Closed Doctor who warned on coronavirus dies as cases rise above 28,000 – as it happened

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Live coverage of the coronavirus outbreak that has infected more than 28,000 people in China


China says more than 500 have died and 28,000 infected in outbreak

China has said the death toll in the country has exceeded 500 people with the number of confirmed cases rising above 28,000 as the humanitarian impact from the outbreak continues to deepen.

The statistics from the country’s National Health Commission, which track the virus’s progress through February 5, highlight how it continues to spread across the country even as China takes measures to stem its movement.

In total, 563 people have died, up by 73 from the previous day. The bulk of the new deaths were reported in Hubei province, the centre of the outbreak. The number of confirmed cases increased by 3,694 to 28,018, the health authority reported.


Yum China warns coronavirus could wipe out 2020 operating profits

Matthew Rocco reports from New York:

Coronavirus could drag Yum China to an operating loss this year after the fast-food group closed thousands of its restaurants due to the outbreak.

At stores that have remained open, comparable sales since the Chinese New Year slid 40-50 per cent versus the same holiday period a year earlier, with Yum China citing weaker foot traffic and shortened hours.

“As a result of the outbreak, the company may experience operating losses for the first quarter of 2020, and if the sales trend continues, for the full year 2020,” Yum China said in its fourth-quarter earnings report.

Analysts have forecast an adjusted operating profit – which strips out one-time costs – of $304.4m in the first quarter and $973.7m in 2020.

Yum China said it has temporarily closed more than 30 per cent of its restaurants in China, as retailers across the region shut down in an effort to combat the spread of coronavirus.

The company added that it cannot estimate when it will be able to re-open the shuttered locations, and it may need to close additional stores or reduce hours.

Yum China, which had 9,200 restaurants at the end of December, owns the Pizza Hut, KFC and Taco Bell brands in China.

In the fourth quarter, Yum China reported total revenues of $2bn, up 6 per cent year-over-year and matching estimates. Adjusted earnings per share of 25 cents topped analysts’ forecast of 19 cents.

New York-listed shares of the group fell more than 3 per cent in after-hours trading.


S&P warns of pressure on supply chain for carmakers

S&P Global Ratings has warned that steps taken to limit the spread of coronavirus in China will disrupt the global auto supply chain and dent the prospects of a recovery for car sales in the world’s second-largest economy.

“We estimate the current two-week production shutdown imposed in the Chinese province of Hubei will knock 2 per cent to 4 per cent off total annual production in the region, which is home to about 9 per cent of the total Chinese auto production,” said Vittoria Ferraris, an analyst with S&P Global.

The ratings agency said up to a half of Chinese auto and auto-parts production could be hit if China extends shutdowns outside Hubei to control the spread of the virus.

South Korean carmaker Hyundai said on Tuesday it had to shut down all its domestic car factories after running out of parts in China. Executives at several carmakers in Europe and the US have said they are only weeks away from facing disruptions from lack of Chinese parts.

S&P identified Volkswagen as the company with the largest exposure to China, with around 40 per cent of its consolidated production coming from the country. Suppliers such as Bosch, for which China is its second-largest market, will also be affected.


Hong Kong toilet paper stocks jump on shortage fears

Shares in Hong Kong-listed toilet paper manufacturers surged on Thursday after rumours of possible shortages, after factory closures in mainland China to contain the spread of the virus prompted a run on the daily commodity.

Images of shoppers stacking their carts with toilet paper whipped through social media in the city on Wednesday as people reacted to rumours of impending shortages. Panic buying in recent weeks has stripped shelves of surgical masks, hand sanitiser, bleach and even rice.

Vinda International, which makes brands including Tempo, was up 4.3 per cent and Sunlight Holdings gained 15.1 per cent.

The broader Hang Seng index is up 1.6 per cent and China’s CSI 300 was 0.5 per cent higher.


South Korea announces 4 new coronavirus infections

Edward White reports from Seoul

South Korea on Thursday morning reported four new coronavirus infections, taking its total to 23.

Nearly 1,000 people are now in self-quarantine and are being monitored after coming into contact with those with confirmed infections, according to the Korea Centers for Disease Control.

Fears over the outbreak continue to build among many in South Korea. A rising number of incidences of discrimination toward Chinese people have been reported in local media.

Nearly 700,000 people have signed an online petition calling for South Korean president Moon Jae-in to ban Chinese people from entering the country.

Officials last week chartered two flights to airlift around 700 South Korean nationals out of Wuhan, China, and have set up quarantine facilities outside Seoul, the capital.


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Virgin Australia cites virus in decision to stop flights to Hong Kong

Jamie Smyth reports from Sydney

Virgin Australia says it is exiting its Australia to Hong Kong routes due to the challenging nature of the market, which has been battered by months of civil unrest and more recently the coronavirus outbreak.

“With a decline in demand following ongoing civil unrest, and growing concerns over the coronavirus outbreak in the wider region, we have made the decision to withdraw services,” said John MacLeod, Virgin Australia Group Chief Commercial Officer.

Virgin began a comprehensive review of its business in August when it posted a A$349m full year loss and announced the loss of 750 jobs. In November it announced the suspension of its Melbourne-Hong Kong services, which is effective from February 11. The airline’s Sydney to Hong Kong service will now cease from March 2.

“Current circumstances demonstrate that Hong Kong is no longer a commercially viable route for Virgin Australia to continue operating. However international tourism remains an important part of our strategy,” said Mr MacLeod.


Investors turn to quant models to estimate spread of coronavirus

Hudson Lockett reports from Hong Kong

Investors are turning to quantitative models to try and predict the course of the coronavirus outbreak, with one forecast from research company Gavekal estimating total infections will peak in March.

Didier Darcet, portfolio manager, estimates that while the spread of the virus has continued to accelerate, it is likely to slow in coming months, hitting 230,000 cases by the end of February and peaking in early March.

