Tuesday 3 March 2020 ★ FINANCIAL TIMES 7
C H R I ST I A N S H E P H E R D A N D Y UA N YA N G
BEIJING
For many, the violent conclusion to a
family game of mah-jong summed up
everything that is wrong with the local
enforcers spearheading China’s efforts
to contain the deadly coronavirus out-
break.
In an incident from Hubei province
captured on video, a gang led by a cam-
ouflaged man wearing a red armband
strides aggressively into a village home
and roughs up an inhabitant, before
pulling the mah-jong table outside and
kickingittopieces.
Given China’s history of government
enforcement, it could be viewed as a rel-
atively minor scuffle. But the brutality
of the small-time officials touched a
nerve, evoking painful memories of the
state-backed savagery of the 1960s and
1970s. Then, leader Mao Zedong gave
his support to millions of students who
stormed into private homes, beating
people up and smashing property in the
nameofcommunism.
“That lot in red armbands act like
bandits,” one internet user commented
on the video. “Stopping the coronavirus
isnottheCulturalRevolution.”
The enforcers were among volunteers
and local officials who have placed
themselves on the frontline of President
Xi Jinping’s “people’s war” against the
virus.ManyChinesehavetakentorefer-
ring to them as “red guards”, the name
for the Mao-era students, due to their
armbandsandgang-likethuggery.
“Although the Cultural Revolution
has been over for more than 40 years,
you can still see the bruises it has left on
Chinese society,” said David Zhang, a
lawyer at Beijing Mo Shaoping law firm.
“Contempt for the law, violations of
basic human rights and dignity — these
thingsstillexisttoday.”
The virus that began in Wuhan has in
two months infected more than 80,
Chinese people and delivered a savage
blow to the world’s second-largest econ-
omy. The outbreak, which caught the
regime off-guard, poses the biggest
threat yet to Mr Xi’s eight-year leader-
ship, adding to pressure for an effective
grassrootsresponse.
As part of these efforts to slow its
spread, each Chinese village and urban
residential compound has been told to
enforceitsownpreventionregime.
InbigcitiessuchasBeijingandShang-
hai, these are usually lax. But in some
regions, especially those nearer the out-
break’s centre in Hubei province, local
officials have quickly established their
ownfiefdoms,barringoutsiders,confin-
ing those considered an infection risk
and publicly shaming anyone who does
notfollowtheirinstructions.
In other cases caught on video, people
have been welded into their homes for
“quarantine” or tied to lampposts for
not wearing a face mask. Beijing has
made efforts to temper the enforcers,
with one leading public security official
warning against over-the-top and “sim-
plistic” measures that “damaged theimage” of the regime. But such state-
mentshavelittleeffectontheground.
Localrulesoverhowtohaltthevirus’s
spread are drawn up by community
managers without official oversight or
guidance. In one example from Hubei,
an “urgent notice” warned households
against eating together and urging even
married couples to sleep in separate
beds. In Henan province, which neigh-
bours Hubei, a group of villagers were
madetoreciteanapologybypoliceafter
they were caught playing cards without
wearing face masks. Towns and cities
across China have moved to stop large
gatherings, with harsh penalties levied
on offenders. The day before the mah-
jong fight, the city of Xiaogan barred all
residentsfromleavingtheirhomes.
“All residents without anti-epidemic
relateddutieswhoareonthestreetswillbe, without exception, sent for compul-
sory collective study,” ordered the town
ofWuxue.Thephrase“collectivestudy”
struckachordforitsechoesofthegroup
sessions where Communist party ideol-
ogy was transmitted, a practice com-
mon under Mao. At least five cities have
adoptedthisapproach.
“No matter how tense the situation,
local governments cannot assume the
powers of the nation’s highest institu-
tions,” said Tong Zhiwei, a law scholar at
the East China University of Political
Science and Law in Shanghai. “These
aretypicalexamplesofoversteppingthe
bounds of their authority... They
mustbestoppedimmediately.”
