Topline: A cruise ship that was turned away from several ports in Asia over coronavirus fears—despite no cases onboard—will now dock in Cambodia after days of uncertainty and mounting anxiety among passengers.
The Holland America Line’s MS Westerdam was banned from docking by Thailand earlier this week, over concerns about coronavirus on the ship. Holland America Line, which is owned by Carnival Cruise, says nobody onboard has reported symptoms.
It will now dock in Sihanoukville in Cambodia on Thursday, where passengers will disembark over a few day and will be transported to the capital, Phnom Penh, and flown home. Holland America Line says it will pay for the flight sand refund passengers their entire trip.
The MS Westerdam had planned to disembark its passengers in Thailand after Japan, The Philippines and Guam turned away the cruise ship. The Thai government on Tuesday offered fuel, food, and medicine to the cruise ship.
Stephen Hansen and his wife are two of the 1,500 passengers stuck on the vessel, which sailed from Hong Kong on February 1st and had been scheduled to end its cruise in Japan on February 15.
Hansen told Forbes: “While I can understand that countries want to protect their own citizens first before helping us their decisions to turn us away are based more on misinformation and fear than facts.”
Holland America said in a statement on Wednesday: “All approvals have been received and we are extremely grateful to the Cambodian authorities for their support…All guests on board are healthy and despite erroneous reports there are no known or suspected cases of coronavirus on board, nor have their ever been.”
Passengers had been calling for political intervention, with Hansen saying that the countries’ decision to reject the vessel was down to “misinformation and fear,” rather than facts.
Key background: Cruise ships have become an unlikely flashpoint in the battle to stop the international spread of the coronavirus. The British-owned Diamond Princess cruise was quarantined in Tokyo last Monday, with 174 out of the 3,700 passengers on board now ill with the pneumonia-like illness. Around 3,600 passengers and crew were held aboard the World Dream cruise ship for four days in Hong Kong over concerns the ship staff had contracted the virus from infected passengers on an earlier cruise. Cruise Lines International Association, the industry’s trade organization, announced last week its members would bar passengers who had visited China, Hong Kong, or Macau, 14 days before their cruise, from boarding.
News peg: Coronavirus, this week renamed Covid-19, has now killed more than 1,000 people and infected at least 42,000 more. The outbreak is concentrated in mainland China, after the virus was first detected in patients who are thought to have visited a Wuhan market in December. Airlines have also been badly disrupted, with some international carriers suspended their flights to and from China, and a number of international companies and manufacturers have been impacted by the Chinese government’s move to extend the Lunar new year holiday in a bid to restrict the spread of the virus. Tens of millions were placed under lockdown by Chinese health authorities in cities like Wuhan that have seen the highest number of reported cases.
I am a breaking news reporter for Forbes in London, covering Europe and the U.S. Previously I was a news reporter for HuffPost UK, the Press Association and a night reporter at the Guardian. I studied Social Anthropology at the London School of Economics, where I was a writer and editor for one of the university’s global affairs magazines, the London Globalist. That led me to Goldsmiths, University of London, where I completed my M.A. in Journalism. Got a story? Get in touch at firstname.lastname@example.org, or follow me on Twitter @bissieness. I look forward to hearing from you.
Zhou Yuxiang was not in the mood for festivities during China’s Lunar New Year holiday this year. The 30-year-old CEO of Shanghai-based software startup Black Lake Technologies had to figure out how to manage his company amid the country’s deadly coronavirus outbreak. Working from home to comply with local quarantine rules has lowered productivity, while expenses remained high as he still needs to pay rent even when no one is using the office.
What’s more, Zhou says, clients are slower to take on new contracts as factories remain shut and production is delayed, hurting his otherwise fast growth.
“This epidemic caused production suspension for a considerable number of factory clients,” he says, who counts 300 factory owners as customers of his cloud-based management software. “Unpredictability on when factories could resume production has increased uncertainty for our first quarter growth.”
As the deadly virus, temporarily called 2019-nCoV, shows no sign of slowing, China’s vast business scene is taking a hit. While some companies, including Zhou’s, hope to recoup any losses before the year’s end, others are suffering a much more devastating blow.