Mr Darcet notes that while the curve-fitting model used is “unsophisticated”, it also “provides a yardstick with which to assess the day by day evolution of the outbreak”.

He added that if the total number of accumulated infections exceeds 52,000 by Sunday February 9, the estimation will be “reassessed and scaled up significantly”.

The latest figures from China confirmed more than 28,000 cases as of February 5, exceeding the benchmark projection of about 26,600 for the same date in the Gavekal model.


Chinese academic hits out at government response to virus

Xu Zhangrun, a well-known Chinese academic, has criticised the government for its handling of the coronavirus, in a sign that the crisis is fuelling political dissent.

The law professor, who was stripped of his teaching position in March last year, pointed to “closed roads and doors” in an online essay this week, which argued that the political system has “collapsed” after 30 years of reform and opening up.

The article, entitled “People are angry and no longer afraid”, has been widely circulated online and is available here.


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China announces cut in tariffs on US goods

Hudson Lockett reports from Hong Kong

China announced it would halve punitive tariffs on some goods imported from the US, bolstering market sentiment and helping traders to shake off concerns over the continued spread of coronavirus in the world’s second-largest economy.

The country’s finance ministry said in a statement it would lower tariffs on some goods from 5 to 2.5 per cent, and lower those on others from 10 to 5 per cent at 1:01pm on February 14.

China’s CSI 300 index of major Shanghai- and Shenzhen-listed stocks rose 1 per cent in morning trading ahead of the announcement, while in Tokyo the Topix extended earlier gains to be up 2.2 per cent following the announcement.

Also on Thursday, China’s National Health Commission said the death toll in the country had exceeded 500 people with the number of confirmed cases rising above 28,000 as of February 5. The vast majority of new deaths occurred in Hubei province, home to the city of Wuhan, the centre of the outbreak.


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Sa Sa International New Year retail sales crushed by coronavirus

Sa Sa International said its retail sales in Hong Kong and Macau were down 77 per cent over Chinese New Year, compared with a year earlier.

In a stock market filing on Thursday, the company attributed the decline to the “novel coronavirus outbreak”, which it said had resulted in a “decline of mainland tourist arrivals” and “poor local consumer sentiment”.

Over the Chinese New Year period, tourist arrivals from the mainland to Hong Kong were down 86 per cent, according to the Hong Kong Immigration Department. In Macau, transactions from mainland tourists fell 70 per cent, Sa Sa International said.

The company added that it would “adjust its product strategies” in response to the virus:

In view of the continuous efforts made by the Hong Kong and Macau Sars to control the spread of the outbreak, seriously affecting the people traffic, the group will closely review the market condition and adjust its product strategies. Facing the severe shortage of masks and disinfection products, the group strives to support Hong Kong and Macau Sars citizens to combat the coronavirus outbreak by going all out sourcing such products globally and selling them at reasonable prices to cater for their needs.


Virus to weigh on Chinese structured finance

The disruption from the coronavirus will weaken the performance of structured finance deals in China, according to Moody’s.

The ratings agency said on Thursday that the crisis will “weigh on the capacity of some companies and individuals to repay loans”, which could increase delinquency rates in structured deals which bundle them together.

It pointed to “negative credit implications for sectors such as retail, wholesale, logistics, transportation, hospitality, catering and tourism”.

The Chinese securitisation industry, which was first introduced in 2005, has grown over recent years.


China to evacuate Hubei residents from Bali to Wuhan

Stefania Palma reports from Singapore

Chinese state media tweeted on Thursday that Hubei residents “stranded on the island of Bali” will be flown back to Wuhan this Friday.

https://twitter.com/PDChina/status/1225290980200345600?s=20

The Chinese government has sought to return Hubei residents overseas to the province. Last weekend, China’s Ministry of Foreign Affairs said 399 Hubei residents had returned home to Wuhan by charter flights from Thailand, Malaysia and Japan.

The latest announcement comes one day after Indonesia suspended all flights to and from China as well as visas on arrival for Chinese citizens. The consulate general said in a statement that Friday’s flight was “the only temporary commercial charter flight from Bali to China before the end of March,” when Indonesia is set to lift its flight suspension.

Friday’s trip is optional and travellers can register to purchase a plane ticket until 2pm today, Indonesia time. Those passengers who show coronavirus symptoms will not be allowed to board the plane.


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Toyota warns of coronavirus impact on car sales in China

Kana Inagaki reports from Tokyo

Toyota has warned that it expects a dent on car sales in China as the coronavirus outbreak hurts consumer sentiment in a market that was already slowing before the epidemic spread.

“I don’t think there is any mood to buy cars at the moment so there will be an impact (on sales),” Masayoshi Shirayanagi, Toyota’s operating officer, said at a news conference in Tokyo. “We are currently scrutinising every single component from our inventory to the possibility or the need for alternative plans for production.”

The comments came even as the world’s second largest carmaker raised its full net profit forecast by 9.3 per cent on improving profitability in the US market during the fiscal third quarter.

The upward revision, which did not take into account the coronavirus impact, raised its shares by 2.6 per cent.

Toyota said there was no issue with continuing production at plants outside of China for now, but executives at several carmakers and motor parts suppliers earlier warned that plants in Europe and the US were only weeks away from being forced to close due to disruptions to global manufacturing supply chains.

On Tuesday, Hyundai, the world’s fifth-biggest carmaker by sales, said it had to shut down all its car factories in South Korea after running out of components from China.

The Japanese carmaker, which has 12 plants in China for making cars and vehicle parts, expects to resume production in the country next week in accordance with guidelines from local authorities, but the plan could be reviewed if the coronavirus, which has killed more than 500 people, continues to spread.


Asian stocks rally as traders shake off virus fears

Hudson Lockett reports from Hong Kong

Asian shares rallied as traders shook off concerns over the continued spread of the deadly coronavirus and China announced that it would cut tariffs on US goods.

