Italy, Iran, South Korea: Coronavirus pandemic fears grow as cases spike outside China

February 24, 2020, 11:05 AM UTC

The emergence of new centers of coronavirus infection outside of China is fueling concern the outbreak could become a global pandemic, rattling financial markets and stoking anxiety over the potential hit to economies.

While the outbreak in China appears to be becoming more predictable, the virus is taking hold in other parts of the world, with increasing infection and death tolls in South Korea, Italy and parts of the Middle East sparking the most alarm.

These bursts of infections could drive a second peak in an epidemic that’s already killed more than 2,400 in China and severely disrupted global business and travel activity.

In Italy and Iran, the mortality rate from the pneumonia-causing virus appears to be much higher than that in China, hinting at hundreds or thousands of still-undiscovered cases of infection. In South Korea, which has the most in-country cases outside of China, the government raised its public health alert to the highest level, allowing it to quarantine cities, delay the start of school and restrict people’s movements.

“At the moment, the death rate is running at about 3%,” Paul Hunter, a professor at the University of East Anglia’s Norwich Medical School, said in a televised interview. “That is almost certainly going to rise.”

Stocks and higher-yielding assets retreated across Asia Monday, as investors grappled with the implications of the widening outbreak.

Not Just China

“There is now very justifiably concern that this is a global pandemic and not just a China issue,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “The markets were taking consolation earlier on from the maturing spread cycle in China, which may no longer be the pertinent metric to follow now if it is the spread outside of China that’s causing concern.”

In China, still home to the vast majority of the almost 80,000 cases of infection that have emerged globally, there are some signs the outbreak has stabilized, and the economy is starting to move past the state of stasis that’s gripped it since the Lunar New Year holiday.

Tourists wearing protective facemasks and a Carnival mask visit the Piazza San Marco, in Venice, on February 24, 2020 during the usual period of the Carnival festivities which the last two days have been cancelled due to an outbreak of the COVID-19 the novel coronavirus, in northern Italy. - Italy reported on February 24, 2020 its fourth death from the new coronavirus, an 84-year old man in the northern Lombardy region, as the number of people contracting the virus continued to mount. (Photo by ANDREA PATTARO / AFP) (Photo by ANDREA PATTARO/AFP via Getty Images)
Tourists wearing protective facemasks and a Carnival mask visit the Piazza San Marco, in Venice, on Feb. 24, 2020.

While mistrust lingers over shifting data from Hubei province, new cases of infection released daily appear to have stabilized at several hundred, while the same metric at the China-wide level has been declining for three days.

Crises Elsewhere

There has also been an uptick in the number of recoveries from the virus in China and other Asian cities like Singapore. In the rest of China outside of Hubei, more than half of all cases are now declared recovered and discharged from hospital: 7,996 patients have officially recovered out of 12,863 total cases of infection in the country excluding Hubei. In Singapore, fully-recovered patients now number 47 out of a total of 86.

Underscoring the shifting mood in China, six provinces — including manufacturing center Guangdong — downgraded their emergency threat levels on Monday, paving the way for restaurants and shops to re-open. Local factories, where month-long shutdowns have disrupted global supply chains for everything from watches to lobsters, are coming back to life.

Still, China appears to be at a dilemma over how to re-start its ailing economy without prematurely lifting the draconian measures that’s managed to slow the virus’ spread. In an unusual public flip-flop, Wuhan announced that there would be some easing of quarantine over the city that’s been in place since Jan. 23. Hours later, the statement was deleted and another saying that the announcement was “unauthorized” was issued. The quarantine remains in effect.

And the cautious optimism over the situation in China is overshadowed by the growing crises in other regions. South Korea now has more than 750 confirmed cases of the virus, and will send 1,000 hospital beds to Daegu, ground zero for the virus’s spread there. Screening will be expanded to all residents who show symptoms of infection in the city, with Vice Health Minister Kim Ganglip telling reporters Monday there was a high risk of “nationwide spread” if they aren’t able to contain the disease.

South Korea warned the epidemic poses a risk to its fragile economic recovery as airlines halted flights and travel agencies canceled group tours to the country. Samsung Electronics Co. and LG Electronics Inc. are among major companies taking precautions as the outbreak rapidly gathers pace.

”I don’t think it can be contained and there is a long way to go before reaching the turning point,” said Ben Cowling, a professor of epidemiology at Hong Kong University. “The roles will soon be reversed — countries that had banned travel from China may soon see China ban travel from them.”

Restaurants Closed

Italy is becoming a virus hotspot, raising alarm levels given the European Union’s policy of free movement of people and goods within the 27-nation bloc. The Italian government canceled the remaining days of the Venice Carnival at the weekend and universities and restaurants have been closed with three deaths and at least 140 infections recorded.

Austria halted train traffic from Italy on Sunday as an area of 50,000 people near Milan was locked down amid the surge in cases.

“I suspect we’re going to see quite a few more cases reported from Italy,” Norwich Medical School’s Hunter said. “Whether the Italians will manage to contain the outbreak or whether it has already spread more widely throughout Europe, only the coming days will tell.”

In Iran, reports there of eight deaths out of 43 infections — which equates to a mortality rate of 18.6% — sparked widespread concern that the extent of the virus’ spread within the closed-off country is being covered up. The mortality rate in China, where there is more than 76,000 cases, is 3.2%.

Kuwait and Bahrain reported their first cases of the virus on Monday, linked to people who traveled back from Iran.

At a weekend meeting of Group of 20 finance chiefs in Saudi Arabia, concerns over the virus’s spread dominated discussions. Kristalina Georgieva, the International Monetary Fund’s managing director, said the outbreak would trim 0.1 percentage points from the IMF’s global growth forecast, but that it’s also looking at more “dire” scenarios.

“We do not know what will be the next steps, indeed if the epidemic will turn to pandemic or not,” French Finance Minister Bruno Le Maire told Bloomberg TV, referring to the official definition of a pandemic as an outbreak spreading across multiple continents. “But we have to be prepared.”

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