Wuhan Corona Outbreak: Penumbra and Umbra Effects

The Corona virus that originated in December 2019 at Wuhan continues to grab headlines world over. As on 10 Feb 2020, a total of 40625 cases of infections and 910 deaths were recorded. On 18 Feb 2020, the tally reads 73336 infection cases and 1874 deaths¹. That is an increase of 55.39 % infections and 48.55 % of deaths in the period. As on 18 Feb 2020, official data shows China itself had 72438 cases of infections and 1869 deaths. The social media puts these numbers much higher with 250 million quarantined and 1.5 million confirmed infections. The truth may lie somewhere in between. The virus proliferates globally in absence of suitable combative antidotes. The virus related events, medical information, quarantine and other data are available but not discussed here.

This article lists some related developments since the outbreak was officially acknowledged including some developments that were pushed off the centre stage.

Wuhan and The Epidemic

Wuhan is a major strategic transportation hub, with dozens of railways, roads and expressways passing through the city and connecting other major cities. It holds a significant place in China’s Belt and Road Initiative (BRI). A number of international freight trains originate from Wuhan bound for Duisburg, Germany.

Wuhan houses three national development zones, four scientific and technological development parks, over 350 research institutes, 1,656 hi-tech enterprises, numerous enterprise incubators, and 230 of Fortune Global 500 firms. All of these result in a sizable transitory population - a factor in spread of the virus. Its 11 million population, living in a 3200 sq. km area has been quarantined since 23 January 2020. Wuhan virus also affected pockets of Beijing, Shanghai and Chongqing², (another terminus for international freight trains).

At the time of its locking down, around 5 million people had left Wuhan. Baidu, which gathers travel data from more than 120 billion daily location requests from its map app and location services, confirms the exodus. Significant to note that Baidu's data shows proportional travel, not absolute numbers of recorded trips, and does not include trips by people who don't use mobile phones or apps that rely on Baidu's popular location services¹. The initial exodus from Wuhan touched some destinations not previously known to be favourites e.g. Zhejiang province which saw maximum migration. Another aspect is that the migrating masses may not have developed symptoms but could still transmit the virus. This would require authorities in such destinations to identify the new comers and to prepare for disease control and prevention.

The number of Chinese and foreign nationals - corporate staff, businessmen, government employees, students, aircrew, fishermen etc. who travelled abroad or to China just before or after the outbreak (possible carriers), remains indeterminate. Some countries imposed restrictions like denying docking permissions to the luxury Cruise ships - Diamond Princess (1045 crew and 2666 passengers)⁴, and MS Westerdam (1285 crew, 1455 passengers).⁵ Later Cambodia allowed Westerdam to anchor 2 kms away from Cambodian shores and permitted those passengers who cleared a health check and had confirmed flight bookings to disembark. While some passengers who tested negative have disembarked, the crew is likely to stay onboard longer. The “Princess” company has issued itinerary changes In Asia for its Diamond Princess, Majestic Princess and Sapphire Princess till 29 April 2020⁶.

Steps Taken by China and Lacunae

Wuhan city turned public spaces like sports stadia, conference and exhibition halls into make shift hospitals. China notified new medical related crimes such as refusing to take medical checkups, damaging or destroying property. Numerous individuals donated relief supplies. Alibaba established a 1 billion RMB ($144 million USD) special fund to directly purchase medical supplies from home and abroad along with arranging three meals a day to hospitals in Wuhan and Hubei⁷.

Big manufacture centres like Shenzhou, Suzhou, Nanying require companies to know the travel details of all their employees and bar entry to any who has visited Hubei⁸.

The World Military Games 2019 were held at Wuhan from 15 to 30 October 2019. The virus outbreak - soon thereafter - caught the Wuhan city officials and the Hubei provincial government unprepared. The PLA response - especially of the Wuhan base of the Joint Logistics Support Force (JLSF - having a network of warehouses and stockpiles) was incrementally but reluctantly built up. It proved inadequate in the initial stages to deal with the contingency. On 26th January the JLSF had only established a response and coordination mechanism rather than distributing stockpiles, delivering aid, or mobilization of hospitals under its management.