Hong Kong’s Hang Seng index rose 2.8 per cent on Thursday, putting the benchmark on track for its best one-day performance since early September. Tokyo’s Topix added 2.1 per cent, putting the index back into positive territory for 2020. The CSI 300, China’s gauge of Shanghai and Shenzhen-listed blue-chip stocks, added 1.4 per cent.

The move by investors to embrace risky assets came as China’s finance ministry said it would reduce tariffs imposed on some US goods in September from February 14. That has prompted optimism ahead of proposed talks between Washington and Beijing for a so-called phase two trade deal.

Julian Evans-Pritchard, a China economist at research firm Capital Economics, said concerns over the coronavirus outbreak may have played a role in China’s decision to cut tariffs. “Given everything else that’s going on they don’t want trade tensions to flare up again,” he said.

Read more here.


Taiwan bars international cruise ships

Kathrin Hille reports from Taipei:

Taiwan on Thursday barred all international cruise ships from entering its ports as the number of novel coronavirus infections among cruise passengers grows.

The move came as Taiwan reported two more confirmed cases, both Taiwanese who recently returned home from Wuhan. This brings Taiwan’s count of confirmed cases to 13.

Japan has said a further 10 people on a quarantined cruise ship in a Japanese port have tested positive for the virus, taking the total for the ship to 20.

Foreign nationals who have been to mainland China, Hong Kong and Macau in the past 14 days will be barred from entering Taiwan starting on February 7.


FT Analysis: Markets climbing back to the peaks

European stock markets are set to join the global push higher when trading opens in less than half an hour.

In his daily Market Forces newsletter, the FT’s Mike Mackenzie has been looking at why markets have climbed back towards record levels this week despite the growth scare triggered by the coronavirus outbreak:

With economic data this week highlighting some pick-up in global activity as the year began, risk-market sentiment has focused primarily on expectations of more monetary and fiscal stimulus that minimises the economic fallout from the virus. This was reinforced on Wednesday with Thailand’s central bank cutting interest rates by 25 basis points to a record low of 1 per cent, citing a rising economic risk from the epidemic. Singapore’s dollar slid as the country’s central bank said there was “sufficient room” within the currency’s trading band to accommodate easing of the exchange rate. But the big driver of risk appetite for now is China and the scale of Beijing’s fiscal and monetary response over the coming weeks.

But there remains a danger that equities are whistling past the graveyard at the moment. Even Wall Street and large-cap tech stocks are not immune to the headwinds that will blow from China.

FT subscribers can click here to receive Market Forces every day by email.


Summary of the latest developments

• There have now been 565 confirmed deaths from the virus, and 28,292 infections, according to data from Johns Hopkins University.

• China has announced it will halve punitive tariffs on some goods imported from the US.

• That has helped boost market sentiment. European stocks are set to open higher, following another positive session in Asia.

• Xu Zhangrun, a well-known Chinese academic, has criticised the government for its handling of the coronavirus, in a sign that the crisis is fuelling political dissent.


Emoticon European stocks hit record high

European shares rose to a record as the Stoxx 600 climbed 0.6 per cent in the early moments of trading.

The index, which tracks the region’s largest 600 companies, has risen 3.7 per cent so far this week and is on course for its best weekly performance since late 2016.

Global equities have risen sharply this week as investors brush off concerns over the virus’s economic impact. China has announced it would halve tariffs on some goods imported from the US in a move expected to further bolster market sentiment.

“Whether it’s the worst of the coronavirus fears being behind us, US politics or solid economic data, the risk-on mood in markets appears to be showing little sign of running out of steam yet,” said Craig Nicol, a strategist at Deutsche Bank.


Nintendo suffers disruption from outbreak

Kana Inagaki and Leo Lewis report from Tokyo:

Nintendo has warned that shipments of its best-selling Switch gaming console and Joy-Con controllers will be delayed due to disruptions to their supply chains in China caused by the coronavirus outbreak.

The Kyoto-based company said that the delay would also affect supplies of the accessory used in its surprise hit Ring Fit Adventure – a fitness game based around a motion-sensitive ring that has sold over 1.7m units since its launch in October.

Even before Thursday’s announcement, demand in Japan and Asia had been exceptionally strong and supplies of the device had been thin, forcing customers to sign up to long waiting lists and the company’s president to apologise for shortages at last week’s results announcement.

Nintendo statement:

We are closely monitoring the impact of the coronavirus and will work to deliver our products as soon as possible.

Nintendo used to make almost all of its Switch consoles in China through several contract manufacturers including Foxconn. But the company began producing some consoles in Vietnam from last summer after the US-China trade dispute put its reliance on China-based production in jeopardy.

China is also a large manufacturing base for Sony’s PlayStation and Microsoft’s Xbox consoles.


Emoticon Philippine central bank cuts rates, citing coronavirus

The Philippine central bank has cut interest rates, becoming the latest south-east Asian country to enact monetary easing in response to the novel coronavirus outbreak.

Meeting for the first time this year, the Bangko Sentral ng Pilipinas’ monetary board cut its benchmark interest rate by a quarter of a percentage point to 3.75 per cent.

The board said that prospects for global economic growth had weakened further amid geopolitical tensions, and noted that the virus could have an “adverse impact” on economic activity and market sentiment in coming months.

The Philippine economy is also contending with headwinds from an eruption of the Taal volcano and an outbreak of African swine fever, which has hurt the country’s farming and food sectors.

Thailand’s central bank on Wednesday cut its key lending rate by a quarter of a percentage point to 1 per cent, saying the country’s economy would expand at a much lower rate in 2020 than previously expected. Separately, Singapore’s monetary authority signalled that its currency could depreciate within its set band because of the outbreak.


China’s tariff pledge lifts shares to all-time high

Shares extended this week’s breathless rally after China said it would halve tariffs on some US imports on February 14, a move that should help cushion the economic fallout from the coronavirus outbreak.

