Feb 4, 2020

Axios World

Welcome back to Axios World, where tonight we've got the 1,584 words (6 minutes) you need to catch up on the global response to the coronavirus.

  • I've only mentioned the outbreak in passing in previous editions. Tonight we're diving deep. Was this email forwarded to you? Sign up.

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1 big thing: China's system faces virus test

Illustration: Aïda Amer/Axios

Xi Jinping is often described as the most powerful Chinese leader since Mao, but he's not the face of Beijing's response to what could ultimately be the biggest test of his tenure thus far.

Why it matters: Xi has vowed that China will slay the "devil virus" that has spread from Wuhan and sown fear around the world. But the Communist Party seems intent to steer criticism of its slow initial response — and responsibility should its current steps prove inadequate — away from Xi.

  • Censors have allowed frustrated citizens to criticize local leaders in Wuhan, but they've scrambled to block anything targeting Xi directly, per the Washington Post.
  • State media also stopped stating that Xi "personally directed" Beijing's response, in favor of a message that it was "collectively" directed.
  • Premier Li Keqiang has been tasked with leading the response, and Wuhan mayor Zhou Xianwang has been targeted for much of the blame.
  • Unusually, Zhou has pushed back. He told state TV he lacked "authorization" to inform the public about the virus.

Flashback: In late December, as concern about a new SARS-like outbreak started to spread among medical professionals in Wuhan, local police reprimanded eight doctors for discussing it among themselves in leaked WeChat messages.

  • It was only three weeks later that China publicly acknowledged the danger and ordered a lockdown in Wuhan.
  • In a rare public split with local authorities, China's highest court said last week that the doctors should not have been punished.
“It might have been a fortunate thing if the public had believed the ‘rumors’ then and started to wear masks and carry out sanitization measures, and avoid the wild animal market."
— Supreme People’s Court

The centralization of power under Xi can paralyze local and regional officials, Wu Qiang, a former lecturer at Beijing's Tsinghua University, told the FT:

  • “Everyone — from the central government to the local government to the bureaucracy to the party to the military — was waiting for orders from the ‘supreme leader’ before acting."

Information is also even more tightly policed under Xi, but some savvy users recently circumvented the censors by posting online reviews of the HBO series "Chernobyl."

  • The implicit message: China’s leaders, like the Soviet Union's three decades earlier, endangered their people by hiding the truth.
  • But there's another lesson from Chernobyl. The Soviet system that spawned a global danger eventually contained it through a massive mobilization of resources and human sacrifice.
  • Zoom in: It took weeks for China to notify the public of the risks from the coronavirus but just 10 days to build an entirely new hospital to treat it, staffed by 1,400 medical personnel from the People’s Liberation Army.

China has been praised, including by the World Health Organization, for a response that experts say is far better than when SARS struck China in 2003.

  • But several factors that could have strengthened it, chief among them a flow of trustworthy information, are anathema to China's system, particularly under Xi.

Between the lines: One might have expected a strong public response from Xi to the current crisis, if only to justify the cult of personality around him.

  • But as the Economist points out, the constant praise for Xi's infinite wisdom can be a trap: "it leaves essentially no room for the idea that Mr Xi could make a serious mistake."

The bottom line: As the coronavirus crisis plays out, the strengths and weaknesses of the Chinese model will both be on display — even if Xi is not.

2. How the world is responding

Waiting and worrying at the airport in Manila. Photo: Ezra Acayan/Getty Images

China reacted furiously today to a U.S. decision to deny entry to all foreign nationals who had been to China in the past two weeks, denouncing it as a violation of WHO advice that would only spread fear.

  • Any American who visited Hubei province over the past two weeks, meanwhile, will be quarantined for up to 14 days.
  • Between the lines: Some public health experts warn that travel bans are ineffective in fighting outbreaks and discourage international cooperation and transparency.

The global picture: Australia is also barring foreigners who recently visited China, and it has evacuated citizens from Wuhan to remote Christmas Island.

  • Other countries are denying entry to foreigners traveling directly from China (Japan, South Korea), while still more have suspended flights from China (Indonesia, the U.K., Italy), per the BBC.

Russia, which has been carefully tightening its bond with China, took the politically delicate step of closing most of its shared border to people (but not goods).

  • Mongolia also closed its border with China, giving citizens until Feb. 6 to return home.

Hong Kong's position is perhaps most sensitive of all.

  • Carrie Lam, the city's Beijing-friendly leader, said today that she'd close more border checkpoints but not meet the demands of striking hospital workers to close the border entirely.

But some Southeast Asian countries have seemed to focus their public responses on not provoking China, the NY Times reports.

  • "In Cambodia, Prime Minister Hun Sen told a packed news conference on Thursday that he would kick out anyone who was wearing a surgical mask because such measures were creating an unwarranted climate of fear. 'The prime minister doesn’t wear a mask,' he said, 'so why do you?'"
  • Officials from the Philippines had also downplayed the threat but changed course after the first death was reported there.
3. The economic impact

Illustration: Sarah Grillo/Axios

The coronavirus has the potential to be as damaging to the global economy as the U.S.-China trade war, Axios' Dion Rabouin and Joann Muller report.