Additional reporting by Nian Liu in Beijing
Editorial Commentpage 10
Lexpage 12
Marketspages 23-AN D R E W E D G E C L I F F E- J O H N S O N
NEW YORK
The coronavirus outbreak is straining
the just-in-time supply chains on which
global business depends as US ports
expect cargo volumes to fall 20 per cent
or more in the first quarter of 2020.
Businesses that began the year celebrat-
ingatruceintheChina-UStradeconflict
are struggling to secure goods, reviving
debate about reliance on China as more
new cases of the virus are reported out-
sidethecountrythaninsideit.
Myron Brilliant, head of international
affairsattheUSChamberofCommerce,
said a close watch was being kept on the
impact of the virus “on supply chains
and on trade flows” through corporate
contacts in China, where many factories
wereoperating“wellbelowcapacity”.
EconomistsatBainandCompanysaid
a “rapid V-shaped recovery is becoming
less likely by the day”, echoing Mr Bril-
liant’s concern about the impact of the
virus spreading to other manufacturing
hubs.“TheworseningsituationinSouth
Korea also implies the supply chain dis-
ruptionswillnotbeconfinedtoChina.”
Chris Connor, chief executive of the
American Association of Port Authori-
ties, expected cargo volumes to fall
20 per cent in the first quarter and
warnedtheeconomicimpact“caneasily
runintothetensofbillionsofdollars”.
Panjiva, the trade data company, said
west coast ports are particularly
exposed. Cargo volumes fell more than
5 per cent in January at the Port of Los
Angeles, the country’s busiest, which
expectsa25percentdropforFebruary.
The impact on shipping “appears to
be much worse” than during the Sars
outbreak almost 20 years ago, Gene
Seroka,executivedirector,toldCNBC.
ProlongeddisruptionofChineseman-
ufacturing could be “crippling to global
supply chains”, said analysts at Citi,
even as executives includingApple’sTim Cooknoted that capacity in Chi-
neseplantshadbeguntopickup.
Chinese factories loom large in auto-
motive and electronics supply chains,
but warnings of disruption have come
from a wide array of companies, from
Best Buy, the gadget retailer, toCrocs,
the shoe brand. Carmakers fromNissan
toFiat Chryslerhave experienced dis-
ruption, Panjiva reported, while some
businesses,suchasJohnDeere,thefarm
equipment maker, are turning to costly
expeditedshipping.
ColumbiaSportswear,amakerofrain
jackets and boots, said its results this
year would be “significantly affected”
because contract manufacturers have
found it difficult “to source certain raw
materials and to produce and fulfil fin-
ishedgoodsinatimelymanner”.
Adient, a maker of car seats, expected
production volumes to fall about 70 per
cent in February and 40 per cent in
Marchagainstpreviousestimates.
The outbreak in industrial Hubei
province came after more than two
years of trade battles between Washing-
ton and Beijing that have prompted
many multinationals to review their
dependenceonChineseproduction.
Michael Fleisher, chief financial
officer ofWayfair, the ecommerce com-
pany, said: “Because our industry has
lived with tariffs for some time, most of
our suppliers are well down the path of
creatingsourcingalternativesalready.
“Though just over half of our suppli-
ers’ product is now manufactured in
China, for any given item we typically
have additional selection coming from
various countries of origin, creating
optionsforsubstitution.”
The virus may be “adding to the
urgency of switching away from China
introduced by the trade war”, Panjiva
analysts said, observing thatGoogleand
Microsoftwere among the companies
lookingtoswitchmanufacturing.
Jeffrey Witherell, chief executive of
Plymouth Industrial, a real estate
investment trust, echoed the hope
expressed by Wilbur Ross, commerce
secretary, that the crisis would prompt
more US companies to consider bring-
ingmanufacturingclosertohome.
Larry Fink, chief executive ofBlack-
Rock, the asset manager, said: “I do
believe there’s going to be a review of
supply chains at every company.” Out-
sized reliance on supplies from China,
“maybeinappropriate”,hetoldtheAus-
tralianFinancialReviewlastweek.