Asian equities ended sharply higher, with the Hang Seng recording its best day since September, while the Stoxx 600 composite index of European stocks hit a record at the open. Thursday’s jump puts the composite index’s gains over the past four days at nearly 4 per cent, on track for its best week since late 2016.

Paul Donovan, a strategist at UBS, has explained why markets have welcomed the news.

This is viewed as positive for two reasons. Obviously this is a fiscal stimulus. The commitment to the phase one trade deal is also reassuring after problems in Sino-US relations over the coronavirus.


Analysts ‘struggle to rationalise’ the market

Rabobank’s rates strategists said they are “struggling to rationalise” the market’s reaction to the coronavirus.

Equities have climbed sharply this week and government bonds – a traditional haven asset in times of market stress – have sold off.

Rabobank believes the impact of the 2019-nCoV coronavirus is likely to be more significant than the Sars epidemic of 17 years ago, due to China’s economy being much bigger and the world being “a far more interconnected place”.

All of this means that we struggle to rationalise how yesterday saw another day of equities performing strongly while bonds sold off. We would expect the prospect and enacting of central bank stimulus in response to the virus to see equities perform but bonds go bid.

They said a “pretext” for selling bonds was probably provided by some strong US data and comments from the Federal Reserve’s Mary Daly that the virus was unlikely to have a material impact on the economy.


China’s property market stalls amid virus outbreak

Don Weinland in Beijing and George Hammond in Hong Kong report:

The coronavirus outbreak is delivering a painful blow to the $43tn Chinese property market as developers close sales centres and potential homebuyers delay the search for new flats.

The impact of the crisis on the market that some estimate accounts for 25 per cent of gross domestic product is threatening to weigh down China’s growth to 4 per cent in the first quarter, according to several analysts.

That would bring the rate close to the full-year low of 3.9 per cent experienced in 1990, in the wake of the Tiananmen Square massacre.

Larry Hu, head of China economics at Macquarie Capital, said:

After four years of upcycle, the property sector was already at a turning point even before coronavirus hit. Therefore, the risk is high for the property sector, which is the single most important part of the Chinese economy.

As early as January 26, soon after the first quarantines and shutdowns began, provinces such as Guangxi in southern China were postponing the sale of new homes. Many potential buyers have been prevented from going outside and viewing new homes or are too frightened to do so, according to real estate agents.

For more on this story, you can read Don and George’s full piece here.


Emoticon Authorities to begin house-to-house checks in Wuhan

Authorities in Wuhan are to begin house-by-house temperature checks on residents, the FT’s Tom Hancock reports. The Chinese city in Hubei province is the centre of the outbreak of coronavirus.

https://twitter.com/hancocktom/status/1225349144010772480?s=20


Virgin Atlantic suspends London-Shanghai flights until end of March

Virgin Atlantic has extended the suspension of its Heathrow-Shanghai flights until March 28.

A Virgin Atlantic spokesperson said on Thursday:

The health and safety of our customers and staff remains our absolute priority. We continue to monitor the coronavirus situation very carefully, including the latest guidance from the World Health Organization and the Foreign and Commonwealth Office, which on Tuesday issued new guidance to UK citizens to leave China if they are able to do so.

Virgin Atlantic urged passengers booked to travel to contact the company about refund options.


Wuhan to step up coronavirus checks

The Wuhan government announced on Wednesday that it would “strengthen” temperature checks, state media reported.

The authorities said residents found to have a fever but no other symptoms will stay at home and be monitored, reports Tom Hancock. If they have other symptoms, they will be quarantined at medical facilities.

Makeshift medical centres have been set up for isolating those suspected to be infected. The Wuhan Sports Centre has been turned into a 500-bed “hospital” which opened on Wednesday, state media reported.


Emoticon China criticises UK’s travel warning

China’s ambassador to London has criticised the British government’s decision to advise against travel to the country, as he defended Beijing’s response to the outbreak of coronavirus.

Liu Xiaoming said there had been “over reactions” to the disease from some countries, and that he did not think the Foreign Office’s advice to British citizens to leave China if at all possible was “a good idea”.

“We believe the epidemic is controllable, preventable and curable. We ask the British side to take an objective cool-headed approach,” Mr Liu said in a press conference. “Life is still normal in most parts of China.”

The ambassador offered a lengthy defence of China’s policy response to the outbreak. He said Beijing is “fully confident” in beating the virus, and that the international community should support his country’s efforts.

“The measures taken by China are effective, and there should be no panic and no overaction,” he said, adding that the seasonal flu outbreak in North America this winter is more serious than this coronavirus.

“China is doing its best to safeguard global public health,” he said.


China’s ambassador to UK plays down long-term impact of virus

China’s ambassador to the UK said his country’s economy is “highly resilient” as he played down the economic impact of the corona virus outbreak.

Liu Xiaoming said the epidemic is having a “severe impact” on the services sector, but added he expects this to be temporary. Industries including transport, tourism and hospitality are among the worst affected, the ambassador said.

The assurances tallied with the wider theme of the press conference, which offered a detailed defence of the government’s response to a virus which has killed more than 500 and infected some 28,000.

“China is doing its best to safeguard global public health” and is determined “to take up its responsibilities as a reliable global player,” Mr Liu said. “The measures taken by China are effective and there should be no panic and no overreaction.”


Hong Kong confirms 22nd case of deadly virus

The semi-autonomous Chinese territory has reported its 22nd case of the coronavirus, a 55-year-old woman whose husband has also been diagnosed.

The couple returned from a short trip to Japan on February 1.

The woman previously went to work in Dongguan, a city in mainland China’s Guangdong province, which borders Hong Kong. But she had not been there since January 17.

