From clothes to condoms: Coronavirus is threatening global consumption in ways you never knew were possible

CAP

China’s status as the world’s manufacturing powerhouse means the coronavirus epidemic’s effects are being felt in some odd places. We’ve come to terms with no new iPhones, but weirder shortages could upend people’s daily lives.

Plummeting iPhone production and a lack of new cars rolling off the assembly line dominated early discussion of coronavirus-induced shortages. But the epidemic currently sweeping China and making determined inroads into over two dozen other countries has forced hundreds of factories to close, affecting dozens of industries. If nothing else, coronavirus has made the world realize that globalization has its downsides.

Panic buying

It’s not just the virus itself that’s causing shortages, of course – rumors about the virus can be equally as devastating. Hong Kong, which is heavily dependent on China for many staples, has seen store aisles stripped of necessities like toilet paper, rice, and pasta in recent weeks as panic-buying ramps up while some factories struggle to reopen. Mere rumors of a toilet paper shortage earlier this month were enough to send thousands of locals pouring into stores to denude the shelves, triggering a rebuke from the government to those people “with evil intentions” spreading falsehoods “leading to panic buying and even chaos.”

No food

At the same time the virus disrupts its exports, China is having a difficult time getting meat into the country, its own pork supply decimated by a recent outbreak of African swine fever. The US, Europe, and Brazil are still shipping meat to China, but the refrigerated containers have to be handled carefully, plugged in as soon as they’re unloaded to keep the meat cold and moved out quickly to make way for other containers.

CAP

Citywide quarantines have limited the supply of workers to move meat in Shanghai and Xingang, meaning much never makes it off the ship.

No clothes

If anyone was hoping to break the monotony of quarantine with a little gym time, they’re out of luck unless they already have the duds. Athletic-wear behemoth UnderArmour revealed that coronavirus-related delays were causing shortages of fabric, packaging and raw materials, potentially reducing first-quarter revenues by up to $60 million.

They’re far from the only clothing brand hit hard by the outbreak – London-based designer Xuzhi Chen lamented that his clothes are manufactured in Shanghai, and he doesn’t know when production will be back online. He’s not alone in his plight – plenty of western brands have clothes made in China.

CAP

At the same time, Chinese buyers have stayed home from fashion shows in Milan and London, hitting even those Italian, and British brands that do their manufacturing at home hard.

No sex?! 

Selling a niche product doesn’t guarantee safety from the ravages of virus-related factory closures, either. The owner of a chain of Russian sex shops revealed he was feeling the coronavirus squeeze in an interview with Gazeta, lamenting that many of the products he sells are either made in China or have major components sourced from China.

Condom shortages in Singapore and Hong Kong would at first seem to suggest that people are using their quarantine time to get hot and heavy, but photos circulating on social media indicate the prophylactics are flying off the shelves for other reasons – to cover for shortages of gloves and masks, to start. About a quarter of the world’s condoms are made in China.

No sports 

Even sports stars have had to deal with coronavirus-induced shortages, a problem they might have expected their celebrity to insulate them from. Bauer Hockey, which makes custom hockey sticks for elite customers including many NHL players, saw its factory in Tongxiang City in Zhejiang province shut down last month and delay reopening twice.

The issue has apparently caused ripples in the league, leading to players being restricted to a “one-stick limit for practice and maybe two for games.” A player might typically go through several sticks in a single game, so while the shortage is very much a “first world problem,” it has caused much consternation in the hockey world.

CAP

No business

Coronavirus’ economic impact is likely to be felt far into the future. A handful of major trade shows have either been put on hold or canceled altogether, most notably the Mobile World Congress, the world’s largest smartphone trade show. Scheduled for later this month in Barcelona, the conference – which typically hosts 100,000 attendees – has been completely called off. Smaller events for brands like Swatch and Cisco have also gotten the axe. Even gatherings still on the calendar, like this week’s Singapore Airshow, will see attendance severely curtailed as over 70 exhibitors have pulled out. Multi-million-dollar deals that might have been sealed at these temples of commerce will fall by the wayside or be postponed until the return of a favorable business climate – and no one knows quite when that will be.

