World leaders join forces on coronavirus vaccine; Italy starts to reopen, backlash against China builds

CORONAVIRUS ALERT 5/4/2020

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In top stories today:

  • Global leaders pledged a joint funding effort on a coronavirus vaccine, as countries worldwide try to find a way forward to reopen their economies—and the debate about how long a vaccine may take continues. As Italy begins a three-phase approach to reopen after eight weeks of lockdown, a worldwide backlash against China builds over the origins of the disease.
  • QUOTE: “If we can develop a vaccine that is produced by the world, for the whole world, this will be a unique global public good of the 21st Century,” world leaders including Italian Prime Minister Giuseppe Conte, French President Emmanuel Macron, and German Chancellor Angela Merkel wrote in an open letter published in weekend newspapers, the BBC reported.
  • At least 7.5 billion euros ($8.2 billion) to develop a coronavirus vaccine and treatments. That’s the aim of a global pledging “marathon” world leaders are holding at 1:00 PM GMT on May 4 after rich countries promised a joint response, Reuters reported. The funding effort is organized by the European Union (EU) and non-EU states Britain and Norway, as well as Japan, Canada, and Saudi Arabia, the newswire added.
  • US President Donald J. Trump pledged a “conclusive” report by the US government about the Chinese origins of the coronavirus outbreak, saying that he had little doubt that Beijing misled the world about the scale of the disease, Bloomberg reported, citing him speaking at a “virtual town hall” hosted by Fox News on May 3. Earlier that day Secretary of State Michael Pompeo said there was “enormous evidence” that the outbreak started in a laboratory in the Chinese city of Wuhan, the newswire added.
  • A worldwide backlash about coronavirus is building against China, ranging from calls for inquiries to demands for reparations, The New York Times reported. While Australia has called for an inquiry into the origins of the disease, Germany and the UK are hesitant again about welcoming in the tech giant Huawei, the newspaper said. China, ever resistant to external criticism, has responded aggressively, adding to growing mistrust of Beijing, the Times added.
  • READ MORE: “COVID-19 has provided a clarifying force revealing more clearly than ever before both the nature and relentlessness of the ruling Chinese Communist Party’s ambition to place itself at the center of global power and influence,” writes the Atlantic Council’s Frederick Kempe.
  • Manufacturing and construction businesses reopen in Italy after eight weeks of coronavirus lockdown on May 4 if they observe social distancing, The Wall Street Journal reported. Shops, museums, and other public venues follow on May 18, then restaurants, bars, and hairdressers on June 1, the newspaper said.
  • Japan extended its state of emergency, due to expire on May 6, until May 31 but is also preparing to relax some restrictions to revive the economy, The Japan Times reported. The government may lift the state of emergency early depending on an evaluation by infectious disease experts around May 14, Prime Minister Shinzo Abe said, the newspaper added.
  • QUOTE: “We have been maintaining our battle for more than three months,” said Shigeki Fujitani, a professor and director of emergency and critical care medicine at St. Marianna University Hospital in Kawasaki, Reuters reported. “[T]here are medical professionals that are already feeling a significant amount of stress … Our challenge from now will be to lighten their stress and continue fighting.”
  • Australia and New Zealand, separated by the Tasman Sea, could soon open their borders to each other to create a “Trans-Tasman bubble” as they look to reopen their economies after slowing their coronavirus outbreaks considerably, Reuters reported. New Zealand Prime Minister Jacinda Ardern will take part in an emergency Australian coronavirus cabinet meeting on May 6, fueling anticipation of a travel agreement, the newswire added.
  • “Can governments afford the debts they are piling up to stabilise economies?” runs a Financial Times headline. Two experts debate the long-term impact of coronavirus stimulus packages on inflation.

