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| China’s Coronavirus Has Revived Global Economic Fears | China’s Coronavirus Has Revived Global Economic Fears |
| (2 months later) | |
| Before a mysterious respiratory illness emerged in the center of China, spreading with lethal effect through the world’s most populous nation, concerns about the health of the global economy had been easing, replaced by a measure of optimism. | Before a mysterious respiratory illness emerged in the center of China, spreading with lethal effect through the world’s most populous nation, concerns about the health of the global economy had been easing, replaced by a measure of optimism. |
| The United States and China had achieved a tenuous pause in a trade war that had damaged both sides. The specter of open hostilities between the United States and Iran had reverted to stalemate. Though Europe remained stagnant, Germany — the Continent’s largest economy — had escaped the threat of recession. | The United States and China had achieved a tenuous pause in a trade war that had damaged both sides. The specter of open hostilities between the United States and Iran had reverted to stalemate. Though Europe remained stagnant, Germany — the Continent’s largest economy — had escaped the threat of recession. |
| Now, the world is worrying anew. | Now, the world is worrying anew. |
| An outbreak originating in China and reaching beyond its borders has summoned fresh fears, sending markets into a wealth-destroying tailspin. It has provoked alarm that the world economy may be in for another shock, offsetting the benefits of the trade truce and the geopolitical easing, and providing new reason for businesses and households to hunker down. | An outbreak originating in China and reaching beyond its borders has summoned fresh fears, sending markets into a wealth-destroying tailspin. It has provoked alarm that the world economy may be in for another shock, offsetting the benefits of the trade truce and the geopolitical easing, and providing new reason for businesses and households to hunker down. |
| On Monday, investors dumped stocks on exchanges from Asia to Europe to North America. They entrusted their money to traditional safe havens, pushing up the value of the yen, the dollar and gold. They pushed down the price of oil over fears that weaker economies would spell less demand for fuel. | On Monday, investors dumped stocks on exchanges from Asia to Europe to North America. They entrusted their money to traditional safe havens, pushing up the value of the yen, the dollar and gold. They pushed down the price of oil over fears that weaker economies would spell less demand for fuel. |
| In short, those in control of money took note of a growing crisis in a country of 1.4 billion people, whose consumers and businesses are a primary engine of economic growth around the world, and they chose to reduce their exposure to risk. | In short, those in control of money took note of a growing crisis in a country of 1.4 billion people, whose consumers and businesses are a primary engine of economic growth around the world, and they chose to reduce their exposure to risk. |
| By late Monday, the virus had killed more than 100 people in China. More than 4,500 had been infected — mostly in mainland China, but also in Hong Kong, Japan, Macau, Malaysia, Nepal, Singapore, South Korea, Taiwan, Thailand and Vietnam, and as far away as Australia, Canada and the United States. | By late Monday, the virus had killed more than 100 people in China. More than 4,500 had been infected — mostly in mainland China, but also in Hong Kong, Japan, Macau, Malaysia, Nepal, Singapore, South Korea, Taiwan, Thailand and Vietnam, and as far away as Australia, Canada and the United States. |
| The emergence of the virus in China, whose government jails journalists and tightly controls information, left the world uncomfortably short of facts needed to assess the dangers. | The emergence of the virus in China, whose government jails journalists and tightly controls information, left the world uncomfortably short of facts needed to assess the dangers. |
| “It’s the uncertainty of how the global economy is going to respond to the outbreak,” said Philip Shaw, chief economist at Investec, a specialist bank in London. That will depend on the severity, the spread and the duration of the outbreak, he said, and “we don’t really know the answers to any of these questions.” | “It’s the uncertainty of how the global economy is going to respond to the outbreak,” said Philip Shaw, chief economist at Investec, a specialist bank in London. That will depend on the severity, the spread and the duration of the outbreak, he said, and “we don’t really know the answers to any of these questions.” |
| What was left to the imagination resonated as a reason for investors to unload anything less than a sure thing. | What was left to the imagination resonated as a reason for investors to unload anything less than a sure thing. |
| Stocks in Japan and Europe fell more than 2 percent. In New York, the S&P 500 was down 1.6 percent, with stocks of companies whose sales are dependent on China especially susceptible. Wynn Resorts, which operates casinos in the gambling haven of Macau, a special administrative region of China, dropped more than 8 percent. | Stocks in Japan and Europe fell more than 2 percent. In New York, the S&P 500 was down 1.6 percent, with stocks of companies whose sales are dependent on China especially susceptible. Wynn Resorts, which operates casinos in the gambling haven of Macau, a special administrative region of China, dropped more than 8 percent. |
| The virus and its attendant unknowns conjured memories of another deadly illness that began in China, the 2002-3 outbreak of severe acute respiratory syndrome, or SARS, which killed nearly 800 people. | The virus and its attendant unknowns conjured memories of another deadly illness that began in China, the 2002-3 outbreak of severe acute respiratory syndrome, or SARS, which killed nearly 800 people. |