The virus has disrupted next week’s Berlin Film Festival, with over 50 Chinese delegates and several other international execs pulling out because they couldn’t get travel visas. The festival is supposed to include three Chinese features and one short, which presumably will be screened anyway – even if their directors are stuck home in quarantine. But with China an ever larger international market for films, the absence of the executives will be felt.

No communion

And the virus has caused behaviors to change even where it hasn’t reached epidemic levels. People are thinking twice before having unnecessary contact with others, and redefining what contact might be “necessary.” Our Lady’s Acomb Church in York has pressed pause on its Communion ritual, which involves drinking wine out of a communal chalice, “until further notice” – lest an infected parishioner sicken others.

Such symbolic attempts to stave off an uncertain, invisible threat exemplify the global response to an epidemic that is still not well understood: a combination of panic and prayer.

WHO Turns On China, Demands To Know How Nearly 2,000 Doctors Were Infected With COVID-19

Profile picture for user Tyler Durden

Summary:

  • China says 1,716 medical workers have been infected

  • WHO demands to know more about sick doctors, insists group of 12 virus experts will reach Beijing over the weekend

  • Singapore reports largest daily jump in cases amid increased human-to-human transmission

  • Hong Kong reports 3 new cases

  • Hubei’s new party boss orders quarantine tightened

  • President Xi touts new “biosecurity law”

  • Hong Kong Disney land offers space for quarantine

  • Chinese company says blood plasma of recovered patients useful in combating the virus

  • US mulling new travel restrictions

  • Japan reports 4 new cases; one patient recently returned from Hawaii.

  • CDC Director: Virus is “Coming” to the US.

Update (1040ET): The WHO has just wrapped up its now-daily presser for Friday, and it appeared to focus on imminent plans to send a group of a dozen scientists and researchers to Beijing to figure out exactly what the hell is going on.

Much fuss has been made over the past week over China’s continued refusals to allow Americans, or any other foreigners, for that matter, to offer assistance with the virus response. It’s almost as if they’re…hiding something…

Even after yesterday’s big reveal about the change in their ‘pro forma accounting standards’ to reflect a higher death toll and number of confirmed cases (the jump alarmed global investors and prompted a selloff on equity markets), China still won’t let Americans participate in a WHO-sponsored team of 12 researchers who are traveling to the mainland.

It was a big deal earlier this week when Beijing said it would reluctantly accept the team, ending weeks of suspiciously standoffish behavior (though the WHO bigwigs did travel to Beijing for meetings). But as one analyst said earlier on CNBC: ‘We want to see foreign boots on the ground before we simply take the Chinese at their word’.

It’s also notable how the WHO, initially a purveyor of what seemed like propaganda hot off the presses in Beijing, seems to have turned completely against its benefactor, now treating it with public suspicion.

  • WORLD HEALTH ORGANIZATION TEDROS SAYS WE NEED TO KNOW MORE ABOUT INFECTION OF 1,760 CHINESE HEALTH WORKERS, INCLUDING TIME PERIOD AND CIRCUMSTANCES

  • WHO BOSS TEDROS SAYS HE EXPECTS FULL TEAM OF WHO-LED INTERNATIONAL HEALTH EXPERTS TO TOUCH DOWN IN CHINA OVER WEEKEND TO HELP PROBE CORONAVIRUS

  • WHO MISSION TO CHINA WILL FOCUS ON UNDERSTANDING TRANSMISSION OF CORONAVIRUS, SEVERITY OF DISEASE AND IMPACT OF ONGOING RESPONSE MEASURES – WHO CHIEF TEDROS SAYS

  • WORLD HEALTH ORGANIZATION TEDROS SAYS WE NEED TO KNOW MORE ABOUT INFECTION OF 1,760 CHINESE HEALTH WORKERS, INCLUDING TIME PERIOD AND CIRCUMSTANCES

But after today’s WHO press conference, we were left with the distinct impression that it’s almost as if China doesn’t…want the team to come.

