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◼ REMARKS Bloomberg Businessweek February 10, 2020KEITH TSUJI/ABACA/SIPA USA/AP PHOTOcorrect. While the number of new infections continues
to rise, the daily rate of increase in China seems to have
shrunk a bit if the numbers can be trusted. “There’s some
reason for optimism, but it’s not conclusive at this stage,”
said Michael Gapen, head of U.S. economics research for
Barclays Investment Bank, on Feb. 3. “This week and next
week are probably the most crucial.”
There are a lot of ways things could sour. The virus might
spread more than expected, flaring up in countries that are
less capable or less willing than China to impose a stringent
cordon sanitaire. Businesses built to survive brief disruptions
will go bankrupt if the epidemic drags on. And in the long
run, even after this epidemic ends, it could leave scars, par-
ticularly in China itself. Corporate executives will be less keen
to do business with the world’s workshop if it’s also perceived
as the world’s incubator of deadly viruses.
Right now no one can be sure which way the story will
go, as forecasters are the first to admit. “Rapid containment
and escalating contagion are both possibilities, and would
result in widely different growth forecasts,” the Bloomberg
Economics forecasters, Chang Shu, Jamie Rush, and Tom
Orlik, wrote in their Jan. 31 report.
What’s clear is that the viral epidemic is already hurting
business. On Feb. 4, Hyundai Motor Co. said it was suspend-
ing production lines at its car factories in South Korea because
of a shortage of parts made in China. Levi Strauss & Co. hashadtoshuta bigstoreinWuhanthatopenedjustfourmonths
ago.AppleInc.,whichearnsabouta quarterofitsoperating
income in China, said on Feb. 1 it was temporarily closing all
of its offices and stores there out of an “abundance of caution.”
Airlines have cut flights in and out of the country. With trans-
portation demand drying up, the price of Brent crude oil plum-
meted to $55 a barrel on Feb. 4, from $69 on Jan. 6.
Even news about the virus that looks positive is less so on
second thought. Consider that, as of Feb. 5, the Philippines
had reported only three cases of the virus, Cambodia one, and
Indonesia zero. Given the close ties all three countries have to
China and their lack of sophisticated surveillance technology
and procedures, it’s likely that cases are simply being missed.
What’s more, some leaders in the developing world seem dan-
gerously blasé. Cambodian Prime Minister Hun Sen said at a
press conference on Jan. 30 that people shouldn’t wear face
masks because they create a climate of fear.
It’s conceivable that the disease could eventually become
more of a problem outside China than inside it. In Africa, “it is
very possible that we have cases that are going on on the con-
tinent that have not been recognized. We have to admit that,”
John Nkengasong, director of the Africa Centres for Disease
Control and Prevention, told reporters on Jan. 28.
TheU.S.isbettersituatedthanAfrica,butstillvulnera-
ble.AlthoughPresidentTrumpbraggedtoFoxNewsina pre-
Super Bowl interview that “we’ve pretty much shut it down,”A supermarket in
Hong Kong on Feb. 5