Charting China's Imminent Implosion

[Swordsmyth]

Following a big, surprise jump in November, China’s official PMIs were expected to fall back a little in December (but remain - handily - above 50 and the 'expansion/contraction' divide), helped by an improvement in industrial production and hopes after the 'phase one' trade deal was (allegedly) completed.
A mixed bag though with manufacturing PMI flat at 50.2 (better than the expected 50.1) and non-manufacturing PMI lower at 53.5 (from 54.4) and below expectations of 54.2.



New manufacturing orders picked up (the last time the reading was above 50 was May 2018), but the improvement in manufacturing was concentrated in large- and medium-sized enterprises with small enterprises plunging deeper into contraction (at 47.2).
New non-manufacturing orders slowed as prices (selling and buying fell), pushing employment further into contraction (48.3).



We wonder how long this re-excitement of hope about Chinese economic growth will last given the massive amount of stimulus has produced a very meager credit impulse...



More at: https://www.zerohedge.com/economics/...ulti-year-lows

[Swordsmyth]

Just three days after China quietly cut rates by 20bps when it ordered banks to switch from the traditional Benchmark 1 year rate to the new Loan Prime Rate (aka China's LIBOR) as the reference rate for new short-term loans, effectively lowering the prevailing rate from 4.35% to 4.15% (in the process further pressuring bank net interest margins), on the first day of the new 2020, the PBOC unveiled widely expected another boost for the slowing Chinese economy: the central bank announced that starting Jan 6, it will lower the required reserve ratio (RRR) - or the amount of money banks are required to have on hand - by 50bps for commercial lenders, in the process releasing about 800 billion yuan ($115 billion) in liquidity from the cash-strapped financial system.

Currently the required reserve ratio is 13% for large banks and 11% for small banks. The cut, which is the first since September, will bring the blended reserve ratio for Chinese banks to the lowest level since October 2007.
The 50bps RRR cut is meant to help banks reduce their lending rate to businesses, the PBOC said in a separate statement, which is ironic because while on one hand the PBOC pressures commercial banks by ordering them to lower the amount of interest they can charge customers by 20bps (with the benchmark rate recalibration), on the other it boosts systemic liquidity to offset the adverse effects of its first action, something we predicted would happen earlier this week, to wit:

... with more than half of China's banks failing a recent central bank stress test, the only guaranteed outcome from this weekend's effective rate cut is that, paradoxically, it will only accelerate the rate of failure of China's already cash strapped, and in many cases insolvent, banks. As such we expect that the PBOC will promptly follow through with another RRR cut to offset the adverse side-effects of this particular rate cut, by injecting more liquidity in the banking system.

Of course, it wasn't just us predicting an imminent RRR reduction: the cut was first signaled by Chinese premier Li Keqiang in December 2019. It’s also in line with market expectations that the PBOC will increase funding to the financial system in January to ease a liquidity crunch caused by rising local government debt sales and increasing cash demand during the Spring Festival holidays.
As a reminder, two weeks ago we warned that China is facing a potentially destabilizing "liquidity hole" of 2.8 trillion yuan ($400 billion) in January as people across the nation will withdraw cash for the Lunar New Year holiday, which this year falls on Jan 25. China’s most important annual holiday is a time when companies and individuals typically need large amounts of cash on hand to pay bonuses, clear debts and cover other expenses. In addition to seasonal cash needs, China's bond market also faces a major maturity deluge, as more than 2 trillion yuan in notes mature in early 2020, and fresh debt to refinance the borrowing thus shoring up economic growth will probably start hitting the market soon.

Sure enough, in addition to offsetting the reduced net interest margin, the PBOC said that the injection will be offset as banks provide more cash to the public before the Spring Festival, and the overall liquidity level at banks will be kept stable. "Prudent monetary policy stance remains unchanged," it added.
It was fears about an impending liquidity shortfall that sent China's 1Month SHIBOR to the highest level in one year, briefly touching 3% a few days ago.