Why else would they have waited to reveal the figures about all the sick doctors and health-care workers until Friday morning in the US and Europe? Just a thought.

Back in the US, a team of American expertss is prepared to travel to China to investigate the outbreak on a moments notice, should they ever receive clearance from a government official, according to Secretary Azar.

As he said (and we noted) earlier, the US is bracing for the possibility that the warm weather doesn’t kill the virus, as President Trump expects.

Anyway, moving away from China, we’ve seen unconfirmed reports of four patients in St. Petersburg escaping a COVID-19 quarantine. Earlier in the week, two women escaped quarantines in Siberia.

* * *

Update (1000ET): China is turning the quarantine nob up to ’11’.

After imposing strict lockdown conditions on nearly a third of the country, Beijing’s is kicking off its shift to ‘wartime measures’ by adopting even more strikingly draconian measures on the residents of its capital city.

From Feb. 14 on, all people returning to the city will be advised to quarantine for 14 days.

Meanwhile, the BBC reports that hundreds of conference atendees in London have been contacted by health officials after one of them was later diagnosed with the virus.

The person, who has not been identified, attended the UK Bus Summit at the QEII Conference Centre last week. Two Labour MPs who attended the conference said they’re cancelling public events until Feb. 20, just in case.

So far, nine people in the UK have been confirmed to have the virus.

* * *

Update (0915ET): Japan has reported 4 new cases of the virus, including one man who recently returned from the US state of Hawaii, and another who helped transfer an infected patient diagnosed aboard “the Diamond Princess”, the cruise ship that has been quarantined in Yokohama for 10 days.

Meanwhile, over in the US, this interview of the director of the CDC warning that the virus could become widespread in the US ‘beyond 2020’.

* * *

Update (0850ET): Health and Human Services Secretary Alex Azar said during an interview on Friday morning that more travel restrictions are “on the table,” suggesting that the US might apply similar restrictions to Hong Kong, Singapore, Japan and other Asian countries that have reported rising numbers of cases.

Earlier this month, the State Department raised its travel alert for China to ‘4’, and the US imposed restrictions on foreigners who have recently traveled to China and re-routing Americans who have been to viral hotspots to certain US airports for screening on arrival. These travel restrictions have infuriated Beijing, and prompted a government spokesperson to accuse the US of spreading hysteria.

Even if the virus does “go away” in April, as President Trump has insisted…

…At this point, Q1 GDP is going to be a disaster anyway, so the US might as well kitchen-sink it.

And it’s not like investors have anything to worry about – bad news is still good news, after all, and the market will simply go to pricing in ~1 Fed rate hike in 2020 to ~2.

* * *

Update (0810ET): Earlier this morning, Hong Kong confirmed three more coronavirus infections, bringing the total number of cases in the city to 56.

CAP

Here’s more information on the new cases from SCMP:

  • The Centre for Health Protection said one of the three cases involved a man in critical condition after suffering shortness of breath for more than 10 days. He had to be intubated in Princess Margaret Hospital. He lives in Shek Lei Estate in Kwai Chung, and passed through the Lok Ma Chau border crossing on January 22.

  • Another person who tested positive for the virus, which causes the disease known as Covid-19, was the cousin of a previously infected case. Both attended a family gathering of 29 at a restaurant in North Point on January 26. At least six other members at that gathering have been infected with the new deadly virus, while at least two are still in quarantine pending test results.

  • The third case is a worker in a dim sum restaurant in Sheung Wan, whose husband visited their son in Xinhui, Guangdong province, from January 23 to January 28. Her husband and son are not infected.

Unlike most of the countries that have reported cases of the virus, both Singapore and Hong Kong have confirmed human-to-human transmission within their own borders, meaning the outbreak has already started to spread past the 2nd and 3rd generations of the infected.

Though Singapore is still ahead in terms of number of cases, Hong Kong is giving it a run for its month (though, as we’ve said before, it’s an outbreak, not a race).

