China to stop individual travel to HK to contain virus spread

Bloomberg

Governments, companies and international health organisations rushed to contain a Sars-like coronavirus that has claimed more than 100 lives, with Hong Kong the latest to announce travel restrictions on people moving in and out of the mainland.
Hong Kong will close some border checkpoints and restrict flights and train services from the mainland, Chief Executive Carrie Lam said on Tuesday. The Chinese government is also suspending visas for visitors to the territory, she said.
The new measures mark a step change in efforts to contain the virus, after China effectively locked down about 50 million people in Wuhan and Hubei province, the epicenter of the outbreak. The latest moves are aimed at protecting an Asian financial hub where many of the world’s biggest banks and companies have significant operations — and which has already been reeling from months of anti-Beijing protests.
“We have to start with the source,” Lam said at a press conference, wearing a surgical mask. “This should greatly reduce visitors from China.”
Other disruptions to global businesses, travel and the world’s second-largest economy are growing. China has extended the Lunar New Year holiday, while companies are shutting stores and evacuating workers.
The spread of the illness has reignited concerns over global growth, with stocks continuing a selloff in Asia on Tuesday. China’s markets remained closed for the holiday but
the country’s securities regulator told investors to evaluate the impact of the virus
objectively.
The new moves to contain the disease come as the death toll in China reached 106, while confirmed cases soared 65% to 4,515. Almost all of the deaths have occurred in Hubei province. While infections have been reported throughout Asia as well as in the US, France and Canada, the numbers overseas have been much lower.
Effective at midnight on Thursday, all rail services from the mainland to Hong Kong will be suspended while flights will be reduced by half, Lam said. Cross-border ferry services will also be halted.
With the restrictions on travel and an extended holiday, it’s already clear the virus is hurting consumption and tourism. Industrial production will also be hit just as factories would normally be getting back into full swing following the Lunar New Year break.

Global corporations are also clamping down, restricting travel to China and urging employees in the region — or those who have recently returned from China — to work from home. Fast Retailing Co. has closed about 100 Uniqlo stores in China, mostly in Hubei, according to a company spokeswoman.
Nissan Motor Co. planned to join automakers evacuating workers from the hardest hit areas, while Carnival Corp. and Royal Caribbean Cruises Ltd. suspended nine voyages leaving China Jan. 25 to Feb. 4 and promised refunds to customers.
In Hong Kong, the government has asked civil servants to work from home and announced the temporary closing of sports and cultural facilities starting Wednesday, including museums, swimming pools, public libraries and soccer pitches.
Evacuation Plans
The U.S. and other nations — including France, Japan, South Korea and Australia — were negotiating with China to arrange flights to evacuate diplomats, personnel and citizens from the hardest-hit areas of the country.
State Department spokeswoman Morgan Ortagus said the U.S. was working with Chinese authorities to bring back American consulate personnel and other citizens from Wuhan. Ortagus said travellers would be “screened and monitored to protect their health as well as the health and safety of their fellow Americans here at home.”
Japan, planned to send a chartered plane Tuesday evening to repatriate the first 200 of some 650 nationals who want to return, Foreign Minister Toshimitsu Motegi said in Tokyo.
Evacuations have been complicated by the blanket travel restrictions imposed on a large part of central China to prevent the disease from spreading.
The WHO’s Tedros urged countries not to overreact, saying the agency doesn’t encourage them to evacuate citizens, according to a Xinhua report.
Travel Alert
The U.S. State Department raised its travel alert to the second-highest of four levels, saying citizens should reconsider travel to China while avoiding travel to the area near Wuhan.
The U.S. may also expand travel screening at its borders and is closely monitoring 110 people to stop the virus, testing them for presence of the pathogen. As of Monday morning, there have been no new U.S. cases after the first five patients were identified in the past week.
Anxiety is growing amid evidence that the disease has an incubation period of as long as two weeks before those infected start to show symptoms. That raises the possibility that people could travel and eventually infect others before realizing they have the illness.
So far there has been no clear evidence that the virus can spread during the incubation period before patients have symptoms, according to Nancy Messonnier, the Centres for Disease Control and Prevention’s director of the National Centre for Immunization and Respiratory Diseases.
“At this time in the U.S., this virus is not spreading in the community,” Messonnier said.

Assess epidemic ‘rationally,’ says China
Bloomberg

China’s top securities regulator said that investors should evaluate the impact of the deadly coronavirus objectively, following a slide in equities across the globe and a retreat in the yuan in offshore trading.
The China Securities Regulatory Commission said in a statement issued during the Lunar New Year holiday on Tuesday that securities firms should guide investors to assess the disease “rationally and objectively” and “adhere to the concept of long-term investment and value investment.”
China’s domestic markets remain shut for the break, and are scheduled to reopen on Monday. That session may prove volatile, coming after worries about the economic impact of the spreading virus saw contracts tied to Chinese stocks tumble in recent days. FTSE China A50 futures have slumped almost 6% since the close on Thursday, when trading on the mainland last occurred.
The outbreak has wrecked what would otherwise be a strong period for retail sales, with hundreds of millions of Chinese traveling and spending during the new year celebrations. The disease also emerged just as China’s economy was picking up steam, with the securing of a phase-one trade deal with the U.S. and signs of an upturn in manufacturing.
The CSRC called for companies to make dealing with the virus their top priority, and to “implement detailed prevention and control measures.”
At the same time, the regulator ordered contingency planning to ensure the “safe and stable operation of the transaction-settlement system.” Brokerages should provide support for off-site trading amid the focus on preventing the spread of the disease, the CSRC said.
Reopening China’s markets could prove challenging as individuals and employers alike grapple with how to get back to business while at the same time strengthening health-safety standards. The CSRC also urged companies to be forthright in their disclosures and told stock exchanges to ensure that investor rights are protected.
“All listed companies are to disclose information in a true, accurate, complete and timely manner,” the regulator said.
China Stocks
China’s domestic stock market, the world’s second largest, is famous for being dominated by retail traders, who can sometimes engage in crowd behavior. News of the government’s latest initiatives — a new subsidy or regulation — can send stocks soaring as individual investors rush to pile in. And official calls for calm aren’t unusual.
In 2018, the CSRC urged local authorities to help ease pressure on listed companies threatened by sales of shares that had been pledged as collateral for loans. Back in 2015, China took even sterner measures, suspending a swathe of shares during an epic bursting of a domestic stock bubble. It also deployed the “national team,” as state-backed funds are called, to prop up shares.
Read here how traders suspected state support at work in late 2019
Policy makers have at the same time tried to nurture a long-term investment culture. China is allowing full foreign ownership of life insurers, futures, securities and mutual fund companies in stages this year.
Foreign investors have also been an increasing presence in the onshore market. Overseas capital now accounts for 10% of daily equity trading in Shanghai, up from 2% just 12 months back, Zhu Min, a former central bank official who is now chairman of the National Institute of Financial Research at Tsinghua University, said earlier this month.
That all raises the stakes for how regulators handle the domestic markets as they reopen next week.