However, now that China is engaged in a delicate balancing act, on one hand reducing the amount of cash banks can earn by lending money to customers, and on the other releasing systemic liquidity, the question is whether the PBOC's latest efforts to stimulate the economy will destabilize the banking sector further.

Addressing just this, the PBOC said the planned reduction will save about 15 billion yuan in funding costs for banks in a year, indicating that the benchmark loan prime rate will likely be lowered as banks reduce their submissions for the rate’s calculation in late January, which in turn will force the PBOC to cut the RRR further, resulting in an even lower loan prime rates and so forth, which brings to mind a recent striking op-ed published in the Global Times, which predicted that China would be the next major country to cut rates to zero.

More at: https://www.zerohedge.com/markets/ch...liquidity-hole

[Swordsmyth]

Sources told Reuters Thursday that China is blocking a proposed merger to connect the Shanghai and London stock exchanges because of escalating political tension.
The sources, which include government officials and people on the transaction team working to solidify the Shanghai-London deal, said the suspension via China was politically driven in response to Britain's support of pro-democracy demonstrators in Hong Kong.
One source told Reuters that "It's not only a big blow to the companies looking to broaden the investor base via listings in London, but also to China's links with global markets."



More at: https://www.zerohedge.com/markets/ch...hong-kong-rift

[Swordsmyth]

Offering yet another reminder that the city's economy has been reduced to a mere shadow of its former glory, Hong Kong retail sales have posted yet another double-digit drop as tourism continued to decline in November even as the pro-democracy movement started to fade from the front pages of Western periodicals.

By value, retail sales retreated 23.6% in November from the same period a year earlier, extending the city's record-breaking run of declines to ten months. By volume, sales contracted by 25.4%. It's the latest indication that Hong Kong's economy is suffering from a worsening recession with no end in sight.



Meanwhile, overall visitors to HK plunged 56% YoY to 2.65 million during the month of November, the lowest reading since February 2011. It was the biggest monthly drop on record, according to the SCMP, the biggest English-language newspaper in HK.
That doesn't bode well for shares of luxury-goods giants like LVMH (the new parent company of Tiffany & Co.), which have already been battered by Hong Kong's troubles.
Hong Kong Financial Secretary Paul Chan Mo-po has warned that the special autonomous region of the People's Republic of China should expect its economy to contract by 1.3% for the whole financial year thanks to the fallout from the protests, as well as the US-China trade war.


More at: https://www.zerohedge.com/markets/ho...ession-worsens

[bv3]

That word imminent--I don't think it means what you think it means.

[Swordsmyth]

That word imminent--I don't think it means what you think it means.

Time is relative, we are discussing time on a historical scale.

You would have doubted the collapse of the USSR the year before it happened.

[bv3]

[Swordsmyth]

China is headed for the recycle bin.

[bv3]

[Madison320]

Debt is money spent in the present and an obligation to be repaid in the future. Given this, I thought I'd contrast China's population of young versus their obligation to be repaid in the future.

I'm wondering if that debt number includes their assets. If you owe 10 trillion but someone else owes you 11 trillion, you're not really in debt. China holds a lot of foreign debt and their citizens have very little private debt from what I've heard. I'm not saying China doesn't have problems but compared to us I think their debt situation is tiny.

[Swordsmyth]

I'm wondering if that debt number includes their assets. If you owe 10 trillion but someone else owes you 11 trillion, you're not really in debt. China holds a lot of foreign debt and their citizens have very little private debt from what I've heard. I'm not saying China doesn't have problems but compared to us I think their debt situation is tiny.

They have been wasting their assets and their public has been starting to go deep into debt.

If you read in this thread you will find the info about it.

[SummersEve]

China will never implode.

Why? Because they have mad skilz

[Swordsmyth]

Cause and effect. Action, reaction. As China cracks down on shadow finance, private companies and state giants alike are learning that the karmic wheel of money can come to a screeching halt.In April 2018, China unveiled far-reaching rules for its financial industry as part of an effort to curb risk. Banks were asked to spin off their wealth-management arms, which had helped funnel credit to an overburdened private sector, and stick to traditional, boring (read: low-yielding) loan books. They were given three years to adopt the new rules, ending in December 2020.
This was a declaration of war on shadow financing. The industry shrank by 1.6 trillion yuan ($229.1 billion) in 2019, after contracting by 2.9 trillion yuan a year earlier.

