Coronavirus death toll rises to 1,000 as China’s economy begins to feel the heat of the virus

BY REUTERS: The death toll from China’s coronavirus epidemic has soared past 1,000, the government said on Tuesday, as worry grew that the extent of economic disruption to the world’s second-largest economy was greater than estimated.

Companies struggled to get back to work after an extended Lunar New Year holiday while hundreds of Chinese firms said they would need billions of dollars in loans to stay afloat. Layoffs also began, despite assurances by President Xi Jinping that widespread sackings would be avoided.

“The coronavirus outbreak completely changed the dynamics of the Chinese economy,” JPMorgan analysts said in a note to clients as they again downgraded forecasts for Chinese growth this quarter.

Another 108 virus deaths were reported on Tuesday, a daily record, taking to 1,016 the total of those killed in China, the National Health Commission said. All but five of the deaths were in the central province of Hubei, the epicenter of the outbreak.

There were 2,478 new confirmed cases on the mainland by Monday, down from 3,062 the previous day, bringing the total to 42,638. It was the second time in two weeks that authorities recorded a daily drop in new cases, offering a hint of hope the epidemic was peaking.

Asian stock markets rallied as investors took some comfort from the drop, even though experts have warned it is too early to assume the numbers represent a trend.

The World Health Organization (WHO) said the spread of cases outside China could be “the spark that becomes a bigger fire”.

Heavily sold currencies such as the Australian dollar AUD=D3 also gained and the safe-haven Swiss franc CHF= slipped to its weakest since December.

Only 319 cases have been confirmed in 24 other countries and territories outside mainland China, according to WHO and Chinese health officials, with two deaths, one in Hong Kong and the other in the Philippines.

While a WHO team has arrived in China to help investigate the outbreak, the agency began a two-day meeting of 400 researchers in Geneva aimed at accelerating research into diagnostics, drugs and vaccines.

SACKINGS START

More than 300 Chinese companies are seeking bank loans totaling at least 57.4 billion yuan ($8.2 billion) to help cope with the disruption caused by locked down cities, closed factories and crippled supply lines, two banking sources said.

Among the prospective borrowers are food delivery giant Meituan Dianping, smartphone maker Xiaomi Corp  and ride-hailing provider Didi Chuxing Technology Co, the sources said.

Chinese firm Xinchao Media said on Monday it had laid off 500 people, or just over a tenth of its workforce, and restaurant chain Xibei said it was worried about how to pay the wages of its roughly 20,000 workers.

Authorities said they would roll out measures to stabilize jobs, in addition to previously announced cuts to interest rates and fiscal stimulus designed to minimize any downturn.

But analysts at investment bank Nomura said measures of returning workers and passenger traffic flows suggested the virus had “a devastating impact on China’s economy in January and February”.

In a note, they wrote, “We are concerned that global markets thus far appear to be significantly underestimating the extent of disruption.”

Bankers in Asia were bracing for a deal drought with several auctions of assets facing delays or re-assessments and preparations for Chinese initial public offerings slowing.

“Nothing is happening,” said a Hong Kong-based investment banker with a Wall Street bank.

Hubei, where the flu-like virus emerged from a wildlife market in the provincial capital of Wuhan in December, reported 2,097 new cases and 103 new deaths on Feb. 10, its health authority said.

The original article was published here