This is because the epidemic’s economic damage is far and wide. It is believed to be more contagious than the 2003 Severe Acute Respiratory Syndrome (SARS) epidemic, causing the Chinese government to impose nationwide mall closures, movie cancellations and factory shutdowns to prevent the disease’s further spread. As manufacturing and business activities cease, first quarter GDP growth will plummet to 3.8%—which equals to $62 billion in lost growth—and drag full-year GDP growth below 6% to 5.4%, according to UBS economist Wang Tao.
Sectors that are hardest hit include catering, entertainment, hospitality, retail and transportation. These businesses tend to have heavy inventory or a lot of expenses, but they can’t generate any meaningful revenue when people stay indoors.
Jia Guolong, founder of popular restaurant chain Xi Bei, told local media this week that his company only had enough cash for the next three months. He still needs to pay rent and salary to more than 20,000 employees, even when his restaurants are largely empty. To preserve cash, Hong Kong’s flag carrier, Cathay Pacific has asked its 27,000 employees to take three weeks of unpaid leave, warning that the condition is as grave as the 2009 global financial crisis. And fast-food operator Yum China is expecting negative impact on 2020 full-year sales and profit, after temporarily shutting down 30% of its stores in China.
While these larger businesses may eventually have the resources to weather through, smaller startups could experience a life-and-death moment. Zhang Yi, founder of Guangzhou-based consultancy iiMedia Research, says he won’t be surprised if a wave of bankruptcies occur. And Wang Ran, founder of Beijing-based investment firm CEC Capital, urged startups to do whatever they can to survive.
“Downsize if you need to, relocate if you need to and lay off people if you need to,” Wang wrote in a recent blog post. “Only those who lived through this can see spring, and have a future.”
Beijing has put out rescue measures. The country’s central bank, the People’s Bank of China, announced on February 2 that it would pump $174 billion worth of liquidity into the markets to help cushion the impact. Local governments have called for rent deductions and more flexible salary arrangements, with the Shanghai municipal government promising tax and insurance refunds to employers who don’t engage in layoffs.
But analysts say business survival may ultimately depend on whether the virus can be contained. Since originating in the central Chinese city of Wuhan in December, it has spread across the country, infecting more than 28,000 people and killing over 500. There are now coronavirus cases around the world, including Japan, Thailand, Germany, the United States and the United Arab Emirates. The World Health Organization declared the outbreak a global health emergency and dozens of nations, including Italy, Singapore and the U.S., have placed travel restrictions from China.
“The longer this drags on, the bigger the damage,” iiMedia Research’s Zhang says. “If it lasts for another month, then it would be unbearable for any business.”
Startups are doing what they can to minimize damage. Black Lake’s Zhou is offering discounted services, especially to clients who are based in the most affected areas. Zhou Wenyu (not related to Zhou Yuxiang), founder of Shaoxing-based software startup Youshupai, is slowing down marketing activities and transferring its first quarter sales goal to the second quarter. And Joanne Tang, founder of travel and marketing agency Infinite Luxury, says she is diversifying to other Asian markets while reminding overseas-based clients not to reduce efforts in China.
“For sure, we are in a challenging time,” Tang says. “We have to monitor how it goes, but we won’t be standing still and just wait until this is over.”
