Coronavirus death toll surges past 1,000 as fears grow for Chinese economy

Health workers in protective gear walk as they evacuate residents from a public housing building, following the outbreak of the novel coronavirus, outside Hong Mei House, at Cheung Hong Estate in Hong Kong, China 11 February – Reuters

SHANGHAI (Reuters): Worry grew on Tuesday that the extent of economic disruption from China’s coronavirus outbreak was being underestimated as the death toll in the world’s second-largest economy from the epidemic soared past 1,000.

Companies struggled to get back to work after an extended Lunar New Year holiday while hundreds of Chinese firms said they would need billions of dollars in loans to stay afloat. Layoffs also began despite assurances by President Xi Jinping that widespread sackings would be avoided.

“The coronavirus outbreak completely changed the dynamics of the Chinese economy,” JPMorgan analysts said in a note to clients as they again downgraded forecasts for Chinese growth this quarter.

Another 108 coronavirus deaths were reported on Tuesday, a daily record, bringing the total number of people killed in the country to 1,016, the National Health Commission said.

There were 2,478 new confirmed cases on the mainland as of Monday, down from 3,062 on the previous day, bringing the total to 42,638.

It was the second time in the past two weeks that authorities recorded a daily drop in new cases, offering a hint of hope the virus was peaking. But the World Health Organization (WHO) warned the spread of cases outside of China could be “the spark that becomes a bigger fire”.

A WHO team has arrived in China to investigate the outbreak.

Only 319 cases have been confirmed in 24 other countries and territories outside mainland China, according to WHO and Chinese health officials, with two deaths, one in Hong Kong and the other in the Philippines.

More than 300 Chinese companies are seeking bank loans totaling at least 57.4 billion yuan ($8.2 billion) to help cope with the disruption caused by locked down cities, closed factories and crippled supply lines, two banking sources said. Among the prospective borrowers are food delivery giant Meituan Dianping, smartphone maker Xiaomi Corp and ride-hailing provider Didi Chuxing Technology Co, the sources said.

Sackings start

Chinese firm Xinchao Media said on Monday it had laid off 500 people, or just over 10% of its workforce, and restaurant chain Xibei said it was worried about how to pay the wages of its roughly 20,000 workers.

Authorities said they would roll out measures to stabilize jobs, in addition to previously announced cuts to interest rates and fiscal stimulus designed to minimize any downturn.