INFECTIONS, TREATMENT

  • Some of the world’s most populous countries including India posted new peaks in coronavirus infections on May 2, as new cases in Russia exceeded ten thousand for the first time, the Associated Press reported. The death toll in the UK approached that of Italy, previously at the epicenter of the outbreak in Europe, even though the population is younger and officials in London had longer to prepare before the pandemic struck, AP said. The United States still has tens of thousands of new daily infections and reported more than 1,400 deaths on May 3, the news service added.
  • Estimates vary on how long a vaccine may take to develop. A vaccine won’t be ready until the end of 2021 because of the phase two and three clinical trials necessary to ensure safety and efficacy, Dale Fisher, chair of the World Health Organization (WHO) Global Outbreak Alert and Response Network, told CNBC’s “Street Signs Asia” on May 4.
  • Developing a vaccine against coronavirus could take years, Germany’s health minister said, the Straits Times reported. Jens Spahn made his comments late on May 3 on ARD television, said the newspaper, publishing an Agence France-Presse report. New cases and deaths from coronavirus in Germany were at their lowest for five weeks in the twenty-four hours since May 3, Bloomberg reported.
  • QUOTE: “Through international cooperation on installing capacity we can ensure that the U.S. and the world get the vaccine we all need, and that the global economy restarts as quickly as possible,” four economics professors wrote in The New York Times. “An advance market commitment to support vaccine development is a critical component of a timely plan to defeat the virus, reopen the economy and return to normal life stronger and more resilient.”
  • President Trump suggested a vaccine could be ready by the end of 2020, although experts say it will take between twelve and eighteen months, the BBC reported, citing him speaking at the May 3 virtual “town hall” on Fox News.
  • “January? Autumn? Doctors Debate Arrival for Covid Vaccine,” reads a Bloomberg headline. Researchers continue to debate how quickly a vaccine may be ready, with January or even the fall now featuring on the timetable, the newswire said.
  • The New York Times asks: “Why Does the Virus Devastate Some Places and Spare Others?” The article contrasts death rates in Iran with neighboring Iraq and also compares the Dominican Republic with Haiti. While global cities like New York, London, and Paris have been hot spots, teeming cities such as Bangkok, New Delhi, and Lagos have so far been spared by the “capricious” virus, the newspaper said. The Straits Times published The New York Times’ story.

ROLLS ROYCE, FACTORIES

  • Jet-engine maker Rolls Royce may cut 15 percent of its workforce, or eight thousand jobs, although no final decision has been taken, as the aviation industry contends with an unprecedented crisis caused by the coronavirus pandemic, Bloomberg reported. The long-haul flights that use the company’s wide-body engines will probably be the last to recover, the newswire added.
  • Warren Buffett, the billionaire investor and chairman of Berkshire Hathaway, said the conglomerate has sold all of its shares in US airlines because of the coronavirus outbreak, CNBC reported. Those holdings, including United, American, Southwest and Delta Airlines, were worth more than $4 billion in December, CNBC added.
  • QUOTE: “The world has changed for the airlines. And I don’t know how it’s changed and I hope it corrects itself in a reasonably prompt way,” Buffett said at Berkshire Hathaway’s annual investor meeting on May 2, CNBC reported. “I don’t know if Americans have now changed their habits or will change their habits because of the extended period.”
  • Factory activity across the world was ravaged in April as the coronavirus pandemic froze production and slashed demand, Reuters reported, citing business surveys. Supply chains have been massively disrupted and the global economy is forecast to record its steepest contraction this year following lockdowns worldwide, the newswire said.
  • QUOTE: “Economic data should remind investors of the bleak economic situation ahead even as governments from previous hotspots ready the gradual reopening of their economies,” said Prakash Sakpal, Asia Economist at ING, Reuters reported.
  • US and European banks are set to book more than $50 billion in provisions for bad loans in the first quarter, the highest level since the financial crisis of 2008 to 2009 and a sign of the widespread damage wrought by coronavirus, the Financial Times reported. US banks have been more cautious than their European peers, boosting bad-loan reserves by 350 percent from the year-earlier period to $25 billion, compared with a 269 percent increase to about $16 billion, the newspaper said.
  • Speculation is growing in the UK media that the government aims to reopen primary schools in England on June 1, CBNC reported. Prime Minister Boris Johnson will give details later this week about plans to reopen the economy, Cabinet Minister Michael Gove said on May 3, CNBC added.  
  • The Financial Times published a voices article focusing on the millions of workers affected by hardship because of coronavirus in middle-income countries, the fastest growing economies in the past two decades. The newspaper interviewed an Uber driver in India, a fishmonger in Brazil, a hair-salon owner in Thailand, a tailor in Nigeria, and hotel workers in Turkey.
  • QUOTE: “People are very scared to travel because of coronavirus,” said Harinath Singh, an Uber driver in New Delhi, India, the Financial Times reported. “Even if lockdown ends, business is going to be bad.”
  • Brazil’s first disbursement of the extraordinary cash transfer ($115 and up to two members per household) reached 50 million people. Chile announced an additional transfer for independent workers whose income has been reduced at least 20 percent, which is intended to benefit 1.2 million people. In Panama, the 84,000 beneficiaries of the eighty dollar voucher will be able to use their identity cards as debit cards to purchase food and medicine in at least three hundred establishments
  • WATCH MORE: Please join the Atlantic Council for a virtual address and discussion with Lieutenant General Charles Hooper, director of the Defense Security Cooperation Agency (DSCA), on “Security Through Global Partnerships.” Tuesday, May 5 from 10:30 AM to 11:30 AM EDT, online.

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