I am a Beijing-based writer covering China’s technology sector. I contribute to Forbes, and previously I freelanced for SCMP and Nikkei. Prior to Beijing, I spent six months as an intern at TIME magazine’s Hong Kong office. I am a graduate of the Medill School of Journalism, Northwestern University. Email: email@example.com Twitter: @yueyueyuewang
CNBC’s Eunice Yoon reports on how the coronavirus outbreak is expected to take a serious toll on China’s economy. Expect supply disruptions as China takes measures to contain an ongoing coronavirus outbreak, says REYL Singapore’s Daryl Liew. “The sharp action taken by the Chinese government to basically delay workers going back to work is definitely going to cause some supply disruptions,” Liew, who is chief investment officer at REYL Singapore, told CNBC’s “Street Signs” on Thursday. With the virus infecting at least 7,700 and killing 170 in China, authorities have taken measures to curb the disease’s spread. At least three provinces have declared that businesses, other than some essential industries, are barred from resuming work before Feb. 10. In Hubei province, where the majority of cases have been found, resumption of local business has been delayed till at least Feb. 14. A “big question mark” remains over how long the disruptions could last, Liew said, as it depends on whether the situation can be contained. That comes as manufacturing numbers were showing “some normalization,” he added. “It’s a bit of a lagging indicator but the December ISM numbers have all been broadly positive, especially for Asian economies … which suggest essentially that global trade is normalizing. It’s not bouncing back significantly but it is rebounding,” Liew said, adding that that has translated to better manufacturing numbers. “The current virus … and the extended shutdown in China will definitely put a crimp to that,” Liew said. Potential impact on US businesses The outbreak has sent tremors across markets in Asia and beyond in recent days, as investor concerns about the potential economic impact grow. “We’re concerned that there could start to be … some overall impact on the Chinese economy which could lend itself, from a sentiment perspective, to greater concerns … for the global economy,” Shannon Saccocia, chief investment officer at Boston Private, told CNBC on Thursday. That could spillover into the performance of U.S. businesses at a time when the “strain of lower production” is being felt stateside, Saccocia said. “If we start to see that upended by the fact that factories aren’t opening and … we’re not able to get the components that we need from the Chinese economy, you know, that could … certainly slow any sort of manufacturing reacceleration that we were hoping for in the first two quarters of 2020,” she said. The Chinese city of Wuhan, the capital of Hubei province, is the epicenter of the outbreak, and authorities have placed multiple cities in the province under partial or complete lockdown. Wuhan and the surrounding region of Hefei and Jiangsu are major manufacturing hubs that work with American firms. But they have also been shut down due to the virus outbreak. “As an investor, you need to understand … where the supply chain starts and ends and factor in to your expectations … for those companies,” Saccocia said, though she acknowledged that it’s “a little early” to “paint the picture that half of the year is going to be meaningfully lower from a growth standpoint due to this virus.” For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://www.cnbc.com/pro/?__source=yo… » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC#CNBC#CNBC TV
The deadly coronavirus discovered in China has traveled by air to some 25 other countries. It’s no wonder a lot of those countries are restricting flights and handing airlines their worst event-driven financial hit since 2003.
More than 25,000 flights were canceled in the first full week of February, according to data from air travel intelligence firm OAG. Thirty airlines have suspended services to China, reaching a combined 8,000 seats per week, OAG says. The virus, discovered in the central Chinese city of Wuhan in December, has sickened more than 40,000 people and killed over 900 as of February 10.
Airlines will feel a financial pinch that reminds them of the deadly outbreak of Severe Acute Respiratory Syndrome (SARS) that started in China in 2003, aviation experts predict. They say today’s suspensions are already as bad as the SARS peak from March through June 2003. They attribute that to the coronavirus’s quick, widely-reported spread and the equally fast moves around the world to ban travel-related activity—a result of everyone learning from the SARS crisis.
“The levels of cancelations that we are seeing are unprecedented and exceed any other pandemic event that we can recall,” says Mayur Patel, head of Asia at OAG. He attributes the pileup of cancelations to “swift action from regulators and airlines.”
The SARS epidemic hollowed out 8% of annual revenue per kilometer for Asia Pacific airlines and cost them $6 billion in revenues due to lost business, Singapore’s Business Times reports. That epidemic hit Hong Kong, Taiwan and Singapore as well as major mainland Chinese cities.
Losses expected from the coronavirus-linked cancelations are “broadly consistent with the SARS level” when China-headquartered airlines alone slashed at least 50% of flights, says Eric Lin, aviation analyst in Hong Kong with the investment bank UBS. He anticipates industry losses at least in the first quarter this year.
Mainland Chinese airlines have felt most of the impact this year to date, Lin says. Among those are state-owned carriers such as Air China and China Southern Airlines. Privately-owned peers including Hainan Airlines have cut back, too.