Only later did the PLA actively got involved - from 3rd February onwards, when PLA deployed around 3500 medical personnel to man the makeshift hospitals set up in Wuhan. PLA logistics team, (260 officers, 130 military trucks) from the Wuhan garrison, and neighbouring establishments delivered 200 tonnes of basic supplies to super markets. Xinhua reported on 13 February that more troops were air transported into Wuhan.

Issues Pushed into the Background by the Outbreak

The coverage of the virus outbreak eclipsed other issues that enjoyed the spotlight till then, namely Sino-US Trade War, Taiwan, South China Sea (SCS), China’s BRI initiative and its growing global influence and China’s space initiatives. A brief discussion follows.

Sino US Trade War

The Trade War triggered off in 2018, leading to billions of dollars reciprocal imposition of tariffs. In 2019, White House considered some curbs on US investments in China e.g. delisting Chinese stocks in the US.

On 15 January 2020, the US and China signed a preliminary trade agreement that will see Beijing purchase an additional $200 billion of US goods and services over the next two years. On its part, US is to reduce tariffs on $120 billion in Chinese products from 15% to 7.5%. Overall, it would result in a dramatic surge in US exports. American exports to China are estimated to increase to over $260 billion in 2020, and around $310 billion in 2021 if the deal holds⁹. The virus eclipsed the situation, just when the sparring nations were reaching an understanding.

Taiwan and South China Sea (SCS)

The virus outbreak ostensibly suppressed the spotlight on Taiwan and SCS issues. On 10 and 11 February, Taiwan F-16s scrambled to shadow Chinese J-11 jet fighters, KJ-500 early warning aircraft and H-6 bombers that flew around Taiwan. China defended it as “Taiwan drills are meant to hone combat capabilities.” Taiwan claimed the drills as a threat to regional peace and asserted its resolve to not buckle in the face of China's threats¹⁰. The United States dispatched two B-52 Stratofortress bombers on southward flights off Taiwan's east coast. Taiwan’s President Tsai stated that China should focus on tackling the outbreak of the new coronavirus rather than menacing her nation (which has been effected by the virus).

The U.S. has no formal diplomatic ties with Taiwan but is its main arms supplier, but is bound by the Taiwan Relations Act to aid the island’s self-defense. The US views China’s military moves toward Taiwan this week may be broader reflection of China’s stance toward the entire region. The US naval ships have been showing presence in the region; thrice in 2018, nine times in 2019, and twice so far in 2020. The guided-missile cruiser USS Shiloh (CG-67), on 17 January and another warship sailed through the Taiwan Strait on 15 Feb¹¹. Both China and USA have mutually traded accusations and counter accusations, with US also warning China exploiting the Singapore Airshow (11-16 February)¹².

Space Initiatives

The South China Morning Post (SCMP) reported launching of two new satellites on 16 December 2019, bringing the total of Beidou satellites to 24. Now, with eight satellites, evenly distributed in three plane deployment, each location on earth is covered by 5-6 satellites at any one time, meeting the precondition of a global navigation system. Two more satellites planned to be launched by first half of 2020, will complete the Chinese GPS system.

Impact on Strategic and International Opportunities

A major effect has been economic. In 2019, China contributed 12% of global trade. Following the outbreak, China locked down few cities restricting transportation and shuttering factories, impacting production and supply chains of many countries including US that had outsourced manufacturing to China. Demand is depressed during the novel coronavirus pneumonia outbreak, but will rebound after the outbreak to drive China's economic upswing. The country's economy will likely pick up in the second half of 2020. Many international brands have closed their stores in Wuhan, and some have also closed business in other places.¹³ Cathay Pacific has asked its 27000 staff to take three weeks of unpaid leave over the next three months. ¹⁴ PRC can possibly reduce taxes, give subsidies to further stimulate consumption in resuming production, ease employment pressures, and provide policy support to manufacturing enterprises and foreign trade enterprises impaired during the epidemic.