Dongguan is more than 1,000 kilometers from Wuhan, where the virus broke out. Guangdong province has the second highest number of cases in mainland China after Hebei, the province where Wuhan is located.


Final US evacuation flights to leave Wuhan

Tom Hancock reports:

The final US flights evacuating Americans from Wuhan are set to leave on Thursday as authorities make a last push to remove citizens from the city at the heart of the outbreak.

A state department email seen by the FT said “there are no plans for additional US evacuation flights from Wuhan” following this evening’s departures.

Evacuees were urged to get themselves to Wuhan Tianhe International Airport before 9pm local time tonight and to bring food and water with them in preparation for a lengthy customs and screening process.

The planes will stop off in Vancouver to drop off Canadian citizens before travelling onwards to the US. Upon their return, evacuees will be subject to 14 days of quarantine.

They will be charged $1,000 “at some future date” to cover the cost of the evacuation.

The State Department said it would “continue to monitor the situation” and “work diligently” to assist US citizens who remain in the Wuhan area.


Luxury brands Estée Lauder and Tapestry warn of hit from outbreak

Luxury retailers have warned of the hit to their businesses from the outbreak of the virus, with Estée Lauder cutting its profit forecast for the year and Tapestry cautioning on its guidance.

Estée, the luxury skincare and cosmetics group behind names like Mac and La Mer, cautioned that “global travel retail, localities most affected by the virus outbreak and destination markets favoured by tourists are expected to experience the greatest negative impact in the coming months”. In recent years, the New York-based company has benefited from the travel segment, which includes sales in airport duty-free stores and department stores that are popular with tourists like Harrods.

Estée now expects adjusted earnings of $5.60 to $5.70 per share for the full year, down from its previous outlook for adjusted earnings between $5.85 to $5.93. That was also shy of Wall Street expectations for $5.94. “We will be ready to return to our growth momentum as the global coronavirus outbreak is resolved,” chief executive Fabrizio Freda said.

Meanwhile, Tapestry, the group behind luxury handbags and accessories brands like Kate Spade and Coach, said “the escalating coronavirus outbreak is now significantly impacting our business in China, resulting in the closure of the majority of our stores on the Mainland”.

The New York-based company warned that its second-half sales and earnings per share could see a hit of about $200m to $250m and between 35 cents to 45 cents per share respectively. It warned that if the situation were to deteriorate and affect demand outside of China, the impact could be worse.

Tapestry however restated the importance of Chinese consumer to its business, “we believe in the resilience of the Chinese people and our view that China represents a significant opportunity for our brands is unchanged”.


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Fiat Chrysler on brink of closing first European plant due to virus

One of Fiat Chrysler’s European facilities is as little as a fortnight away from halting production because of problems sourcing Chinese parts, the company warned, in the first prospective European car plant shutdown resulting from the coronavirus outbreak.

Chief executive Mike Manley told our motor industry correspondent Peter Campbell four suppliers in China had been affected by the coronavirus shutdown, with one “critical” partsmaker putting European production at risk.

“We’ve got one high risk supply at the moment that we have identified,” Mr Manley told the Financial Times.

Within two to four weeks the company will know “whether supply will be halted for one of our [European] plants”, he added.

The other three component makers “will also become critical” if the Chinese closures remain in force throughout February, he added.

A dedicated team within FCA has been directed to monitor the company’s parts and any potential production impact, including seeking alternative sourcing, something that takes time because new components have to be certified and registered, he added.


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Third UK case of coronavirus confirmed

Sarah Neville, the FT’s Global Pharmaceuticals Editor, writes:

A third person in the UK has been diagnosed as suffering from the coronavirus, it has emerged, after picking up the infection overseas.

Chris Whitty, chief medical officer for England, said:

A further patient has tested positive for coronavirus bringing the total number of cases in the UK to three. The individual did not acquire this in the UK.

The patient had been transferred to a specialist NHS centre and “robust infection control measures” were being used to prevent any further spread of the virus, Professor Whitty added.

The National Health Service was “well prepared to manage these cases and we are now working quickly to identify any contacts the patient has had”, he said.

Dr Michael Head, senior research fellow in global health at the University of Southampton, said the outbreak was “at a very important point, both globally and here in the UK”.

At this stage the infection appeared to have been imported, rather than acquired through human-to-human transmission within the UK.

Outside of China, there has been limited human transmission of the coronavirus, which is good news in terms of potentially being able to contain the international spread.


Wall Street set to follow European shares higher

Stock markets have kicked higher, extending a rally into a fourth session as Beijing seeks to cushion the economic fallout from the virus.

China has announced it will halve tariffs on some US imports on February 14, in an attempt to boost market confidence as it implements a “phase one” trade deal with the Trump administration.

The move spurred a fresh rally on global stock markets with Asian bourses gaining and the Stoxx Europe 600 hitting an intraday record. Futures trade pointed to a rise of 0.3 per cent for the S&P 500 when Wall Street opens within the hour.

This week’s rally has left the MSCI World index, a measure of global equity markets, up 3.1 per cent over the past four sessions and on course for its best weekly performance since June last year.


China cuts off Kazakhstan’s mail

Henry Foy, Moscow bureau chief, reports:

China has suspended postal deliveries to Kazakhstan, cutting the Central Asian country off from most of Asia’s mail services.

While noting that the World Health Organization says it is impossible to contract coronavirus through postal items, KazPost said on Thursday that “at the initiative of the Chinese postal administration, postal exchange… between China and Kazakhstan was cancelled.”

The suspension affects all post between Kazakhstan and countries whose post travels to the country via China, which include Bangladesh, Brunei, Bhutan, Burma, Cambodia, Malaysia, Mongolia, Nepal, Laos, North Korea, Thailand, Sri Lanka, the Philippines and Taiwan.


Malaysia reports first person-to-person Coronavirus transmission

Malaysia has confirmed its first case of the virus between people who did not travel to China, according to news agencies and multiple local media reports.

