China economy contracts for first time in forty years, UN says Africa faces up to 300,000 virus deaths

CORONAVIRUS ALERT 4/17/2020

The Atlantic Council’s Coronavirus Alert is a regular summary of policy, economic, and business events around the emergency. To stay updated, sign up to the Coronavirus Alert here.

In top stories today:

  • China’s economy contracted for the first time in more than forty years. Early plans to reopen the United States spark concerns. And as global cases of coronavirus approached 2.2 million worldwide, a United Nations agency said Africa faces up to 300,000 deaths from the disease.
  • QUOTE: “There may be some setbacks,” said Dr. Anthony Fauci, the nation’s top infectious-disease expert, news service Stat reported. “I mean, let’s face it, this is uncharted water. There may be some setbacks that [mean] we may have to pull back a little. And then go forward.”
  • The economy of China, the engine of global growth for the past two decades, contracted for the first time in more than forty years at the beginning of the year, the Financial Times (FT) reported. Gross domestic product declined by 6.8 percent in the first quarter compared with a year earlier, the FT said. It’s the grimmest sign of the economic damage that the coronavirus pandemic has caused, according to the newspaper.
  • US President Donald J. Trump released guidelines on April 16 for a phased reopening of the United States. The Washington Post called it “a vague set of recommendations” with no date for implementation. Governors will make the final decision about opening their states, Trump told them on a conference call earlier in the day, The Wall Street Journal reported.
  • Some states could start to reopen straight away but Trump declined to say which ones, though he added later that twenty-nine states are in that category, Bloomberg said.
  • “Scientists see risks in White House guidelines for reopening states” runs a New York Times headline. The article outlines concerns about testing, protective equipment, and the fact that clusters of infections can happen even in states with relatively few cases.  
  • QUOTE: “We can begin the next front in our war,” Trump told reporters at the White House, Bloomberg reported. “We’re opening up our country. We have to do that.”
  • Republicans and Democrats in Congress disagree on how to replenish the exhausted $350 billion loan fund for small businesses, The Wall Street Journal reported. While Republicans want to approve an extra $250 billion, Democrats call for changes to the small-business program and additional funding for state and local governments as well as hospitals, the newspaper said.
  • “Coronavirus threatens $500bn hole in US state budgets,” runs a headline in the Financial Times. Unless the government steps in with bailout programs then massive cuts to education and other public services will follow, the newspaper said.
  • QUOTE: “What’s missing from the White House reopening plan—and what is urgently required—is management of expectations,” Kimberley A. Strassel wrote in The Wall Street Journal. “The administration needs to keep reminding the country of the original mission—to flatten the curve. And it needs to define quickly its own measure of success. That means explaining the limitations of even a wide-scale testing regime, preparing the country for continued rising death tolls, and warning that this virus is going to be with us for many months to come.”

AFRICAN DEATH TOLL

  • The coronavirus pandemic is likely to claim the lives of at least 300,000 Africans and risks pushing 29 million people on the continent into extreme poverty, the UN Economic Commission for Africa said on April 17, calling for a $100 billion safety net for the region, Reuters reported.
  • The statistics say… There are fewer than 20,000 cases of coronavirus in Africa’s fifty-four countries, compared with more than 2 million cases globally. The World Health Organization said on April 16 that Africa could see as many as 10 million cases within three to six months, according to Reuters.

TREATMENT HOPES

  • “Early peek at data on Gilead coronavirus drug suggests patients are responding to treatment.” That’s the headline to an exclusive story by news service Stat. Severely affected patients taking Gilead Sciences’ antiviral medicine remdesivir in a clinical trial in Chicago recovered quickly from fever and respiratory symptoms, with nearly all of them discharged within a week, Stat said.
  • Gilead shares gained in early trading on April 17, Bloomberg said. CNBC and the Financial Times are among media outlets who pick up on the Stat story too.
  • Roche plans to start selling an antibody test for coronavirus early next month, and production could hit the high double-digit millions by June, Bloomberg reported. That adds another diagnostic measure that experts say is needed to lift social distancing restrictions that are in place worldwide, the newswire said.
  • The Centers for Disease Control and Prevention is in talks to divert 25,000 Census Bureau workers to do contact tracing for perhaps two months, The New York Times reported, citing a government official. Peace Corps volunteers returning from overseas may join the effort, the newspaper said.

CHINA RELATIONS

  • The Chinese city of Wuhan, where the coronavirus outbreak first emerged, revised its deal toll upwards by 50 percent following a “city-wide investigation,” state media Xinhua reported, CBNC said. That increases fatalities by 1,290 to 3,869, the report said. Explanations included incomplete registration of deaths and delayed reporting, CNBC added.
  • Business as usual? Not between the UK and China after the pandemic ends. Foreign Secretary Dominic Raab, standing in for Prime Minister Boris Johnson as he recovers from coronavirus, said cooperation between the countries has been good on repatriation of UK nationals from Wuhan and on medical supplies—but there remain “hard questions” to answer about how the outbreak started, Bloomberg reported.
  • QUOTE: “There absolutely needs to be a very, very deep dive after the event and review of the lessons, including of the outbreak of the virus,” Raab said at a press conference in London on April 16, Bloomberg reported. “I don’t think we can flinch from that at all.”
  • A US-China economic breakup has become more realistic as coronavirus disrupts supply chains and adds to strains between the two nations, The Wall Street Journal reported, citing the American Chamber of Commerce in China and the American Chamber of Commerce in Shanghai. March surveys by both organizations showed that 44 percent of 25 large US companies said so-called decoupling of the two economies would be impossible, compared with 66 percent in October, the newspaper reported.

EU UNRAVELLING?

  • The European Union risks unravelling as a “political project” unless it backs economies such as Italy and helps them to recover from the coronavirus crisis, French President Emmanuel Macron told the Financial Times in an interview. There’s no choice except to set up a fund to issue common debt and then support states according to their needs, Macron said. That’s an idea that Germany and the Netherlands oppose, the FT reported. The newspaper also publishes its interview with Macron as a long-form article.
  • QUOTE: “I believe [the EU] is a political project,” Macron said, the Financial Times reported. “If it’s a political project, the human factor is the priority and there are notions of solidarity that come into play … the economy follows on from that.”
  • The UK reacted too slowly to the coronavirus outbreak, which could cause the death of 40,000 people in the country, Anthony Costello, professor of International Child Health and Director of the UCL Institute for Global Health, told a parliamentary committee, Reuters reported. More than 13,700 people have died from coronavirus in UK hospitals so far, the newswire said.
  • Ireland will quadruple its contribution to World Health Organization this year to 9.5 million euros, The New York Times reported. “So many countries rely on United Nations expertise and capacity to save lives,” Simon Coveney, Ireland’s foreign minister, wrote on Twitter, the newspaper said.
  • QUOTE: “These are extraordinary circumstances calling for extraordinary measures that must include a comprehensive debt standstill,” George Soros and Chris Canavan wrote on the website of Bloomberg. “Developing countries, even those considered middle-income countries, must be allowed to defer all debt-service payments to all international creditors—official and private—for at least one year.”

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