Short and Long Term Effects

The short term effects can be - firstly, delays or disruptions to the supply chains of countries that had become dependent on China manufacture. They would either reassign manufacture to others or resort to indigenous manufacture. Either way their consumers will face increased costs. Secondly, the experience of those visiting China, will ricochet and deter others in future from China cruises. Thirdly, trains, ships, airplanes inside or outside China present a unique problem as they cannot be disinfected in compressed time frames, thus keeping the apparition alive. Fourthly, some immigration processes may introduce compulsory health checks and delays.

The Long Term effects would be - shifting of manufacturing to other countries would open more jobs for locals. Those countries which can ramp up their production facilities and capabilities and have lower labour costs may benefit.

Latent Spinoffs

The outbreak has restricted physical buying activities. This provides additional impetus to online commercial transactions and offers an application scenario for technologies like big data, artificial intelligence (AI) and cloud computing.

Many other change areas can be visualized - integrating and redrawing diverse autonomous production, plans for stocking and distribution chains, developing knowledge based and technology intensive industries including office automation, AI, healthcare, new energy and advanced materials. Accelerating building of new infrastructure based on new generation of IT, supporting industries and in networking and digitalization and re-evaluating existing disaster management plans are likely to be important elements of the possible spinoffs. It could possibly lead to increasing the present importance of 5G, intelligent connected vehicles, e-commerce, online clinic and online education. Lastly, investors may start looking anew at health care and pharmaceutical sectors.

Concluding Remarks

China seems to remain on track for its major interests albeit at a quieter note. The epidemic's effect on China's economy is a short-term shock, which may have little impact on the country's long term economic growth. How China’s equations with its neighbours, allies and adversaries and BRI beneficiaries undergo changes in the near future remains to be seen.

Part of PLA troops and logistics are now involved with combating the virus outbreak. While PLA continues its assertions over Taiwan Straits, it could be to keep the kettle warm rather than bring it to a full boil.

References

1. https://www.worldometers.info/coronavirus/ [3]
2. https://abcnews.go.com/Health/wireStory/mapping-app-location-data-shows-virus-spread-china-68858061 [4]
3. Ibid
4. https://www.usatoday.com/story/travel/cruises/2020/02/15/coronavirus-us-evacuate-400-americans-quarantined-cruise-ship-diamond-princess/4764078002/ [5]
5. https://www.voanews.com/science-health/coronavirus-outbreak/cruise-ship-welcomed-cambodia-anchored-offshore-pending [6]
6. https://www.princess.com/news/notices_and_advisories/notices/itinerary-modifications-cancellations.html [7]
7. https://www.defenseone.com/ideas/2020/02/coronavirus-spreads-chinas-military-has-been-largely-mia/162950/ [8]
8. https://www.nytimes.com/2020/02/10/world/asia/coronavirus-china.html [9]
9. https://edition.cnn.com/2020/01/16/business/us-china-phase-1-trade-deal-details/index.html [10]
10. https://www.aljazeera.com/news/2020/02/china-taiwan-drills-meant-hone-combat-capabilities-200211041844107.html [11]
11. https://focustaiwan.tw/politics/202002150019 [12]
12. https://www.cnbc.com/2020/02/12/china-crossing-into-taiwan-airspace-was-completely-inappropriate.html [13]
13. https://www.businessinsider.in/slideshows/miscellaneous/chinas-unprecedented-quarantine-of-11-million-people-in-wuhan-is-2-weeks-old-heres-what-it-is-like-in-the-isolated-city-/many-international-brands-have-closed-their-stores-in-wuhan-and-some-have-also-done-so-in-other-parts-of-china-/slideshow/74012555.cms [14]
14. https://www.scmp.com/news/hong-kong/transport/article/3049132/coronavirus-cathay-pacific-asks-all-27000-employees-take [15]

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