The policy change has already inflicted some damage. Onshore bond defaults hit a record high for two straight years. In 2019, most of them came from private-sector borrowers struggling to refinance, while state-owned enterprises emerged largely unscathed.
As we enter 2020, however, China’s draconian reforms could start to backfire on the state, too.
For starters, a shadow-banking crackdown has severely restricted Beijing’s fiscal prowess. To boost infrastructure spending, officials have been allowing local governments to issue special-purpose municipal bonds at a record pace, even bringing forward the quota for 2020. Yet infrastructure spending remains anemic, growing even slower than the overall economy.
Why would this be? Since 2015, Beijing has been relying on public-private partnerships to build roads and railways. But private money has essentially evaporated after the new rules prevented wealth-management products, typically short-term instruments, from investing in longer-term projects. Meanwhile, China’s new municipal bond issues, at roughly 2 trillion yuan a year, can’t meet the nation’s annual infrastructure spending of 17 trillion yuan.
Beyond a few hiccups, faith in China’s public-sector bond issuers remained relatively unshaken in 2019. Every once in a while, a local government financing vehicle would be a few days late in its coupon repayment, but Beijing hasn't allowed these municipally run, off-balance-sheet shell companies to default. Ever.
This may not be such a sure bet in 2020. LGFVs have amassed a huge pile of debt over the past decade: 33 trillion yuan, according to S&P Global Ratings. Of that, only about a quarter is in bonds; the rest comes in the form of bank loans and non-standard credit. In other words, private enterprises aren't the only ones dipping into the shadow-banking well. Impoverished local governments are, too.
Many of the 1,800-plus LGFVs have deep relations with shadow banks, data compiled by Huatai Securities Co. show. In Guizhou province, for example, these entities get 20% of their financing from non-standard sources of credit. In Tongren, a city in the region, that figure is 72%. This should come as no surprise: As providers of public services and infrastructure, LGFVs often struggle to generate enough cash flow, and even state-owned banks are holding back credit from the poorest areas.
As we witnessed in 2018 and 2019, private enterprises have no choice but to default when one of their key funding channels is cut off. Unless China takes a policy U-turn, the same phenomenon may repeat with municipals’ financing vehicles.
By now, the realization that banks prefer state-linked entities has become deeply ingrained in China’s business community. So how do private businesses get cheap credit? By pretending to be affiliated with the government. Already, quite a few “fakes” have blown up in investors’ faces.
China Minsheng Investment Group Corp., for example, repeatedly tested bondholders’ nerves last year. The company has managed to amass 232 billion yuan in debt in just four years, largely thanks to its status as the brainchild of Premier Li Keqiang and its pledge to serve “national strategy as its mission,” according to a 2016 bond prospectus. Yet the company remains privately held.
Or consider Peking University Founder Group, which surprised traders in December with a late bond payment. Investors have long associated the conglomerate — whose business spans finance, real estate and commodity trading — with the Ministry of Education. As a legal tussle unfolds, though, many are starting to question the strength of Founder’s state ties. The company could be one of the biggest corporate defaults in China: It has 23 onshore notes outstanding, with two-thirds, or 24 billion yuan, due over the next year.
Similar soap operas will continue to play out because being a fake state-owned enterprise is the only way to get good credit. And Beijing will have no choice but to step in, or risk its own reputation.
What’s missing in all this is why China’s biggest state-owned banks aren’t filling the void. One explanation is that they have little incentive. These lenders have remained profitable, with the big four earning almost 1 trillion yuan in net profit in the last year. Lending to private businesses requires grunt work, and credit officers simply aren't interested. They’d rather write loans to state giants such as China Mobile Ltd. and go back into hibernation.

More at: https://finance.yahoo.com/news/china...220037888.html

[Swordsmyth]

Weeks after switching on the machines of a new production line near Bangkok, veteran manufacturer Larry Sloven has a quip for the stream of companies leaving China: “Elvis has left the building.”

