The chief of the International Monetary Fund dubbed the Chinese coronavirus “our most pressing uncertainty” as Iran reported two deaths, Japan let cruise ship passengers out of quarantine and European sportswear brands said they were taking a hit from the truly global outbreak.
IMF Managing Director Kristalina Georgieva said no one anticipated the illness known as COVID-19 in January, making it a “stark reminder of how a fragile recovery” after a slow 2019 “could be threatened by unforeseen events.”
Ms. Georgieva said the Chinese economy can bounce back quickly if disruptions from the virus end soon, with a sharp drop in growth for the first quarter and “minor and short-lived” spillovers elsewhere.
A long-lasting and severe outbreak, however, “would result in a sharper and more protracted growth slowdown in China,” she wrote in a blog post. “Its global impact would be amplified through more substantial supply chain disruptions and a more persistent drop in investor confidence, especially if the epidemic spreads beyond China.”
German companies Adidas and Puma, which have headquarters in the same Bavarian town of Herzogenaurach, said the outbreak already is denting their otherwise thriving businesses.
Adidas reported an 85% drop in Chinese business compared with a similar period last year.
Puma said it is coming off its best year ever, with revenue surging and a strong fourth quarter. However, the viral outbreak is threatening to put a hitch in their stride.
“After a good start into 2020, February has of course been negatively affected by the outbreak of COVID-19,” Puma CEO Bjorn Gulden told investors. “The business in China is currently heavily impacted due to the restrictions and safety measures implemented by the authorities. Business in other markets, especially in Asia, is suffering from lower numbers of Chinese tourists.”
In the U.S., meanwhile, minutes from a late January meeting of the Federal Reserve revealed that policymakers were upbeat about the easing of trade tensions within North America and between the U.S. and China, though the outbreak presents a “downside risk.”
“The threat of the coronavirus, in addition to its human toll, had emerged as a new risk to the global growth outlook, which participants agreed warranted close watching,” minutes from the Jan. 28-29 Fed meeting said.
The overwhelming number of coronavirus cases is in China’s Hubei province, where the outbreak began in the main city of Wuhan.
Chinese officials have reported over 74,000 cases and more than 2,000 deaths in their country.
Beijing sounds confident that the spread of the virus will peak soon because the number of new daily infections is dipping below 2,000. Still, the number of unknowns and various strands of cases around the globe have scientists wary.
Some U.S. lawmakers and others distrust the communist government, which isn’t always transparent and is quick to censor dissent.
China expelled three Wall Street Journal reporters Wednesday, reportedly because of an opinion piece in the newspaper that criticized Beijing’s response to the outbreak. The expulsions, which are rare, sparked widespread condemnation.
“The same Chinese Communist Party that sat on the sidelines for weeks while coronavirus plagued Wuhan sprang to action when Chairman Xi’s feelings were hurt by a headline that nobody in China had the freedom to read,” said Sen. Ben Sasse, Nebraska Republican, referring to Chinese President Xi Jinping.
Outside China, more than 900 cases have been reported in over two dozen countries.
The biggest cluster is on the Diamond Princess cruise ship docked off Yokohama, where Japanese authorities began evacuating passengers and crew after a two-week quarantine in which hundreds of people aboard became ill from the virus.
Even as passengers and crew exited, authorities reported that another 79 had tested positive for the virus, bringing total cases tied to the ship to 621.
More than 400 were expected to leave the ship Wednesday. Those who test negative should be off by Friday, though passengers whose cabinmates have become sick may have to stay on the ship for a longer period.
NHK, Japan’s national broadcasting organization, reported that Japanese residents are free to go home after leaving the ship but will be contacted for health checkups.
Over 300 American passengers flew back to the U.S. on a State Department-chartered flight this week.
About 100 Americans were still on the ship. Officials said they must wait 14 days without having symptoms or a positive coronavirus test result before they can fly back to the U.S.
If they show up on American soil anyway, they must complete the mandatory quarantine without showing symptoms or a positive test result, according to the Centers for Disease Control and Prevention.
The rapid spread of the coronavirus caused many to ask why authorities thought it was best to quarantine passengers and crew on the Diamond Princess instead of offloading them to quarantine elsewhere.
It also raised questions about the MS Westerdam cruise ship, which was welcomed by Cambodia after days of limbo at sea, given fears about infections.
An 83-year-old American tested positive in Malaysia after leaving the ship, sparking fears of other cases tied to the vessel. However, the Holland America cruise line said Wednesday that the 781 passengers who remained in Cambodia have tested negative for the virus.
Elsewhere, Iranian officials said two people died from COVIS-19 in the city of Qom.
Kianush Jahanpur, a spokesman for Iran’s health ministry, said in a Twitter post that both died in an intensive care unit “due to age and immune system deficiency.”
Europe has reported nearly 50 cases, according to WHO. With 16, Germany has the largest number.
Adidas, the biggest sportswear company in Europe, said it has a dedicated team in China to work with authorities and ensure the safety of its employees. However, it is dealing with a “pronounced” reduction in foot traffic after it was forced to close many of its stores in China.
“Consequently, our business activity in Greater China has been around 85% below the prior-year level since Chinese New Year on January 25,” the company said.
Adidas said traffic has declined elsewhere, especially in Japan and South Korea, though it has “not yet observed any major business impact outside of Greater China.”
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