Topline: Chinese markets closed nearly 8% down on the first day of
trading since the extended Lunar New Year holiday over fears of the
coronavirus, and measures taken to control the fast-spreading pneumonia-like
virus.
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China’s benchmark
stock index, the Shanghai Composite, saw its worst day since August 2015. It
closes nearly 7.72% down in a $393 billion share sell off that saw the majority
of stocks suspended after hitting the 10% daily volatility limit.
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The fall came despite
efforts by China’s central bank to ease the impact of the virus on the world’s
second largest economy with a $173 billion package announced on Sunday to
provide liquidity in the banking system, and currency market .
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Hong Kong announced on
Monday all but three borders checkpoints with the mainland China would close on Monday, while many workers in the
Asian financial hub have been told to work from home. Many expat families
have temporarily left, according to Reuters.
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Some hospital workers
in Hong Kong have called a strike to press the city’s government for a total
travel shutdown mainland China, following the suspension of rail and ferry
links last week.
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Some 17,000 people are
infected with the pneumonia-like illness across 30 countries, mainly in China,
while 362 have died, including one person in the Philippines. Medical experts
in Hong Kong say that the actual number of infections in Wuhan could be higher.
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Several countries are
now denying entry to visitors from China including the U.S. Last week, the
U.K., U.S., Japan and Australia were some of the countries to evacuate their citizens
from Wuhan, the central Chinese city at the heart of the outbreak.
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Several countries are
contributing towards expediting a vaccine for the strain, formally known as
2019-nCoV. British drugmaker GSK is collaborating with the Norway based
Coalition for Epidemic Preparedness Innovations to develop one, while the
British government has donated $26 million (£20 million) to CEPI’s efforts.
Germany and France expect to develop a vaccine within months.
Key background: Last week, the number of new coronavirus
cases overtook the SARS outbreak in 2002-2003, in which 8,000 people were
infected. The impact of the coronavirus could overshadow SARS given that
China’s GDP has exploded from $1.6 trillion in 2003 to $13.6 billion today as
China became the world’s de facto manufacturing hub, while travel links with
the rest of the world have grown dramatically. In a bid to curb the spread of
the new virus, which broke out in a Wuhan food market in December, the Chinese
government has put millions of people across the worst-hit cities on lockdown
in an unprecedented quarantine operations. Several airlines have suspended
flights to China while the Trump administration’s travel ban for foreign
nationals who visited China in the last 14 days kicked in on Sunday evening. The
World Health Organization has advised against travel restrictions, with the
director general Tedros Adhanom Ghebreyesus saying on Friday that such measures
are not necessary.
Although it is spreading quickly, much about
the virus remains unknown. It is thought to be transmitted through infected
droplets from coughing and sneezing, while symptoms include fever and in severe
cases, pneumonia, kidney failure and death.
Surprising fact: Wuhan authorities have scrambled to build
two specialist hospitals, with the first 1,000-bed facility opening its doors
to patients on Monday. But it is likely to be overrun with patients, much like
other facilities in Hubei province that are struggling to cope with the sheer
demand for care. Patients are reportedly waiting 10 hours to see a doctor,
while some are facing medical supply shortages.
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