* * *

Following Chinese health officials’ claim last night that it “double-counted” some deaths (while crematoriums in the country have been working 24/7 as the outbreak has worsened over the last few weeks), the good people at China’s NHC have disclosed for the first time that 1,716 medical workers have been infected across the country.

Does this figure seem a little underwhelming? Officials put the infected medical worker total at 3.8% of 60k+ total cases on the mainland, and added that six medical workers – including the martyr Dr. Li – have died as of Friday. Of course, even if they’re all wearing protective gear (which we know many aren’t especially in the hardest hit areas like Hubei) this number would still seem low for such an infectious disease, given that more than 65,000 cases have been confirmed across the world.

One expert who spoke to the New York Times said the number of infected medical workers is “concerning.”

“I think it’s quite concerning,” said Benjamin Cowling, a professor of epidemiology at the University of Hong Kong. “Healthcare workers face the challenge of caring for a substantial number of patients in Wuhan. It’s worrying to discover that a number of them have been infected.”

From what we’ve heard and read, it seems that shortages of supplies like facemasks, gloves, goggles and other protective gear have persisted, even in Hubei, according to the NYT. During the SARS outbreak, 961 medical workers were infected, representing some 18% of all infections. Since COVID-19 is even more contagious than SARS, we’d expect the number of medical workers infected to be even higher.

After expressing skepticism about Beijing’s response to the virus earlier in the week, it looks like the WHO is back to shilling for the Communist Party, claiming overnight that the jump in cases in China shouldn’t be characterized as a “spike,” and that it’s normal to change how cases are defined.

Across the mainland, the Chinese people, who have been frustrated by the government’s dissembling, have come up with jokes like this one.

CAP

Given everything we’ve learned about the virus, and all the reports about shortages of medical supplies like facemasks across the country, but especially in Hubei Province, we suspect that the real number is much, much larger. It’s just the latest evidence that Beijing hasn’t given up on doctoring its disease stats, even after its big non-admission on Thursday that its methods for confirming virus-linked cases and deaths hadn’t been sufficiently inclusive.

As we first pointed out yesterday, party officials said yesterday that the country would use “wartime measures” – a kind of public emergency declaration – to fight the virus, suggesting that the lockdowns will become even more widespread.

China Has Ground To A Halt: “On The Ground” Indicators Confirm Worst-Case Scenario

by Tyler Durden

Back on Monday, when analysts and investors were desperately seeking clues whether China has managed to reboot its economy from the 2-week long hiatus following the Lunar New Year/Coronavirus pandemic amid the information blackout unleashed by the communist party in the already opaque country, we pointed out some alternative ways to keep tabs of what is really taking place “on the ground” in China, where Xi Jinping has been urging local businesses and workers to reopen and resume output, while ignoring the risk the viral pandemic poses to them (with potentially catastrophic consequences).

Specifically, Morgan Stanley suggested that real time measurements of Chinese pollution levels would provide a “quick and dirty” (no pun intended) way of observing if any of China’s major metropolises had returned back to normal. What it found was that among some of the top Chinese cities including Guangzhou, Shanghai and Chengdu, a clear pattern was evident – air pollution was only 20-50% of the historical average. As Morgan Stanley concluded, “This could imply that human activities such as traffic and industrial production within/close to those cities are running 50-80% below their potential capacity.”

CAP

As a reminder, all this is (or technically, isn’t) taking place as President Xi Jinping on Wednesday sought to send a message that progress had been made in bringing the coronavirus outbreak under control and, for most parts of the country, the focus should be on getting back to business.

According to state television, Xi chaired a meeting of the Politburo Standing Committee, China’s supreme political body, on the latest developments on the crisis and future policy responses, concluding that there had been “positive changes” with “positive results”.

Xi also reiterated that all levels of local government and Communist Party committees must strive to achieve China’s social and development goals this year, indicating that he did not want the public health crisis to hinder progress.