Taiwan’s airlines and Hong Kong-based Cathay Pacific will be especially hit hard because of their dependence on China flights, Lin forecasts. Going farther out, United Airlines and British Airways have both reduced China flights.
A spokesperson for Taiwan-based EVA Airways said Friday the carrier planned to scale back China flights through April and that it was “monitoring the development of coronavirus outbreak and passengers’ travel demand to adjust route network and flight frequency.” Taiwanese peer China Airlines set up a Q&A website for worried passengers on February 4 and said it would refund fares booked directly through the company.
Losses this year could add up further if the virus spreads more outside China, Moody’s Investors Service said in a January 31 research note, though a dip in oil prices might offset that. “Carriers with weaker business models or liquidity profiles are likely to be hit harder and take longer to recover,” Moody’s said in the note.
Airlines will probably cope with losses by cutting costs, including non-paid leave for employees, Lin says. But some diversified routes to avoid depending on China, he adds. On whether or not airfares will rise, “do not expect a lot of bargains,” he says.
Civil aviation will bounce back fast once the virus recedes, if the SARS progression repeats this year, analysts believe. The main airport in Beijing, a SARS outbreak area, reported peak passenger flows a month after SARS passed, while the country’s airlines were selling 90% of their seats, China Daily reported back then.
Lin expects a V-shaped recovery from the coronavirus slump that’s now addling airlines. That’s because passengers who spiked travel during the disease outbreak suddenly jump back into it with extra demand, Lin says.
“Our experience of such events is that air services will return quickly after the virus has been contained and demand will rapidly follow,” Patel says.
As a news reporter I have covered some of everything since 1988, from my alma mater U.C. Berkeley to the Great Hall of the People in Beijing where I followed Communist officials for the Japanese news agency Kyodo. Stationed in Taipei since 2006, I track Taiwanese companies and local economic trends that resonate offshore. At Reuters through 2010, I looked intensely at the island’s awkward relations with China. More recently, I’ve studied high-tech trends in greater China and expanded my overall news coverage to surrounding Asia.
“Everyone knows that pestilences have a way of recurring in the world,” observes Albert Camus in his novel The Plague. “Yet somehow we find it hard to believe in ones that crash down on our heads from a blue sky. There have been as many plagues as wars in history; yet plagues and wars always take people by surprise.”
Camus was imagining a fictional outbreak of plague in 1948 in Oran, a port city in northwest Algeria. But at a time when the world is reeling from a very real microbial emergency sparked by the emergence of a novel coronavirus in Wuhan, central China, his observations are as pertinent as ever.
Like the global emergency over Zika in 2015, or the emergency over the devastating West African Ebola outbreak the year before – or the global panic sparked by SARS (another coronavirus) in 2002-2003, the Wuhan coronavirus epidemic has once again wrong-footed medical experts and taken the world by surprise.
Whether the Wuhan outbreak turns out to be a mild pandemic like the 2009 swine flu, or a more severe one like the 1918 Spanish flu, which killed 50 million people worldwide, at present no one can say.
But if a century of pandemic responses has taught us anything, it is that while we may have gotten better at monitoring pandemic threats in what used to be called the “blank spaces” on the map, we also have a tendency to forget the lessons of medical history.
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The first of these is that epidemics of emerging infectious diseases appear to be accelerating. In the 19th century it took several years for cholera and plague to spread from their endemic centers in India and China to Europe and North America following the trade routes plied by caravans, horses and sail ships.
That all changed with the advent of steam travel and the expansion of the European railway network. For instance, it was a steam ship, sailing from Japan via Honolulu, that most likely brought rats infected with plague to San Francisco in 1900. And ten years earlier, it was steam trains that spread the so-called “Russian” influenza throughout Europe. The result was that within four months of the first report of an outbreak in St Petersburg in December 1889, the Russian flu had been introduced to Berlin and Hamburg, from where it was carried by ocean-going liners to Liverpool, Boston and Buenos Aires.