  • Chinese markets dropped sharply when they reopened today after an extended break for the New Year. The benchmark Shanghai Composite closed down 7.7%.
  • Economists are revising down their growth estimates for China. Europe, Asia and the Americas also will suffer.

Why it matters: China is the world's top trading nation and largest commodity buyer, and the No. 1 trading partner for many of the world's biggest economies, including Germany and Japan, both of which are suffering already from anemic growth.

  • A swath of industries already have felt the sting, with American companies ranging from Starbucks, Levi Strauss and Disney to Apple, Google and JPMorgan shutting down operations in China or halting production and banning employee travel.
  • Hotels, airlines, luxury retailers and cruise lines also have been hard hit, as much of China — home to some of the world's biggest spending tourists — is locked down until further notice.
  • Automakers already coping with lower car sales in China, the world’s largest vehicle market, are now bracing for further declines due to lost production.

What to watch: "If the WHO declares it as a pandemic, that too will have a depressing effect on the global economy because countries will put in certain limitations on commerce, on trade, and that will obviously slow down growth," says Bernard Baumohl, chief global economist at the Economic Outlook Group.

Worth noting: There were grave concerns about the economic impact of SARS in 2003. Now, China's economy is 6x larger.

Go deeper

4. State of the outbreak
Expand chart
Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC and the Chinese health ministry; Map: Danielle Alberti/Axios
  • In the Philippines, the first death was reported outside China.
  • In the U.S., cases have been confirmed in California (6), Illinois (2), Arizona (1), Massachusetts (1) and Washington state (1).
  • Initial data suggests a fatality rate of around 2%, Tom Inglesby of Johns Hopkins writes for Foreign Affairs. That's much lower than SARS but orders of magnitude higher than the flu, though likely to fall significantly over time.

Context: "Zika spread through the Americas for 16 months before anyone even knew it was there."

  • "Ebola spread through West Africa for several months before any researcher managed to sequence its genes."
  • "But this time, in a matter of weeks, researchers recognized a new respiratory virus in the middle of flu season, identified it as a coronavirus, isolated it, sequenced its genome dozens of times over, and worked out how it sticks to human cells," the Atlantic's Ed Yong reports.
5. This virus is not Chinese

Love in the time of coronavirus, on the Hong Kong metro. Photo: Anthony Wallace/AFP via Getty Images

The origins of this outbreak are uncertain.

  • It may have originated in bats then spread between species and eventually to humans — potentially through animals sold at Wuhan's "wet market" (though that is disputed).
  • The virus spread quickly in Wuhan, one of China's many fast-growing megacities.

But it did not spread via "bat soup," James Palmer notes in Foreign Policy, debunking one of many false claims spreading online.

  • "These prejudices can fuel fear and racism," Palmer writes. "As the Wuhan virus spreads, the Chinese as a group are more and more likely to be blamed for its incubation and spread."
  • "In countries such as Malaysia and Indonesia, where there are already clashes around ethnic Chinese, those sentiments could turn nasty."
  • "In the West, especially under the Trump administration, it could fuel both government and public prejudices."

The FT has cataloged a number of worrying incidents:

  • "In Hungary, Vietnamese shop owners put up signs saying that they are not Chinese."
  • "Japanese media have reported 'No Chinese' signs being put up by food businesses, including a sweet shop in Hakone and a ramen restaurant in Sapporo."
6. Data du jour: No trust for MBS

"They don't trust me? Why not?" Photo: Eliot Blondet/AFP via Getty Images)

Just 20% of Americans have confidence in Saudi Crown Prince Mohammed bin Salman to "do the right thing regarding world affairs," per a new Pew survey.

  • Trust is also low in Israel (6%), Lebanon (23%), Turkey (14%) and Tunisia (18%), though the latter two countries have even less faith in President Trump.
  • Sunni Muslims in Lebanon are far more likely to trust MBS than Shiites (50% vs. 4%).
  • MBS' father, King Salman, polled higher in all four of the Middle Eastern countries in 2017 but didn't break 33% in any of them.

Worth noting: Hatice Cengiz, the fiance of murdered journalist Jamal Khashoggi, will attend the State of the Union tomorrow night as a guest of Rep. Gerry Connolly (D-Va.).

7. Stories we're watching

A moment of reflection during Brazil's Festa de Yemanja. Photo: Bruna Prado/Getty Images

  1. Trump restricts immigration from 6 more countries
  2. Australia fires: "Widespread devastation across the ecosystem"
  3. Pompeo says NPR dispute sends "perfect message about press freedoms"
  4. Arab League rejects Trump peace plan
  5. Pro-Netanyahu media turns on Kushner
  6. Bolton book: Trump asked to assist Ukraine pressure
  7. OPEC considers production cuts as coronavirus hits demand


"You know what it means for Nigeria, Eritrea, Myanmar and Kyrgyzstan to be put in the same category? Eritrea is the 'North Korea of Africa,' Myanmar is a pariah state & Kyrgyzstan is in the middle of nowhere. The US Government does not rate us, at all."
Onye Nkuzi, a Lagos-based IT consultant reacting to Trump's travel ban expansion