Additional reporting by James Politi in
WashingtonDA N I E L D O M B E Y— MADRIDSpain is considering action against the
kissing of religious images to combat
the spread of coronavirus, a move that
follows France’s recommendation that
the traditional greeting with kisses on
each cheek be curtailed.
As the number of cases in Spain rose to
114—morethandoublethelevelonSat-
urday—FernandoSimón,co-ordinating
the national response, said curbs would
applyonlyinthemostaffectedareas.
“Itisoneofthemeasuresthatisonthe
table,” said Dr Simón, the director of the
health ministry centre of co-ordination
respondingtotheoutbreak.
He added: “What I can guarantee you
is that basic measures of hygiene are
fundamental to avoiding transmis-
sion... Specific prohibitions are on the
table.”
Olivier Véran, France’s health minis-
ter, has warned against kissing or shak-
ing hands. “A new stage of the epidemic
hasbeenreached,”hesaidonFriday.
Russian Cossacks have been told not
to kiss icons or clerics’ hands. The order
was issued by Gennadiy Kovalev, head
of the Council of Cossack Hetmans of
Russia. Kissing icons is a common prac-
ticeintheRussianOrthodoxChurch.
It is a custom in parts of Spain to kiss
imagessuchasthehandofstatuesofthe
Virgin Mary. “The virgin has immacu-
late hands; they are free of the virus,”
one worshipper told Spanish television
attheweekend.
Dr Simón said in the greater Madrid
area, where there were around 30 docu-
mented cases, authorities were looking
at an evangelical group in which the
virushadspread.
EU health ministers plan to meet in
Brussels on Friday to co-ordinate their
responses. The bloc’s public health
warning has been upgraded from “low
tomoderate”to“moderatetohigh”.China’s local
enforcers revive
bitter memories
from Mao era
Brutality of ‘red guards’ reminiscent of
state-backed savagery in 60s and 70s
Public health
Faithful in
Spain face
pressure to
stop kissing
Manufacturing.Economic impact
US big business focuses on
weak links in supply chains
Health precautions: a security guard
checks the temperature of people
entering apartments in Beijing last
week. Below, a police officer walks
past a picture of Mao Zedong
in Tiananmen Square
Kevin Frayer/GettyCO R O N AV I R U S
Disruption to just-in-time
processes is raising doubts
about merits of outsourcing
The US manufacturing sector
continued to expand in February but
grew at a slower pace, as global
factory closures due to the spread of
coronavirus threw a wrench into
supply chains.
The Institute for Supply
Management said yesterday its index
tracking manufacturing activity fell to
50.1 last month, compared with 50.9 in
January. Economists were looking for a
stronger reading of 50.5.
Manufacturing was a drag on the US
economy in the back half of 2019. The
ISM index slipped into contraction —
below a reading of 50 — in August
and remained there until January,
when factories showed signs of a
recovery following a truce in the tradefight between the US and China. But
the fallout from the coronavirus
outbreak has presented new
challenges for the sector, which has
grappled with Boeing’s production halt
of the 737 Max and economic
weakness overseas. Respondents in
the ISM survey reported difficulties in
getting parts and materials due to
disruptions in their supply chains. One
company said coronavirus was
“wreaking havoc on the electronics
industry”. A group in the food,
beverage and tobacco industry
expected softness in demand and
trouble sourcing items from China.
“Global supply chains are impacting
most, if not all, of the manufacturing
industry sectors,” said Timothy Fiore,
chair of the ISM manufacturing
business survey committee. He added:
“Sentiment this month is marginally
positive regarding near-term growth.”
Matthew Rocco in New YorkTracking index
Factory activity
hit by slowdownUS factories feel impact
of coronavirus
Purchasing Managers’ IndexSources: Refinitiv; Institute for Supply ManagementContracts & Tenders
MARCH 3 2020 Section:World Time: 2/3/2020 - 19: 08 User: john.conlon Page Name: WORLD2, Part,Page,Edition: LON, 7 , 1