The reports say that the sister of a 41 year old Malaysian man who traveled to Singapore last month has tested positive for Coronavirus.

The man attended a meeting at the Grand Hyatt hotel in Singapore in mid January, alongside delegates from mainland China and at least one from Wuhan.

“We are calling this the first Malaysian-transmitted local case,” Malaysian health minister Dzulkefly Ahmad said in a statement reported by Reuters and multiple local news outlets.


Taiwan cases rise to 16

Kathrin Hille reports from Taipei:

Taiwan reported three more confirmed novel coronavirus infections on Thursday night, bringing its total to 16.

None of the three patients has a recent travel history to mainland China, Taiwan’s Epidemic Management Centre said.

Two are a couple who transited in Hong Kong International Airport on a holiday trip to Italy, and the third recently traveled to Macau.


Total number of Singapore cases reaches 30

Stefania Palma reports from Singapore:

Singapore reports two additional confirmed cases — both local citizens — taking the total to 30.

They include a 41 year old man who has no recent travel history to China and does not appear to have come into contact with previously confirmed cases, said the ministry of health.

The second case is a 27 year old man who attended a business meeting at the Grand Hyatt Singapore that is linked to confirmed cases in Malaysia and South Korea. Individuals from China, including from Hubei, joined the meeting.

Out of Singapore’s confirmed cases, one is in critical condition and another needs additional oxygen support. One patient has been discharged while the others are stable or improving.

Test results for 147 suspect cases are still pending.


Hong Kong confirms more cases

The territory bordering mainland China has confirmed another two cases of Coronavirus, taking the total to 24.

Hong Kong has stopped short of confirming local transmissions of the virus, despite such person-to-person infection having been discovered in the US, Thailand, Malaysia, Vietnam and Singapore.

The health authority of Hong Kong has however published this graphic showing the number of cases it suspects may not have been imported from China.


US Treasury secretary warns of hit to economy from virus

US Treasury Steven Mnuchin said the American government had lowered its forecast for economic growth as a result of the spread of coronavirus coupled with the ongoing crisis surrounding aerospace group Boeing.

Speaking on Fox Business today Mr Mnuchin said that while it was “too early to tell” the extent of the drag on the US economy from the virus, there would definitely be some form of hit.

He said the malaise at aircraft maker Boeing would also be seen in growth numbers. The Chicago-based manufacturer last week placed the total cost of the crisis that has seen its 737 Max model grounded following crashes at $18.6bn.

“I think our projections have been reduced, because of Boeing and other impacts, so it will be lower,” Mr Mnuchin said. “There’s no question that the virus will have some impact on global growth and some impact on the US.”

“I think we’ll have a much better idea in another week or two as we monitor how the virus spreads,” he added.


Coronavirus whistleblower has died – state media

Yuan Yang in Beijing

One of the eight whistleblowers who first warned of the coronavirus has died from the disease, state media reported.

Li Wenliang, a Chinese doctor who was among those to first warn of the disease and then was punished by police, died on Thursday in Wuhan, the city at the centre of the outbreak, state media outlet the Global Times said. He was 33 years old.

The hashtag “The Wuhan government owes Li Wenliang an apology” has been viewed 180m times on the Chinese social media platform Weibo.


US stocks open to record highs

Wall Street jumped to new intraday record highs after the opening bell, mirroring gains in global stocks.

The S&P 500 gained as much as 0.4 per cent and was recently up 0.1 per cent, as news that China would halve tariffs on about $75bn in US goods supported investor sentiment. The Dow Jones Industrial Average was down 0.1 per cent.

The benchmark S&P 500 and Nasdaq Composite, which rose 0.2 per cent on Thursday morning in New York, each closed at all-time highs a day earlier. All three major indices are searching for their fourth consecutive day of gains.

In Europe, the Stoxx 600 was up 0.3 per cent.


Tyson Foods restarts some operations in China

Tyson Foods said it is closely monitoring news on the outbreak and has “successfully restarted” some of its operations in China.

The Arkansas-based company has been working with the Chinese government and is assessing what the virus may mean for the business and “preparing for the possibility of any impact in China”.

The largest US meat company has seen increased demand for its pork products in China after the Asian nation raced to replace meat supplies lost to its African swine fever epidemic. The company reported a 600 per cent year-on-year increase in the first quarter.

Moreover, the company noted the recent trade truce has improved access to global markets. “An important benefit of
the deal in China is inclusion of more protein eligible for shipment,” they said, though they added tariffs continue to put the company at a pricing disdvantage in the Chinese market.

However it is unclear how much the coronavirus could disrupt trade and demand. The World Health Organization said it does not recommend limiting trade and movement and warned that restrictions can cause more harm than good by hindering information sharing and medical supply chains.


China’s ambassador to the UK urges global solidarity in virus fight

Clive Cookson in London

Liu Xiaoming, Chinese ambassador to the UK, held an unusual press conference on Thursday to urge global solidarity in the fight against coronavirus.

Speaking in his London embassy’s marble-floored briefing room, decorated with red Chinese lanterns, Mr Liu determinedly emphasised the positive and downplayed criticisms of his country’s response to the epidemic.

“With broad support from the international community we will beat the virus,” he said – going on to quoted a Chinese saying: “One people of one mind can move Mount Tai.”

While emphasising the seriousness with which his government is taking the epidemic, Mr Liu pointed out the mortality rate from the new virus was “very low” at 2.1 per cent, compared with Ebola (40 per cent) and Sars (10 per cent). He then cited the latest statistics on influenza in the US, where 19m people have been ill and 10,000 have died of flu this season, adding “This is more serious than coronavirus.”

“The number of cured coronavirus patients is rising and we are fully confident in beating the virus,” he said.

