Apple, HSBC, Jaguar catch virus as fallout on world economy grows

The New York Times

Posted at Feb 19 2020 08:21 AM

A closed Apple store in Chengdu, China, on Feb. 6, 2020. Apple, which temporarily closed all 42 of its stores in China last month, said on Monday, Feb. 17, 2020, that it was cutting sales expectations for the quarter, because its supply of smartphones would be limited by shuttered factories in China. Yuyang Liu, The New York Times

Economic fallout from the coronavirus epidemic continued to spread Tuesday, with new evidence emerging in manufacturing, financial markets, commodities, banking and other sectors.

HSBC, one of the most important banks in Hong Kong, said it planned to cut 35,000 jobs and $4.5 billion in costs as it faces headwinds that include the outbreak and months of political strife in Hong Kong. The bank, based in London, has come to depend increasingly on China for growth.

Jaguar Land Rover warned that the coronavirus could soon begin to create production problems at its assembly plants in Britain. Like many carmakers, Jaguar Land Rover uses parts made in China, where many factories have shut down or slowed production; Fiat Chrysler, Renault and Hyundai already have reported interruptions as a result.

US stocks declined Tuesday, a day after Apple warned that it would miss its sales forecasts because of the disruption in China. Stocks tied to the near-term ups and downs of the economy slumped, with financials, energy and industrial shares the leading losers.

The S&P 500 index fell 0.3 percent. Bond yields declined, with the 10-year Treasury note yielding 1.56 percent, suggesting that investors are lowering their expectations for economic growth and inflation.

A train attendant waits to check passengers at a deserted Beijing railway station on Friday evening, Feb. 14, 2020. China signaled on Monday, that it would postpone its most important political spectacle of the year - the annual full meeting of the National People’s Congress - a sign of deepening anxiety within the ruling Communist Party about the threat posed by the coronavirus epidemic. Giulia Marchi, The New York Times

With much of the Chinese economy stalled by COVID-19, the disease caused by the new coronavirus, demand for oil has fallen and prices were down Tuesday, with a barrel of West Texas Intermediate selling for roughly $52.

In Germany, where the economy depends heavily on global demand for machinery and automobiles, a key indicator showed economic sentiment has tumbled this month, as the economic outlook has weakened.

At least 150 million people in China — more than 10 percent of the country’s population — are living under government restrictions on how often they can leave their homes, The New York Times found in examining dozens of local government announcements and reports from state-run news outlets.

More than 760 million Chinese people live in communities that have imposed strictures of some sort on residents’ comings and goings, as officials try to contain the new coronavirus epidemic. That larger figure represents more than half of the country’s population, and roughly 1 in 10 people on the planet.

China’s lockdowns vary widely in their strictness. Neighborhoods in some places require residents only to show ID, sign in and have their temperature checked when they enter. Others prohibit residents from bringing guests.

And with many places deciding their own policies on residents’ movements, it is possible that the total number of affected people is even higher still.

About 500 people will be released Wednesday from a quarantined cruise ship that has been a hot spot of the outbreak, Japan’s health ministry said Tuesday, but confusion about the release was widespread.

The ministry said 2,404 people on the ship had tested negative for the virus, but it did not say how it had decided who would be allowed to leave Wednesday or when others might be released. The ship, the Diamond Princess, has been moored off Yokohama since Feb. 4.

Earlier in the day, the ministry announced that 88 additional cases of coronavirus were confirmed on the ship, bringing the total to 542.

Australia plans to repatriate about 200 of its citizens aboard the ship Wednesday, and other countries have similar plans, but Japanese officials did not say whether any of those people were among the 500 who would be allowed to disembark.

The release coincides with the expiration of a two-week quarantine imposed on the ship, but it was not clear if that was the reason for letting people go. More than 300 Americans were released this week before that period was completed.

The British government is taking steps to evacuate its citizens who have been on the Diamond Princess.

Seventy-four British citizens are on the ship, according to the BBC, which said that they are expected to be flown home in the next two or three days.

China on Tuesday announced new figures for the outbreak. The number of cases was put at 72,436 — up 1,888 from the day before — and the death toll now stands at 1,868, up 98, authorities said.

An analysis of 44,672 coronavirus patients in China whose diagnoses were confirmed by laboratory testing has found that 1,023 had died by Feb. 11 — a fatality rate of 2.3 percent. Figures released on a daily basis suggest the rate has increased in recent days.

That is far higher than the mortality rate of the seasonal flu, with which the new coronavirus has sometimes been compared. In the United States, seasonal flu fatality rates hover around 0.1 percent.

The new analysis was posted online by researchers at the Chinese Center for Disease Control and Prevention.

Overall, about 81 percent of patients with confirmed diagnoses experienced mild illness, the researchers found. Nearly 14 percent had severe cases of COVID-19, and about 5 percent had critical illnesses.

Thirty percent of those who died were in their 60s, 30 percent were in their 70s, and 20 percent were age 80 or older. Though men and women were roughly equally represented among the confirmed cases, men made up nearly 64 percent of the deaths. Patients with underlying medical conditions, like cardiovascular disease or diabetes, died at higher rates.

The director of a hospital in Wuhan, the Chinese city at the center of the epidemic, died Tuesday after contracting the new coronavirus, the latest in a series of medical professionals to be killed in the epidemic.

Liu Zhiming, 51, a neurosurgeon and the director of the Wuchang Hospital in Wuhan, died shortly before 11 a.m. Tuesday, the Wuhan health commission said.

Chinese medical workers at the forefront of the fight against the virus are often becoming its victims, partly because of government missteps and logistical hurdles. After the virus emerged in Wuhan late last year, city leaders played down its risks, and doctors did not take the strongest precautions.

Last week the Chinese government said that more than 1,700 medical workers had contracted the virus, and six had died.


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