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The Russian flu sparked two further global waves of illness in 1892 and 1893, resulting in an estimated one million deaths, though the true casualties from the pandemic were probably higher. By contrast the three-waves of Spanish flu occurred during a brief 11-month period between the summer of 1918 and the spring of 1919. The pandemic, which coincided with the First World War, was almost certainly fueled by the rapid passage of American soldiers to the front lines in northern Europe via Atlantic troop carriers.
But the big game-changer has been international jet travel and the greater global connectivity that has come with it. Located at the centre of China’s airline network, Wuhan is both a domestic and international hub, with more than 100 non-stop flights to 22 countries worldwide. The result is that whereas during the 2002 SARS outbreak it took five months for the coronavirus to spread worldwide, this time it has taken just four weeks for the world to catch China’s cold.
Another important lesson from the recent run of epidemics is that by focusing too narrowly on microbial causation, we risk missing the wider ecological and environmental picture.
Seventy percent of emerging infectious diseases originate in the animal kingdom. Beginning with the AIDs pandemic of the 1980s, and continuing through SARS, and the recent Ebola and bird flu scares in the early 2000s, most outbreaks can be traced to so-called spillover events from animals to humans. Some of these can be prevented by better hygiene and regular inspections of wild animal markets. But others can be traced to the disturbance of ecological equilibriums or alterations to the environments in which pathogens habitually reside. This is especially true of viruses such as HIV and Ebola that are believed to circulate in discreet animal reservoirs.
For instance, the West African Ebola epidemic very likely began when children in Guinea dined on a local species of bat, known as lolibelo, that had taken up a roost in a rotten tree stump in the middle of their village. The bats usually reside in dry savannah on the edge of woodlands but appear to have been driven from their normal habitat by climate change and deforestation due to the activities of logging companies.
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Bats are also thought to be the ultimate reservoir of coronaviruses, but the virus has also been isolated from snakes and palm civets, a game animal resembling a cat prized by the Chinese for its heat-giving energy. The SARS epidemic was almost certainly sparked by civets traded at a wild animal market in Shenzhen in southeast China. Likewise, the Wuhan outbreak appears to have begun at a wholesale seafood market which, despite its name, also sold wild animals, including wolf cubs, crocodiles, snakes and bats.
A third lesson is that China’s mega-cities – like vast urban conurbations in Asia, Africa, and South America – provide the ideal breeding grounds for the amplification and spread of novel pathogens by concentrating large numbers of people in cramped and often unsanitary spaces. Sometimes technology and alterations to our built environment can mitigate the risks that such overcrowding presents for the transfer of pathogens to people. Thus the plague abatement measures that followed the outbreaks of plague in San Francisco in 1901 and in Los Angeles in 1924, were effective at removing the rats and squirrels that harbored plague fleas from domestic homes and businesses.
Likewise, tower blocks and air conditioning systems are very effective ways of insulating people from the mosquitoes that transmit Zika and other diseases. But as became clear during the SARS outbreak when Hong Kong saw scores of infections at the Amoy Gardens apartment complex in Kowloon, our built environment can also present new disease risks.
Indeed, time and again, we assist microbes to occupy new ecological niches and spread to new places in ways that usually only become apparent after the event. In such circumstances, it is worth keeping in mind the view expressed by George Bernard Shaw in The Doctor’s Dilemma, namely that “The characteristic microbe of a disease might be a symptom instead of a cause.”
But perhaps the biggest lesson from the recent run of epidemics is that while scientific knowledge is always advancing, it can also be a trap, blinding us to the epidemic just around the corner – the so-called Disease X’s.
Thus, in the case of SARS, our delay in realizing we were dealing with a dangerous new respiratory pathogen, was due in no small part to the WHO’s conviction that the world was on the brink of a pandemic of H5N1 avian influenza—a view that seemed to be confirmed when ducks, geese, and swans suddenly began dying in two Hong Kong parks.
Similarly, the 2014 Ebola outbreak was initially missed by the WHO, not least because few experts suspected that the virus, which had previously been associated with outbreaks in remote forested regions of central Africa, might pose a threat to West Africa, much less to cities such as Monrovia, Freetown, New York and Dallas.