Mr Liu conceded that “over-reactions among the public” to the epidemic had caused some “insulting and discriminatory remarks targeting the overseas Chinese community” in the UK and elsewhere. But he said the overwhelming feeling was supportive of China. To prove the point, he played a sentimental video of schoolchildren in Belfast singing songs of solidarity in the face of the epidemic.

At the press conference Mr Liu was asked about reports of Boris Johnson’s father Stanley claiming that Chinese officials were “concerned” the prime minister has failed to send a personal message of condolence in the wake of the coronavirus outbreak. Mr Liu did not respond directly but he insisted that Mr Johnson enjoyed good relations with Xi Jinping, China’s president.

“At the Chinese New Year reception at Number 10, we had a good conversation,” Mr Liu said. “I conveyed greetings from our president and prime minister, and he told me he is still committed to the golden era of British-Chinese relations. The channel of communications between the British and Chinese governments is very good.”

The ambassador said he had asked the UK foreign office to review its advice to Britons to leave China. “We did tell them that overreaction is not helpful.”


Third UK coronavirus case did not catch virus in China

Global pharmaceuticals correspondent Sarah Neville reports:

The third person in the UK to be diagnosed with the virus did not catch it in China, but elsewhere in Asia, it has emerged.

The development has led to fresh advice being issued to the NHS, with doctors being told to consider testing for coronavirus if a patient who has travelled from a wider number of Asian countries develops symptoms. Similarly, if people who have been in those countries fall ill at home they will be advised to self-isolate and call the telephone advice service 111, or seek other medical help.

The health department did not immediately release the list of additional countries but officials said the fresh advice was a prudent attempt to get ahead of the epidemiology. Meanwhile the new case was in the process of being transferred to a highly secure NHS unit, it was disclosed.

This marks the latest case of the virus to be confirmed in people who did not visit mainland China. Earlier on Wednesday, Malaysia’s health ministry reported a case of a local woman who had caught the virus from her brother, who is believed to have become infected at a conference in Singapore where mainland Chinese delegates were present.


Fed’s Kaplan says US growth outlook would be stronger were it not for the outbreak

Dallas Federal Reserve president Robert Kaplan has said he expects “solid” US growth in 2020 and that his outlook would be stronger were it not for the coronavirus outbreak and Boeing crisis.

Mr Kaplan said he expects the US economy to grow between 2 to 2.25 per cent this year, speaking at an event in Dallas, according to newswires.

“If it weren’t for the coronavirus, which I’ll talk about in a moment, and the Boeing situation, which we think alone will in
the first and second quarter take as much as four tenths of a percentage point off GDP growth, I’d probably have even a firmer forecast,” he said.

Mr Kaplan, a voting member of the Federal Reserve’s monetary policy setting committee, added it is too soon to say what the fallout from the virus would be but that he didn’t expect it to differ from the past.

With respect to the impact on crude oil, he noted US production growth* will decline further in 2020 and that the virus “is yet another wild card that just limits China consumption obviously”.

*This post has been amended to clarify that Mr Kaplan was referring to the growth of oil production.


CDC begins shipping coronavirus test kits to labs

US health officials have started distributing coronavirus test kits to domestic and international labs.

The Centers for Disease Control and Prevention said test kits developed by the agency began shipping yesterday and can deliver results in four hours from the time a sample is processed.

The kits were designed to be used with existing testing instruments for the seasonal flu, and each one can handle tests for 700 to 800 patient specimens. About 200 kits will be sent to US labs and a similar amount to international labs initially.

“Our goal is early detection of new cases and to prevent further spread of the coronavirus,” said CDC director Dr Robert R. Redfield. “Distribution of these diagnostic tests to state laboratories, US government partners and more broadly to the global public health community will accelerate efforts to confront this evolving global public health challenge.”

The CDC is distributing the test kits under an emergency authorisation from the Food and Drug Administration, which has yet to formally approve them.


Number of new coronavirus cases in China drops

Peter Wells in New York and Clive Cookson in London

The most recent data on the coronavirus outbreak has provided some respite for officials and the public, with Wednesday being the first day the number of newly-diagnosed cases in China fell.

The total on the mainland rose to 28,256 today from 24,554 on Wednesday, according to World Health Organization data. Figures from the Johns Hopkins Center for Systems Science and Engineering tell a similar story, with the increase of about 3,700 new cases comparing with a rise by 4,000 cases in the previous 24 hours.

The rate of increase of new cases has slowed, both in China and other locations. At the start of Lunar New Year on January 25, the number of cases doubled from the previous day, while in two of the past three days the rate has dropped into the mid-teens.

Officials were cautious, though. Mike Ryan, executive director at the WHO, said today at a briefing: “Although we are pleased that this is the first time the overall number of new confirmed cases has dropped, we need to be very careful about making predictions.”

Dr Ryan pointed out there had been a constant state of increases in Hubei – the Chinese province whose capital, Wuhan, is at the centre of the outbreak – but there has not been the same acceleration in other provinces. While the situation appears relatively stable outside Wuhan, cycles of transmission may rise in coming days, he added.


DB outlines economic impact of outbreak on global economy

The coronavirus outbreak will shave 0.5 percentage points off global growth in the first quarter of the year, according to Deutsche Bank.

China is by far expected to see the biggest drag on GDP growth with economists now forecasting GDP of 4.6 per cent in the first three months of the year, down from 6.1 per cent previously.

“The largest impacts are on China and its closest trading partners in Asia. Germany and portions of the Rest of World region
(most notably Latin America and Australia) which have above average trade shares with China also show larger impacts,” notes Peter Hooper, economist at Deutsche Bank.

He added: “The working assumption underlying our regional analyses, at this point, is that with the spread of the virus in China having decelerated, and actually begun to slow in recent days, the negative impact of the outbreak will peak this month. We also assume that major outbreaks outside of China will be avoided.”