After three decades of building up manufacturing bases in China, Sloven helped Capstone International Hong Kong, of which he is managing director, wind one down. Costs were rising before the trade war
, but a 25 per cent tariff on the lighting products the company exports back to the United States helped accelerate a shift that was set in motion 18 months ago – moving its production base to Thailand.

Now, despite the fact that lead time to hit the shelves in US stores can take up to 40 days from Thailand, almost twice as long as from China, few retailers are willing to pay the premium price that needs to be charged to keep production in Guangdong.

“Even if the tariffs went away tomorrow, most people are not coming back,” he said. “But I do not believe that most retailers in America understand this process of what a supplier must go through. Nobody will pay the price.”


This is a situation playing out in boardrooms around the world, as international companies accept the reality that the US-China phase one trade deal will not materially improve the lay of the land for their Chinese-based operations.

Rising labour and environmental costs, a head-spinning regulatory environment, the ever-looming threat of more and higher tariffs, along with a sharp increase in the perception of risk associated with living and working in China mean that the manufacturing exodus
that began at the tail end of the last decade will continue well into this one.

There is acceptance that the “Goldilocks Zone” provided by China’s industrial heartlands for the last 30 years – in which the mixture of costs, quality, human resources and infrastructure was just right – will not be matched in India, Indonesia, Malaysia, Mexico, Thailand, Vietnam or anywhere else.

“This is the right stepping stone, just the start,” Sloven said of Thailand. “I believe that Vietnam is already full, it's like having a ticket at a bakery, you have to wait in line. Right now, there's no line in Thailand, but it will get full.”

More at: https://www.scmp.com/economy/china-e...e-2020-despite

[Swordsmyth]

Passenger car vehicle sales in China fell yet again in December, plunging 3.6% to 2.17 million units, according to the China Passenger Car Association.
This marks the 18th drop in the past 19 months for the country, which feels to be single-handedly spearheading a global recession in the industry. For the full year, sales in China declined 7.5%, marking the second straight annual decline.

Automakers continue to struggle with a slowing economy and tariff uncertainties, despite "Phase 1" of the U.S./China trade deal supposedly being finished (even though it still has not been signed), according to Bloomberg.
GM said on Tuesday that its sales were down 15% in China and said that pressure into 2020 would likely continue.
But, some analysts say there's reasons for optimism: namely, that the pace of declines has slowed for four months in a row as comps have become easier. This will only hold true heading into 2020, where 2019's comps will be much easier to catch than those of years prior, while the auto market was booming.

The China Association of Auto Manufacturers predicts that vehicle sales will drop 2% in 2020, marking a third straight annual decline. Sales fell 7.5% in 2019 and 6% in 2018.
Well, if that's what you want to call progress...


More at: https://www.zerohedge.com/economics/...fall-19-months

[Swordsmyth]

China's yuan weakened on Tuesday and the Japanese yen reversed earlier losses after a report that the United States will keep tariffs on Chinese goods through the U.S. election hurt risk sentiment.The news came a day before the signing of a preliminary U.S.-China trade agreement to ease an 18-month-old trade war.
Bloomberg News reported that the United States will review and remove existing tariffs no sooner than 10 months after the deal is signed.


The yen <JPY=> gained to 109.92 after rising to 110.2, the most yen per dollar since May 23.
The offshore yuan <CNH=> weakened to 6.89, after rising to 6.87 per dollar, the strongest since July 11.

More at: https://finance.yahoo.com/news/yen-s...005509954.html

[Swordsmyth]

China's growth outlook for the year is one of stabilization, with growth expected to slip under the 6% mark. Still, there's a significant risk that a disorderly unwinding of debt could slow the economy even further.
Over the last decade, China has been responsible for 60% of the world's debt creation – and with the country continuing to slow, that doesn't bode well for a massive global recovery that equity markets have already priced in.

