disruption of the largest sporting event yet, as organizers of the Formula One Chinese Grand Prix decided to postpone the prestigious motor-racing event that was set for April 19 in Shanghai. Since 2004, the race has routinely drawn crowds of more than 140,000 people.

The past month has already seen postponements of Olympic basketball qualifying games, international tennis matches, the world indoor athletics championships, and matches in China’s domestic soccer league. The longer-term threat remains for this summer’s Olympics in Tokyo, though the organizing committee has insisted that the Games would proceed as scheduled.

 

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