In each case, what was “known” before the event that Ebola can’t reach a major urban area, much less a city in North America; that coronaviruses do not cause atypical pneumonias – was shown to be wrong and the experts were left looking foolish.
The good news this time round is that the new coronavirus was quickly identified by Chinese scientists, and despite the Chinese government’s initial suppression of warnings posted on social media by medics at the frontline of the outbreak, they rapidly shared the genetic sequence. This gives us hope we will be able to develop a vaccine, something that didn’t happen during SARS.
However, those efforts will certainly not be aided by misinformation about the efficacy, for instance, of face masks over sensible measures such as frequent hand-washing. Nor is it helpful to refer to the “exotic” Chinese taste for wild animals or, as one French newspaper did last week, post scare headlines about a “yellow alert.”
A final lesson of medical history is that during epidemics we need to choose our words carefully, lest language becomes a motor for xenophobia, stigma and prejudice, as occurred in the early 1980s when AIDs was wrongly labeled “the gay plague.” This is especially the case in our era of instantaneous digital communications, where misinformation and fake news travels faster and more widely than any virus.
China has kick-started a clinical trial to speedily test a drug for the novel coronavirus infection as the nation rushes therapies for those afflicted and scours for vaccines to protect the rest.
Remdesivir, a new antiviral drug by Gilead Sciences Inc. aimed at infectious diseases such Ebola and SARS, will be tested by a medical team from Beijing-based China-Japan Friendship Hospital for efficacy in treating the deadly new strain of coronavirus, a hospital spokeswoman told Bloomberg News Monday.
Trial for the drug will be conducted in the central Chinese city of Wuhan — ground zero of the viral outbreak that has so far killed more than 360 people, sickened over 17,000 in China and spread to more than a dozen nations. As many as 270 patients with mild and moderate pneumonia caused by the virus will be recruited in a randomized, double-blinded and placebo-controlled study, Chinese news outlet The Paper reported on Sunday.
Drugmakers such as GlaxoSmithKline Plc. as well as Chinese authorities are racing to crash develop vaccines and therapies to combat the new virus that’s more contagious than SARS and could cost the global economy four times more than the $40 billion sapped by the 2003 SARS outbreak. The decision to hold human trials for remdesivir shows it’s among the most promising therapies against the virus that so far has no specific treatments or vaccines.
The experimental drug has not yet been approved for use by any drug regulator in the world but is being used on patients battling the new virus in the absence of approved treatment options, Gilead said in a statement last week.
China’s health regulator has also recommended AbbVie Inc’s HIV medicine Kaletra as an ad-hoc antiviral drug for coronovirus. Kaletra is also set to undergo human trials, according to The Paper.
Meanwhile, a global search continues for therapies to contain the infection that can spread undetected.
Johnson & Johnson has initiated work on a preventive coronavirus vaccine and has “dozens of scientists” working on it, its Chief Scientific Officer Paul Stoffels said last month. GlaxoSmithKline and the Coalition for Epidemic Preparedness Innovations said Monday they will work to accelerate the creation of a vaccine and then provide the doses rapidly.
The Coalition, set up in 2017 to spur the development of shots for known diseases and to respond to new viruses, has also signed contracts with drugmakers including Moderna Inc. and Inovio Pharmaceuticals Inc. as early as Jan. 22 to expedite work on vaccines. Novavax Inc. was among the first ones to announce it was working on a candidate too.
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Health officials, however, say a vaccine version may take three months to be available for the first stages of human testing while developing an effective vaccine generally takes years.
That puts remdesivir on the front lines of combating the infection.
The first patient in the U.S. infected with the virus, a 35-year-old man, has seen his pneumonia improve after he was given remdesivir, doctors treating him said in a study published in the New England Journal of Medicine last week.
The trial in China could lead to a fast-track approval of remdesivir by the Chinese drug regulator, which in some cases has been the fastest in the world. China’s drug law now allows conditional approval for drugs with clinical data demonstrating efficacy against aliments that are life-threatening and have no existing therapies.