| “In many ways, it looks similar,” said Nicholas R. Lardy, a China expert and senior fellow at the Peterson Institute for International Economics in Washington. “We are seeing fast increases in the number of cases. The hospitals are overwhelmed and are not even able to test people with symptoms. I’m expecting the cases to go way, way up.” | “In many ways, it looks similar,” said Nicholas R. Lardy, a China expert and senior fellow at the Peterson Institute for International Economics in Washington. “We are seeing fast increases in the number of cases. The hospitals are overwhelmed and are not even able to test people with symptoms. I’m expecting the cases to go way, way up.” |
| In the end, SARS significantly slowed the Chinese economy, dropping the annual growth rate to 9.1 percent in the second quarter of 2003 from 11.1 percent in the previous quarter, according to Oxford Economics, an independent research institute in London. | In the end, SARS significantly slowed the Chinese economy, dropping the annual growth rate to 9.1 percent in the second quarter of 2003 from 11.1 percent in the previous quarter, according to Oxford Economics, an independent research institute in London. |
| The episode is coinciding with the Lunar New Year, a major holiday in which hundreds of millions of Chinese journey to their hometowns to visit relatives. | The episode is coinciding with the Lunar New Year, a major holiday in which hundreds of millions of Chinese journey to their hometowns to visit relatives. |
| With air, rail and road links in central China restricted as the government seeks to block the spread of the virus, hotels, restaurants and other tourism-related businesses are likely to suffer. | With air, rail and road links in central China restricted as the government seeks to block the spread of the virus, hotels, restaurants and other tourism-related businesses are likely to suffer. |
| Some economists assume that those effects will quickly dissipate, leading to a revival in the consumer economy within months. That is how events played out in 2003. | Some economists assume that those effects will quickly dissipate, leading to a revival in the consumer economy within months. That is how events played out in 2003. |
| “Our baseline is that it will be a fairly big impact but relatively short-lived,” said Louis Kuijs, the Hong Kong-based head of Asia economics at Oxford Economics. | “Our baseline is that it will be a fairly big impact but relatively short-lived,” said Louis Kuijs, the Hong Kong-based head of Asia economics at Oxford Economics. |
| In the hopeful view, economic damage will be contained by the Chinese government’s aggressive response in effectively quarantining the outbreak’s center — Wuhan, a city of 11 million people, and much of the surrounding area in Hubei Province. | In the hopeful view, economic damage will be contained by the Chinese government’s aggressive response in effectively quarantining the outbreak’s center — Wuhan, a city of 11 million people, and much of the surrounding area in Hubei Province. |
| But Wuhan is a hub of industry, sometimes called the Chicago of China, intensifying the quarantine’s implications for the national economy. | But Wuhan is a hub of industry, sometimes called the Chicago of China, intensifying the quarantine’s implications for the national economy. |
| “This is really unprecedented,” Mr. Lardy said. “The economic effects may be much larger than SARS. Wuhan is a major industrial city, and if you’re basically shutting it down, it’s going to have a major effect.” | “This is really unprecedented,” Mr. Lardy said. “The economic effects may be much larger than SARS. Wuhan is a major industrial city, and if you’re basically shutting it down, it’s going to have a major effect.” |
| Already, China’s government has extended the Lunar New Year holiday by three days, through Feb. 2, ensuring that migrant workers will not return to their factory jobs as soon as anticipated, almost certainly disrupting production. Suzhou, a major industrial city near Shanghai, has extended the holiday until at least Feb. 8. | Already, China’s government has extended the Lunar New Year holiday by three days, through Feb. 2, ensuring that migrant workers will not return to their factory jobs as soon as anticipated, almost certainly disrupting production. Suzhou, a major industrial city near Shanghai, has extended the holiday until at least Feb. 8. |
| Given that China’s economy is the source of roughly one-third of world economic growth, the slowdown could be felt widely. | Given that China’s economy is the source of roughly one-third of world economic growth, the slowdown could be felt widely. |
| Most directly, China’s neighbors would absorb the effects, especially those dependent on tourists from China — among them Hong Kong, the Philippines, Singapore, Thailand and Vietnam. Over the weekend, China announced that it was barring overseas group tours by its citizens. | Most directly, China’s neighbors would absorb the effects, especially those dependent on tourists from China — among them Hong Kong, the Philippines, Singapore, Thailand and Vietnam. Over the weekend, China announced that it was barring overseas group tours by its citizens. |
| Updated May 28, 2020 | |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | |
| More than 40 million people — the equivalent of 1 in 4 U.S. workers — have filed for unemployment benefits since the pandemic took hold. One in five who were working in February reported losing a job or being furloughed in March or the beginning of April, data from a Federal Reserve survey released on May 14 showed, and that pain was highly concentrated among low earners. Fully 39 percent of former workers living in a household earning $40,000 or less lost work, compared with 13 percent in those making more than $100,000, a Fed official said. | |