To get a better view of China's economy, we turn to Fathom Consulting, who developed the China Momentum Indicator 3.0 (CMI 3.0) that includes twelve measures of economic activity, including retail sales, unoccupied housing, and net trade.
Fathom has had a deep distrust for China's official GDP data and created CMI 3.0 as an alternative measure of China's economic activity.
CMI 3.0 prints around 4.7%, has stabilized since the middle of last year. There's no indication that China's economy will significantly turn up in early 2020, which means the global economy could continue to stagnate.

Slowing China has also weighed on crude oil prices.

Auto production in China will continue to slow with a decelerating economy.



More at: https://www.zerohedge.com/markets/ch...assive-rebound

[Swordsmyth]

China Growth Slows To 29 Year Low In 2019 Despite Q4 Rebound

[Swordsmyth]

New birthrate figures show that China has so far failed to reverse the effects of its longtime one-child policy — a change that policymakers say is necessary to forestall the long-term economic consequences of an aging and shrinking population.
The National Bureau of Statistics of China released the new data on Friday, the same day it announced that the country's GDP growth has fallen to its lowest level in nearly 30 years.
Last year, there were 10.48 births per 1,000 people, the lowest birthrate since 1949, the year the People's Republic of China was founded. The number was down from 10.94 the year before.


Experts say that improved education and higher incomes in China have led to delayed marriage and childbirth and that once-strict government restrictions on births have made one-child households the norm.
"China should have stopped the policy 28 years ago. Now it's too late," Yi Fuxian, a senior scientist at the University of Wisconsin, Madison and a longtime critic of the country's family-planning policies, told The Guardian last year.


By 2050, a third of China's people will be 60 or older, according to current projections, placing a significant burden on the government to care for the elderly.
Tariffs pinch economic growth
Meanwhile, the world's second-largest economy cooled to its slowest pace in nearly three decades, with China posting year-on-year growth of 6.1% last year — a further sign that the protracted trade war with the U.S. has taken a toll.
The pace of growth in gross domestic product for 2019 was down from 6.6% the previous year and marked the smallest annual increase since 1990.

More at: https://www.npr.org/2020/01/17/79723...early-30-years

[Swordsmyth]

So much can change in just 24 hours.
It was just yesterday that China's top twitter troll and Beijing propaganda voice to the west, Global Time Editor in Chief Hu Xijin was downplaying the risk from the coronavirus outbreak, comparing it to the SARS epidemic in 2003, and saying that "during SARS epidemic, even many medical staff contracted virus and died of it. It doesn't look the same this time."

Chinese society is mobilizing to deal with the new coronavirus. But its risks of human-to-human transmission and fatality rate appear lower than SARS. During SARS epidemic, even many medical staff contracted virus and died of it. It doesn't look the same this time. https://t.co/k43u1R4d5c
— Hu Xijin 胡锡进 (@HuXijin_GT) January 20, 2020

Oops, because just a few hours later, we got confirmation that at least 15 medical staff had in fact contracted the virus which now appears to be spreading human-to-human, as six people have died among 291 confirmed cases in China, eliminating any attempts to further downplay the significance of the coronavirus epidemic which has reportedly infected hundreds of people across China.
So in a dramatic 180-degree reversal, the same twitter troll now had an entirely different message to the word: not only is "the epidemic expanding" and "concerns are mounting", but more importantly, "It is inevitable that people will cut their trips during Spring Festival and holiday consumption will be hit."

Coronavirus cases have been found in other places out of Wuhan, Hubei Province, indicating the epidemic is expanding. Concerns are mounting. It is inevitable that people will cut their trips during Spring Festival and holiday consumption will be hit.
— Hu Xijin 胡锡进 (@HuXijin_GT) January 21, 2020

So what happened? It appears Beijing decided to not let a perfectly good crisis go to waste, and just as "trade war" was used as a 2019 scapegoat on which to blame the slowdown in the economy, an economy which is rapidly slowing down for vastly different reasons, it will now blame the coronavirus epidemic on the ongoing slowdown of the Chinese economy.
The reason reason for the slowdown? China's ghastly debt load of over 300% of GDP...



