- JoNova - https://www.joannenova.com.au -

China — only 20% of the economy working — the cost of inviting a virus to dinner

It’s too expensive to close borders, they say, but who can afford to import this virus?

Should we stop holidays and conferences, or most of the economy?

The monthly PMI figures show that in February about four fifths of China’s economy was shut down. Locking people in apartments and hospitals being not very productive. Strangely, all the economists watching the mainstream news and official Chinese figures did not expect this. They were shocked when the monthly PMI result was announced. The drop from 50 to 35 was more than twice as bad as the economists expected.

China PMI horror show to trigger Q1 downgrades

Umesh Desai, Asia Times

China’s Purchasing Managers’ Index in February plunged to 35.7 from 50 in January. This is the lowest reading since January 2005 when it was first released and even lower than November 2008’s figure of 38.8 during the Global Financial Crisis.

The market had expected a reading of around 46, according to a Reuters poll and this shocking data had analysts recalibrating their numbers.

The ANZ economists said this implied the utilization of only a fifth of the country’s full economic capacity, much lower than the high numbers claimed by authorities.

Chinese pollution February 2020, Coronavirus. Economic Activity.

Satellites show nitrogen dioxide emission over China: NASA

Junk journalists copied junk news from China and they all fooled the economists

China purchasing indexes sink to record lows as coronavirus epidemic hits economy

Rachel Koning Beals, MarketWatch, Feb 29

The February result came in far below the median forecast of 43 by economists surveyed by the Wall Street Journal.

Saturday’s results show a “relatively large impact” from the epidemic, Zhao Qinghe, an analyst with the statistics bureau, said in a statement accompanying the data release, according to the Wall Street Journal. March’s readings should improve because of authorities’ efforts to help companies, especially manufacturing firms, resume production, he said.

“The situation on the ground [in China] is materially worse than what has come out in the media,” Leland Miller, CEO of the China Beige Book, a research firm that collects Chinese company viewpoints, told MarketWatch in an interview.

Meanwhile as Chinese submarines map out the underwater routes Australian subs use David Archibald points out what a strategic disaster China’s silence and lies over Coronavirus have been. One benefit of coronavirus may be President Xi’s foreign policy.

David Archibald: Give the Corona-virus the Nobel Peace Prize

American Thinker

Xi wants to be emperor of the whole world and can see a path to achieving that.  But he has kicked a couple of own goals…

Xi’s first own goal was to suppress privately owned business activity in favor of state-owned companies. Workers in state-owned companies have about a third of the productivity of those in businesses run by their private owners….

His [President Xi’s]  second own goal was to delay the news of the coronavirus until after the trade deal was signed with the United States.  Xi did not want to show any sign of weakness while the deal was being negotiated.  China’s relative position had been deteriorating since 2015, when its share of world exports peaked at about 15%.  Trump wanted a trade deal because he would like China to remain stable through the election cycle.  The language of the trade deal included a lot of “China shall,” indicating that China needed the deal more than Trump did.  We infer that the anti-China efforts will be ramped up again after the election.

The first coronavirus case was reported on December 1, 2019, and the trade deal was signed on January 15, 2020.  Wuhan was put under quarantine lockdown eight days later on January 23.  In the meantime, some five million people left Wuhan, as estimated by Wuhan’s mayor, a case of closing the stable door after the horse had bolted.  So, as a result of waiting for the trade deal to be signed before acting, Xi changed a controllable outbreak into an out-of-control epidemic.

The Chicoms are pathological liars, as they regard anyone who is not in a more powerful position in the Chinese Communist Party with contempt, thus they reported daily deaths as a percentage of cases as 2.1%, 2.1%, 2.1% until they gave up lying about it.  But the hit to China’s economy is real and huge.  Coal consumption is half of what it should be at this point after the end of the lunar new year holidays.  Air pollution, as measured by satellites, is down 20% to 50%.

China’s ability to threaten its neighbors will be much weakened as its government revenues crater.  There is a good case for nominating the coronavirus for the Nobel Peace Prize.  The humble virus has certainly done far more for world peace than Greta Thunberg, the current frontrunner.

The PLA can’t attack anyone until there is a vaccine for the coronavirus.  It’s been reported that the PLA pulled out of Wuhan after 3,000 of its troops became sick.  Collecting dead bodies is now on a bounty system, similar to how bodies were collected in Europe during the plague.

Another beautiful outcome from the coronavirus is that it should, in a rational world, eliminate China from the world’s supply chains.  It might be good for a couple of million jobs in the United States alone.

 

Reuters, meanwhile, are reporting that things are picking up in China

Apparently Chinese official data shows there are more lights and more people driving around and we all know the Chinese government would never make that sort of thing up.

More traffic, night lights show China’s factories restart as new virus cases drop

BEIJING/SINGAPORE (Reuters) – Nearly 300 million people have gone back to work in China since the Lunar New Year break as more companies restart business and coronavirus travel restrictions ease, although many small firms are still struggling to find enough workers to run plants.

 Coal consumption is making a slight recovery.

Chinese coal consumption data

Chinese coal consumption data

We hope things are improving for the people, if not for President Xi.

For lots of reasons it will probably not be this catastrophic for our economy. But nor would stopping the flights.

Corona-virus-china-electricity

Source: Chinese State Grid Corp. (Buyer beware).

On the news tonight various officials told us that now “we can no longer stop the virus coming into the country”. It was some kind of self-soothing abject nonsense to calm themselves down. What they meant to say was that we can no longer stop the virus running amok inside our country (because we didn’t stop flights from Iran a week ago).

Obviously we could still block flights tomorrow and stop the virus coming in. And given that we may run out of hospital beds in weeks, it still seems sensible to stop potential virus-shedding people from romping through our cafes and shops. The main aim now, surely, is to delay the peak til after winter. Adding random virus generators doesn’t seem like a good way to reduce the use of ICU beds, even though there will come a point where there will be so much virus in Australia that bringing in a few more won’t matter. But when a single superspreading tourist can double the national toll, we’re not there yet.

Right now, there may be people who live in Indonesia, Africa, or anywhere, noticing that people are getting sick all around them. While the Australian government is waiting for the WHO to tell them what to do,  these same potential carriers are thinking of boarding a plane to come to Australia. (Same for the US and UK, NZ and Canada obviously).

The mayor said that’s exactly what five million in Wuhan did. Left before the lockdown.

Preparing is quite good advice,
With lentils, beans, nuts and rice,
But if COVID should spread,
Best take to your bed,
And hope that your stocks will suffice.

–Ruairi

9.5 out of 10 based on 64 ratings