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Coronavirus. How bad are things going to get?

FILE - In this Feb. 4, 2020, file photo, a worker walks among beds in a convention center that has been converted into a temporary hospital in Wuhan in central China's Hubei Province.

PortandTerminal.com, February 5, 2020

Just how bad are things going to get before the world turns the corner on the coronavirus?

BEIJING, CHINA – Each day there are reports of new cases of the coronavirus being detected, more deaths reported, border closures, transportation cancellations and interruptions to global trade. All of which begs an important question.

Just how bad are things going to get before the world turns the corner on the coronavirus?

China’s response is helping

Empty urban highways in China
Wuhan and other cities in China have been put on a complete lock-down.

The good news is that China has moved quickly to contain the outbreak. Live animal markets throughout the country have been suspended. Wuhan and other cities have been put on lock-down. Trains and flights out of the city have been cancelled and most private cars have been banned. Long-distance bus services have been suspended from Wuhan and a handful of other provinces and municipalities, including Beijing, and public gatherings have been restricted. 

“It takes draconian public health measures to stop a virus like this from spreading, and China is in a position to take such measures. If they cannot control the virus there, it is going to be very hard to control it if it does start to spread elsewhere.”

Jimmy Whitworth, London School of Hygiene and Tropical Medicine, London, UK

READ: How do you feed 50 million people held in quarantine?

These measures seem to be helping to contain the virus in China. As of today, there have been 24,607 cases of the coronavirus reported, of which 99% are located in mainland China. There have been only 216 confirmed cases as of February 5th outside of China.

Map of China showing the incidence of coronavirus cases by region
Source: https://gisanddata.maps.arcgis.com/, February 5, 2020

Other countries are closing borders and implementing travel restrictions on people who have visited China in the past 14 days. While this is controversial, it will also help minimize the virus’ spread.

Yesterday, in addition to reporting its first death from the virus, thousands of hospital staff in Hong Kong joined an escalating strike aimed at pressuring the government into sealing the border with mainland China to limit its spread. Other countries will follow suit and implement similar measures as the number of cases and fear grows.

Infections in China

Map of China showing the incidence of coronavirus cases by region
The province of Hubei shown in yellow, which Hunan is the capital of has 16,678 cases reported as of February 5, 2020. Experts say that in Hunan alone, 75,000 people may have been infected

Time lags, delays, and problems in reporting may mean that the scale of the deadly new coronavirus outbreak is far worse than current official figures make out.

According to a new study in the journal The Lancet, over 75,000 people may have been infected with coronavirus in the city of Wuhan alone. Wuhan is the capital of Hunan province shown in yellow in the map above. There are many other cities in China on lockdown with the virus – these are shown in red in the map above. If Wuhan alone has 75,000 infections, how many tens of thousands more are there in the rest of the country? 100,000 in total? More?

The study’s findings also suggest that each infected person could spread the virus to two or three individuals on average, resulting in an epidemic that doubles in size every 6.4 days. Another study published Jan. 29 in the New England Journal of Medicine (NEJM) came up with a similar finding suggesting that each infected person has been spreading the virus to an average of 2.2 people

So if there are almost 25,000 reported cases of coronavirus as of today, February 5th, then there could predictably be 50,000 cases in 6.4 days, February 12th, and possibly a great nmany more.

What will happen when there are 50,000 + cases of coronavirus?

Employee wearing a surgical mask at an empty Apple store in China
Companies including Apple, Alphabet’s (GOOGL.O) Google and Deere (DE.N) have all temporarily closed facilities in China.

On its current path, thanks to measures that have been taken, it seems likely that the coronavirus will be contained mostly to mainland China. The impact of it though will be felt globally.

As the number of cases reaches 50,000 or greater, the Chinese government will have to implement further extraordinary measures to contain it. Expanded quarantines, forced business closures and so on.

Pilot wearing a hazmat suit as seen through the window of a white cargo plane
Pilot dons protective suit as he lands plane in coronavirus-hit region of China

All of that is going badly hurt international trade hard. China has evolved into a principal element of the global economy. International companies that rely on Chinese factories to make their products and depend on Chinese consumers for sales are already warning of costly problems.

Yesterday Hyundai announced that it would suspend production in South Korea because the coronavirus outbreak has disrupted the supply of parts.

Around 500 employees of a company in Thailand’s western province of Kanchanaburi were abruptly notified by the management on Friday that they are being laid off, due to a shortage of raw materials normally imported from China.

Expect to hear more of the same type of closures and production slowdowns as factories start to run out of Chinese made parts.

The energy market is feeling the pinch already as well. Bloomberg reported two days ago that Chinese oil demand has dropped by about 3 million barrels a day, or 20% of total consumption, as the coronavirus squeezes the economy.

READ: China Oil Demand Has Plunged 20% Because of the Virus Lockdown

And in shipping, both Maersk and CMA CGM announced that they were being forced to blank Asian/European sailings due to “deterioration on the Asia / North Europe trade caused by the Coronavirus“. Other carriers will soon follow suit.

READ: Maersk, CMA CGM blank sailings as coronavirus cuts demand

And on and on the list goes and grows. All of this comes at a time when there are less than 25,000 reported cases of the coronavirus. So when the number grows to 50,000 cases of the virus in or around February 12th next week, it seems reasonable to expect a snowballing of the bad economic news as well.

When China sneezes in today’s world we all get sick one way or the other.

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