More at: https://www.zerohedge.com/economics/...virus-epidemic

[Swordsmyth]

With phase-one talks signed last week, China's GDP growth in 2019 plunged to a 29-year low amid massive credit stimulus that has widely been ineffective to boost growth but has somewhat stabilized the economy.

China's largest utility company State Grid has warned that the rate of economic growth in the country is expected to slide to 4% in the next four years.

There was even a report on Tuesday showing China has already blamed the 2020 economic slowdown on the coronavirus epidemic that has already killed nine with at least 440 people infected in the country and spreading across the region, along with a new case in the U.S.
The Communist Party of China has been quick to blame the slowdown on external factors, such as the trade war and other protectionist policies of President Trump, rather than their failures of amassing more than $40 trillion of debt, nearly 304% of GDP.

Coronavirus cases have been found in other places out of Wuhan, Hubei Province, indicating the epidemic is expanding. Concerns are mounting. It is inevitable that people will cut their trips during Spring Festival and holiday consumption will be hit.
— Hu Xijin 胡锡进 (@HuXijin_GT) January 21, 2020

Now we're starting to get more local data, on a provincial level, that shows many regions and municipalities have cut their 2020 growth targets over the prior year, reported Reuters.
About 22 provinces have slashed growth targets this year, including Beijing, Guangdong, Zhejiang, Henan, Hainan, and Fujian.
Beijing, Shanghai, and Guangdong have all cut their target of 6.5% to 6% growth to about 6% in 2020, in line with the national goal of 6%.
Local government data shows at least 11 provinces have missed their 2019 growth targets and are expected to underperform this year.


The northeastern province of Heilongjiang will range around 5% growth for this year, with the Tibet Autonomous Region to see about 9%.

More at: https://www.zerohedge.com/markets/ch...wdown-persists

[Swordsmyth]

As the numbers of infected and dead soar exponentially, China has been forced to lock down cities and shutdown factories for the next several weeks. The outbreak of the coronavirus will likely damage first-quarter economic figures for the country, reported the Financial Times.
As of Monday, China's coronavirus outbreak has so far infected about 3,000 people, where the death toll has climbed to 80 - giving the virus a roughly 5% mortality rate.

China has ordered several manufacturing hubs and other centers of the industry to remain closed for the next one to two weeks.

One of those manufacturing hubs is Suzhou, a city west of Shanghai has told millions of workers not to return for at least one week. The industrial region is home to the world's largest factories, including iPhone contractor Foxconn, Johnson & Johnson, and Samsung Electronics.

The virus outbreak is occurring as an industrial slowdown has sparked one of the slowest growth rates in nearly three decades. This will be a significant challenge for President Xi Jinping amid fears of a hard landing.
Julian Evans-Pritchard, a senior China economist at Capital Economics, has suggested that "coronavirus makes a pronounced slowdown even more likely and if the disease is not brought under control quickly, then even our downbeat forecasts may turn out to be too high."
Michael Pettis, a finance professor at Peking University and senior fellow at Carnegie-Tsinghua Center, said the economic impact depends on how coronavirus spreads throughout China.
Pettis said consumption is now under pressure as "people are not going out to restaurants and bars."

More at: https://www.zerohedge.com/markets/ch...virus-outbreak

[Danke]

I think a lot of those factories were already gonna shut down during the Chinese New Year.

[Swordsmyth]

I think a lot of those factories were already gonna shut down during the Chinese New Year.

But they may stay shut down for much longer now.

[Swordsmyth]

China’s financial markets will remain shuttered until Feb. 3 due to Coronavirus fears, according to announcements from the Shanghai and Shenzhen exchanges.

The move comes with the outbreak of the deadly Coronavirus claiming more than 100 lives in China. Stocks tumbled as oil trade entered bear market on Monday, leaving investors around the globe worried with many fearing it may lead to a global recession.
The Chinese government is trying to delay panic selling until it can get the massive outbreak under control. But this strategy is unlikely to work because of the sheer impact the virus is already having on the nation’s economy. Investors can expect to see a large correction in the Chinese indices when (and if) trading resumes next Monday.