Doctor who warned on coronavirus in critical condition

James Kynge in Hong Kong and Nian Liu in Beijing report:

A Chinese doctor who became a hero to millions for raising the alarm over the coronavirus epidemic was in critical condition, according to medical officials, after earlier reports that he had died sparked an outpouring of grief and anger.

A post from the Central Hospital of Wuhan on Weibo, the Twitter-like social media platform, said Li Wenliang, 34, was in critical condition but was “being saved”. The statement came a few hours after multiple Chinese state media outlets, including the Global Times and CGTN, the state television station, reported that Dr Li had died.

Dr Li shot to fame after December 30, when he warned fellow medics in an online chat group that seven new pneumonia cases had been identified. Chinese internet users shared screenshots of the chat group discussion. By that evening, the hashtag “Wuhan Sars” was trending on Weibo before censors removed it.

Chinese authorities accused him of “rumour-mongering” as they set about covering up the extent of the spread of the deadly virus and forced him to retract his statement.

Following the reports of his death, a tumult of supporters went online to call for authorities in Wuhan, the city at the centre of China’s epidemic, to apologise to Dr Li for calling him a rumour-monger rather than heeding his words. “The person who brought firewood for everyone, had frozen to death in the wind and snow,” said one user.

The hashtag “The Wuhan government owes Li Wenliang an apology” had been viewed 180m times on the Chinese social media platform Weibo by late Thursday before it was blocked by government censors.


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Li Wenliang, doctor who warned on coronavirus, dies

Tom Hancock reports:

A Chinese doctor who warned early on of the risks of coronavirus has died, a hospital where he had previously been reported in critical condition, has said.

Wuhan’s central hospital said in a post on Weibo:

During the fight against the pneumonia epidemic caused by the novel coronavirus, Dr Li Wenliang unfortunately became infected. He died at 2.58 on February 7 2020. We deeply mourn and regret this.

The post that follows directly below this one has more information on Dr Li’s story.


Two people in Saudi Arabia under quarantine

Ahmed Alomran reports from Riyadh:

The Saudi health ministry has said two Indian sisters who arrived in the Kingdom are in quarantine and under monitoring. The two sisters, who did not show symptoms of the disease, left China on January 12 and spent around 21 days in India before traveling to Saudi Arabia on February 3, the ministry said in a statement.

The Saudi government announced earlier on Thursday a China travel ban for all the kingdom’s citizens and residents.


Gilead risks patent battle over potential drug to treat coronavirus

Hannah Kuchler, US pharma and biotech correspondent, writes:

Chinese scientists have already applied for patents for remdesivir to try to treat the novel coronavirus, as the potential drug already patented by US biotech Gilead Sciences enters clinical trials in China.

The researchers including scientists at the Wuhan Institute of Virology said they applied for Chinese invention patents on January 21 and planned to enter other countries using them.

Last week, Gilead said it would work with global health authorities to provide the drug candidate, which was initially designed to target Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS).

Gilead said it invented remdesivir and has patented it in the US, China and other parts of the world. It filed extra patent applications to use it against coronaviruses globally, including in China, in 2016.

The first patients in the trial received medication on Thursday in China, according to the Xinhua News Agency, a far faster pace than usual because of the outbreak.

Daniel O’Day, Gilead’s chief executive, said on the group’s earnings call on Tuesday it is investing “pretty heavily” in scaling up its manufacturing for the potential drug. “Our team is working night and day, it’s very impressive to watch this team in the last couple of weeks, ramping up to the extent that we can,” he said.

But he added that it was important to remember that so far, there was no evidence that the product actually works. All there has been is one case, reported in the New England Journal of Medicine, of a patient with coronavirus responding to remdesivir.


Art Basel cancels Hong Kong leg of the annual fair

The annual Hong Kong leg of one of the world’s most prominent art fairs has been cancelled, owing to the outbreak and spread of the coronavirus.

Art Basel said late on Thursday, New York time, it had “no option” but to cancelled its Hong Kong show, which was due to take place in the territory from March 19 to 21.

The organisation said factors stemming from the virus outbreak including the fundamental safety of workers and attendees of the fair, logistical challenges of transporting artwork to the show and setting up the exhibits, and the increasing difficulties around international air travel were key reasons behind the “difficult” decision.

The coronavirus has spread from the Chinese city of Wuhan all over the world. The latest data from authorities count 24 confirmed cases of the disease in Hong Kong, which shares a land border with the Chinese mainland. Although that is fewer cases than other neighbouring Asian countries, like Singapore and Japan, a number of airlines have suspended routes to Hong Kong.

“We explored every other possible option before doing so, gathering advice and perspectives from many gallerists, collectors, partners and internal experts,” Marc Spiegler, global director of Art Basel, said in a statement.

Art Basel also takes place in the eponymous Swiss city and Miami Beach, Florida. The next Art Basel Hong Kong is set for March 25 to 27 next year.


AI start-up develops shortlist of molecules that could potentially treat coronavirus

Hannah Kuchler, FT pharma and biotech correspondent, reports:

Insilico Medicine, a start-up specialising in using artificial intelligence for drug discovery, has come up with a shortlist of potential molecules that could be used to target the protein behind the novel coronavirus strain that has caused the outbreak.

Alex Zhavoronkov, chief executive of Insilico, said the company has posted the AI-generated molecules online for other scientists to evaluate and consider creating and testing. Insilico will also create and test several of the compounds to see if they could work.

This is the earliest stage in the process of discovering a drug which could treat the coronavirus – and would need potentially months or years more research before they could be tested in humans. So far, the best prospects for rapidly developing a treatment are drugs that have been shown to work against other coronaviruses, such as Gilead’s remdesivir, or HIV, such as Abbvie’s HIV drug Aluvia. But even they need to be proven in clinical trials.

Insilico is one of a new generation of start-ups hoping to harness AI’s ability to sort through databases of potential drugs and rapidly model what might work for a particular disease. They hope to cut the time – and therefore the high cost – of drug development.