Most importantly, Xi urged local authorities to refrain from taking excessive measures to curb contagion, and yet clip after clip from China…

… shows that the measures being taken are far beyond merely “excessive” when it comes to limiting the potential spread of the virus, which probably makes sense considering the unexpected surge in infected cases in Wuhan, which have sent the total for China just shy of 60,000.

Add to this the ongoing uncertainty that Beijing is far behind the curve in containing the virus, and one can see why most businesses are reluctant to “get back to normal.”

In the latest confirmation of just that, several other indicators have emerged showing that despite Xi’s stark demands for 1.4 billion Chinese to ignore the global pandemic which may very well have been started by one of China’s own experimental labs…

… virtually all of China – and all those critical supply chains that keep companies across the globe humming and stocked with critical inventory – remain on lockdown.

As confirmation, while we wait for an update from Morgan Stanley on the latest Chinese pollution data (at least until Beijing’s definition of “pollution” is also revised) here is JPMorgan showing that while traditionally daily coal consumption – the primary commodity used to keep China electrified – rebounds in the days following the Lunar New Year collapse when China hibernates for one week, this year there hasn’t been even a modest uptick higher, indicating that so far there hasn’t been even a modest uptick in output.

CAP

Yet electricity is just one core indicator of real-time economic activity. Perhaps an even more critical one is human transit across the 1.4 billion person strong nation. Conveniently there is a way to track rudimentary traffic patterns across some of China’s key metro areas, and they show that – in a confirmation of the worst-case scenario – activity, as measured by travel, across most of China appears to have ground to a halt.

The charts below show TomTom’s traffic congestion data across key Chinese cities such as Beijing, Shanghai and Wuhan as compared to the average measurement for 2019. What they show is that virtually nobody appears to be driving in China!

Here is Beijing’s congestion level over the past 48 hours (a 7 day average is also available) compared to 2019. The data indicates that travel is about 70% below its 2019 peak.

CAP

Amazingly, the industrial hub of Guanghzhou also appears to have ground to a crawl:

CAP

By comparison, here is what Los Angeles traffic looks like over the past 48 hours vs 2019 average.

CAP

While not perfect, and certainly not a comprehensive view of what is really taking place “on the ground”, the above data is a useful real-time indicator of how the people in China perceive the threat of the coronavirus pandemic, and one thing is abundantly clear: as the pandemic spreads further without containment, and as the charts above flatline, so will China’s economy, which means that while Goldman’s draconian view of what happens to Q1 GDP is spot on, the expectation for a V-shaped recovery in Q2 and onward will vaporize faster than a vial of ultra-biohazardaous viruses in a Wuhan virology lab.

CAP

HUGE: Trump to Hold Second North Korean Summit Next Month

By

Continuing to improve diplomatic relations with the Hermit Kingdom of North Korea, the White House announced Friday that it will hold a second summit with North Korea in late February.

“The announcement came minutes after Trump met with a top North Korean official in the Oval Office for over an hour,” according to Politico. “The North Korean official was reported to be carrying a letter for Trump from his country’s leader, the latest of several missives the two heads of state have exchanged.”

Trump continues make progress in securing peace on the Korean Peninsula, despite the fact that the alleged experts in the mainstream press said that he would have us nuked by this point in his presidency.

“President Donald J. Trump met with Kim Yong Chol for an hour and half, to discuss denuclearization and a second summit, which will take place near the end of Februarym [sic]” the White House reportedly said. “The President looks forward to meeting with Chairman Kim at a place to be announced at a later date.”

Trending: ‘Impeach Rashida Tlaib’ Petition Closes In on 250K Signatures, Highlights False-Residency Accusation

According to the report, Vietnam and Thailand have been mentioned as possible locations.

During the last North Korean summit, which took place in Singapore in spring of 2018, North Korean dictator Kim Jong Un verbally committed to full denuclearization. The country has not launched a nuclear test missile since the meeting. North Korea also returned the remains of several U.S. Serviceman killed in the Korean war.

Blog at WordPress.com.

Up ↑