In response to the crisis, China has decided to extend the Lunar New Year break on trading by four days. This looks to be an attempt to prevent panic selling due to the outbreak. However, the Feb. 3rd date for a resumption of trading may be delayed because Shanghai authorities have separately advised companies not to resume work until at least Feb. 9th. The U.S listed China Large-Cap ETF (NYSEARCA:FXI) dropped 4% on Monday.

More at: https://www.siasat.com/coronavirus-c...feb-3-1807717/

[ghengis86]

My suppliers say a minimum delay of one week after CNY ends. CNY has been extended to Feb 2 up to Feb 9, depending on the city/province. Freight shipments won’t be affected per se; but if everyone is at home, or can’t travel back from CNY holiday, no employees available to load boats or planes.

The economic impact is potentially huge.

[Swordsmyth]

My suppliers say a minimum delay of one week after CNY ends. CNY has been extended to Feb 2 up to Feb 9, depending on the city/province. Freight shipments won’t be affected per se; but if everyone is at home, or can’t travel back from CNY holiday, no employees available to load boats or planes.

The economic impact is potentially huge.

And the duration could continue to grow since they have yet to get a handle on it.

[Swordsmyth]

The Chinese territory of Macau has become a near-ghost town during what is typically the busiest time of year in the world's biggest casino hub, after authorities announced a raft of measures to keep visitors away and contain the new coronavirus.The local government late on Tuesday said it would curb its individual visit scheme through which visitors gain entry from mainland China, days after it suspended inbound package tours. Since Friday, arrivals have dropped 69%, latest figures showed.
The steps come as deaths from the coronavirus reached 132 in China on Wednesday with 1,500 new cases. The flu-like virus emerged late last year in the eastern city of Wuhan and cases have since been reported worldwide including seven in Macau.
The virus has added to concerns in the former Portuguese colony over the impact of a slowing Chinese economy and anti-government protests in neighbouring Hong Kong.
However, the outbreak also coincides with the Lunar New Year holiday during which Macau seasonally enjoys record visitation, prompting analysts to forecast a decline in gaming revenue of at least 30% for as long as visiting restrictions are in place.
Casino operators' share prices plunged on Wednesday, by as much as 6% for MGM China Holdings Ltd <2282.HK>, 5.7% for Sands China Ltd <1928.HK>, 4.8% for Wynn Macau Ltd <1128.HK> and 4.7% for Galaxy Entertainment Group Ltd <0027.HK>.
The special administrative region is China's only location where casino gambling is legal, and over 90% visitors come from Greater China.
Transport links with mainland China have been curtailed, however, with dozens of flights and ferry services cancelled. The local government has also extended the Lunar New Year break to the end of the week, keeping banks and businesses closed.

More at: https://news.yahoo.com/china-virus-t...080739966.html

[ghengis86]

And the duration could continue to grow since they have yet to get a handle on it.

I figure a few months. They seem to have a decent handle on it, insofar as measures to prevent the spread, quarantining 60 million people, travel bans, etc. in Wuhan/China in general.

The problem is it was done way to late. What they don’t have a handle on is how truly F’d things could get when you’ve sent out millions of potential carriers out into the world, who are contagious without symptoms, and then essentially ban their return. Where else is it? How do you know? By the time bodies start dropping and more quarantines are put in place, it’s too late again. Barn door, horse, etc.

Quarantine is really the only way to stop the spread.

We probably won’t see a disruption in supply chain for another 7-14 days as the material that is already moving makes its way through. But we’re already an extra week past the CNY, which is factored in every year. Things stay closed over there, we’ll start to feel it here soon.

Sidebar: we’ve already set up domestic replacements and should be good (unless $#@! goes pandemic and everyone panics all at once!)

[Swordsmyth]

The flow of oil traveling from Latin America to China has stopped in the wake of the deadly outbreak of the coronavirus that has sunk oil prices to three-month lows, with no oil making its way from Brazil or Colombia to China since last week, according to Bloomberg.

More at: https://oilprice.com/Latest-Energy-N...-To-China.html