Live from Hong Kong
The Hong Kong government and corporations reacted late to the coronavirus but when they did act, the actions were borderline extreme. More than a month later there are still questions with overall results are not nearly as severe as feared.
Word of the coronavirus reached Hong Kong and the world in early January. Hong Kong citizens were curious at first and then almost hyper-reactive. The Wuhan coronavirus was a big unknown and still is.
A Hong Kong Perspective
I happened to be in Hubei Province in China as the word of the virus spread. We made it back to Shenzhen’s massive new and beautiful airport on the 5th and already travel was slowing down. For the next few weeks as we all tried to understand the severity of the virus, I mingled with individuals in Hong Kong via mass transit and at various locations like stores and restaurants. Then came the Chinese New Year in late January and the government of China unprecedentedly shut everything down in Hubei Province in China. Road blocks were erected and people we forced to stay home in Hubei Province. After the Monday and Tuesday holidays, all businesses were shut down in Hong Kong and throughout China at the end of January.
Schools were closed until the end of February in Hong Kong and the following week businesses opened but with the option to work from home, if able. Most companies followed the Hong Kong government’s practices with civil servants and kept their employees home, if able. This has continued throughout the month of February and schools in Hong Kong next announced they would be closed till mid-March and then until April 20th.
The local shops are in poor shape with those that depend on walk-in traffic hurt the most. The only industry that has done ok during the protests, which ended right before the coronavirus outbreak, are grocery stores. To add some perspective, the massive and beautiful Hong Kong airport has seen traffic down from 200,000 passengers on a typical day down to 7,000.
Overall, the people in Hong Kong and China are compliant with government recommendations wearing masks and working from home but after more than a month, most people are beginning to suffer from cabin fever. Also, fewer people, especially Westerners are wearing masks as they can be uncomfortable.
So where are we at today? Companies are slowly getting back to work as the government encourages civil servants to make it back to work. The average company has seen around 20% of their employees in the office in February and this is hoped to increase to 50% within the next few weeks. The economy took a hit.
China’s economy was already slowing and it took a very big hit from the coronavirus. This was not what the regime needed. President Trump’s tariff’s encouraged manufacturers in China to move outside of China and into SE Asia or back to the US. This was the beginning of the economic downturn before the coronavirus. (To get a perspective of how the economy in China is doing, imagine all the major airports throughout China seeing less than 5% of their normal traffic.)
What does this mean for Hong Kong and China?
Hong Kong is one of the most densely populated areas on earth with a population of around 8 million. As of this morning there have been 93 coronavirus cases confirmed (the same as Singapore) and two deaths. The percent of confirmed cases to total population is minuscule at 0.0012%. Deaths as a percent of the population are basically nil
China has a population of around 1.4 billion. The number of coronavirus confirmed cases stands at 78,824 with around 2,700 confirmed deaths. The percent of confirmed cases to the population is also minuscule at 0.0056%. Deaths as a percent of the population are basically nil. These numbers are based on reported cases which may or may not be accurate.
It’s unknown if the actions taken in China and Hong Kong have prevented any deaths but it is suspected that they have. We don’t know if those who died would have died anyways do to old age or other complications. The data is not available.
The economy has certainly been hurt but China’s economy was on the downturn anyways. We still don’t know a lot about the coronavirus with opinions running wild. The word passed around in China is that the US may have started the coronavirus and has the cure that it will then sell to China.
What is the coronavirus and why so scary?
The original scare with the coronavirus was that it was very contagious and deadly but is that really true? We know that the flu is much more deadly:
So far, the new coronavirus, dubbed COVID-19, has led to more than 75,000 illnesses and 2,000 deaths, primarily in mainland China. But that’s nothing compared with the flu, also called influenza. In the U.S. alone, the flu has already caused an estimated 26 million illnesses, 250,000 hospitalizations and 14,000 deaths this season, according to the Centers for Disease Control and Prevention (CDC).
That said, scientists have studied seasonal flu for decades. So, despite the danger of it, we know a lot about flu viruses and what to expect each season. In contrast, very little is known about COVID-19 because it’s so new. This means COVID-19 is something of a wild card in terms of how far it will spread and how many deaths it will cause.
The death rate for the coronavirus appears to be higher than that of the flu:
In the study published Feb. 18 in the China CDC Weekly, researchers found a death rate from COVID-19 to be around 2.3% in mainland China. That’s much higher than the death rate linked to flu, which is typically around 0.1% in the U.S., according to The New York Times.
Even so, the death rate for COVID-19 varied by location and an individual’s age, among other factors. For instance, in Hubei Province, the epicenter of the outbreak, the death rate reached 2.9%; in other provinces of China, that rate was just 0.4%. In addition, older adults have been hit the hardest. The death rate soars to 14.8% in those 80 and older; among those ages 70 to 79, the COVID-19 death rate in China seems to be about 8%; it’s 3.6% for those ages 60 to 69; 1.3% for 50 to 59; 0.4% for the age group 40 to 49; and just 0.2% for people ages 10 to 39. Nobody 9 and under has died of this coronavirus to date.
Clearly not everyone is getting sick from the coronavirus which may be due to actions by China and Hong Kong but may not as well. It does appear that disinfectant sprays work to clean up the virus. But overall, even a far left reporter for NBC warns not to panic:
Don’t panic. Doctors/ virologists I’m speaking to say 98% of people will be fine, even if they get Covid-19. They expect it will go around the world, but that most people who get it will be a little sick, then recover. The danger is to vulnerable people. Hospitals/ old age homes.
— Richard Engel (@RichardEngel) February 26, 2020
To date we really don’t know how this started. There are thoughts that this might slow down over the summer as viruses usually do, but we really don’t know.
Actions by politicians to close schools or businesses or government offices appear to be overreactions to date and actions to save face rather than really impact the spread of the virus.
What does this mean for the US?
The US has reported 60 confirmed cases to date and no fatalities. With 350 million Americans the number of confirmed cases is also at amounts almost nil with no deaths. Overall, the risk in the US of dying due to the coronavirus is basically nil. You could get sick but you have a 99 in 100 chance of surviving even if you do get sick for most the population.
China’s economic woes are not as connected to the US as is being shared. China’s trade with the US of $500 billion is only 2% of the total US GDP of $21 trillion. China can go through an economic collapse and it won’t stop the US and in fact it might help. With a Chinese downturn the US will be the place to invest which will lead to more capital and more growth. The US is bringing back manufacturing from overseas and SE Asia is now replacing China as a trade partner. This is what President Trump wanted, more trade with free nations and less with dictatorial nations.
Economically the markets took a huge hit these past four days with the DOW down more than 3,000 points from 29,000 to less than 26,000. This is clearly an overreaction.