| There is an uptick in people reporting symptoms of chilblains, which are painful red or purple lesions that typically appear in the winter on fingers or toes. The lesions are emerging as yet another symptom of infection with the new coronavirus. Chilblains are caused by inflammation in small blood vessels in reaction to cold or damp conditions, but they are usually common in the coldest winter months. Federal health officials do not include toe lesions in the list of coronavirus symptoms, but some dermatologists are pushing for a change, saying so-called Covid toe should be sufficient grounds for testing. | |
| Yes, but make sure you keep six feet of distance between you and people who don’t live in your home. Even if you just hang out in a park, rather than go for a jog or a walk, getting some fresh air, and hopefully sunshine, is a good idea. | |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | |
| Charity Navigator, which evaluates charities using a numbers-based system, has a running list of nonprofits working in communities affected by the outbreak. You can give blood through the American Red Cross, and World Central Kitchen has stepped in to distribute meals in major cities. | |
| If China’s factories are hobbled by additional restrictions on transportation that limit factory production, that could become a global event. It could hit iron ore mines in Australia and India that feed raw materials into China’s smelters. It could limit sales of computer chips and glass panel displays made at plants in Malaysia and South Korea. | If China’s factories are hobbled by additional restrictions on transportation that limit factory production, that could become a global event. It could hit iron ore mines in Australia and India that feed raw materials into China’s smelters. It could limit sales of computer chips and glass panel displays made at plants in Malaysia and South Korea. |
| It could trim sales of factory machinery produced in Germany and auto parts made in the Czech Republic, Hungary and Poland. It could even affect the purchases of additional American farm goods that China agreed to under the trade deal signed this month. | It could trim sales of factory machinery produced in Germany and auto parts made in the Czech Republic, Hungary and Poland. It could even affect the purchases of additional American farm goods that China agreed to under the trade deal signed this month. |
| The shock is hitting just as China contends with its slowest pace of economic growth in decades, reviving fears that its reduced appetite for the goods and services of the world could jeopardize jobs on multiple shores. | The shock is hitting just as China contends with its slowest pace of economic growth in decades, reviving fears that its reduced appetite for the goods and services of the world could jeopardize jobs on multiple shores. |
| “China is obviously slowing down in a structural way,” said Silvia Dall’Angelo, senior economist at Hermes Investment Management in London. “The global economy is clearly more shaky, with sluggish growth. It is clearly more vulnerable to shocks.” | “China is obviously slowing down in a structural way,” said Silvia Dall’Angelo, senior economist at Hermes Investment Management in London. “The global economy is clearly more shaky, with sluggish growth. It is clearly more vulnerable to shocks.” |
| The SARS outbreak prompted the government to stimulate the Chinese economy by directing surges of credit that financed huge infrastructure projects. But whatever damage China confronts this time, its willingness to respond will be limited by the government’s concerns about mounting public debt. | The SARS outbreak prompted the government to stimulate the Chinese economy by directing surges of credit that financed huge infrastructure projects. But whatever damage China confronts this time, its willingness to respond will be limited by the government’s concerns about mounting public debt. |
| “They are much more constrained now,” said Mr. Lardy, the China expert. “I think people underestimate the conviction that the top leadership has, that they really want to reduce financial risk.” | “They are much more constrained now,” said Mr. Lardy, the China expert. “I think people underestimate the conviction that the top leadership has, that they really want to reduce financial risk.” |
| But as global investors try to gauge the outlook, one element is the same as ever in China: Information is scarce. Trust in the authorities is minimal. | But as global investors try to gauge the outlook, one element is the same as ever in China: Information is scarce. Trust in the authorities is minimal. |
| During the SARS outbreak, the government was slow to acknowledge the existence of the virus as local officials actively covered up cases, allowing the threat to multiply. | During the SARS outbreak, the government was slow to acknowledge the existence of the virus as local officials actively covered up cases, allowing the threat to multiply. |
| This time, the government has sought to project the sense that it is forthrightly reckoning with the crisis. President Xi Jinping has publicly acknowledged the threat, while warning local officials not to hide reports of trouble. | This time, the government has sought to project the sense that it is forthrightly reckoning with the crisis. President Xi Jinping has publicly acknowledged the threat, while warning local officials not to hide reports of trouble. |
| But in the current moment of agitation, any perceived lack of information tends to weigh in as bad news. | But in the current moment of agitation, any perceived lack of information tends to weigh in as bad news. |
| “This is, of course, still a government system where transparency is not really held up as an important criterion,” Mr. Kuijs of Oxford Economics said. “This is still an overall system in which discretionary decisions by bureaucrats are driving everything instead of very clear rules.” | “This is, of course, still a government system where transparency is not really held up as an important criterion,” Mr. Kuijs of Oxford Economics said. “This is still an overall system in which discretionary decisions by bureaucrats are driving everything instead of very clear rules.” |
| Clifford Krauss and Matt Phillips contributed reporting. | Clifford Krauss and Matt Phillips contributed reporting. |