Commentary on Political Economy

Friday 31 January 2020

Is China’s Belt And Road Already In Retreat?

More From Forbes
When I first began traveling the corridors of China’s Belt and Road Initiative (BRI) in the spring of 2015, there was an almost ubiquitous sentiment of hope and excitement across the network. I would be paraded out to look at massive nascent logistics and industrial zones, new cities and fledgling financial districts by project managers convinced that they were building “the next Dubai.” Most of that time what I was looking at were just empty fields or barren expanses of reclaimed landairports without flights or ports without ships, but I was almost invariably told how this would all change very soon. Today, nearly five years later, I have to admit that many of these claims were wishful thinking.
When China’s BRI was first announced in 2013, it was generally viewed as a much-needed new avenue of investment that could help fill Asia and Africa’s ever-growing infrastructure gap as well as provide a new avenue of growth for the stagnating economies of Europe. China stepped up in the global arena and earmarked billions of dollars for infrastructure and technological development, and then began rapidly deploying this money to dozens of major projects all over the world.
The BRI was easily absorbed by the international community then, as it appeared to be moving in the same direction as other similar initiatives, such as Kazakhstan’s Nurly Zhol infrastructure revitalization plan, India and Russia’s North-South Transport Corridor, the EU’s TRACECA Corridor, and, later on, India and Japan’s Asia-Africa Growth Corridor. It seemed as if the entire Eurasian and African regions of the globe were on the same page, investing billions of dollars into infrastructure development and ushering in the next phase of globalization. But in 2020, not even a decade since the initiative was announced, China’s Belt and Road is already showing signs of retreat.
“Six years and many billions of dollars later, it is still a blurred vision in need of a comprehensive and coherent implementation strategy,” said Plamen Tonchev of Greece’s Institute of International Economic Relations before giving the BRI’s progress up to here a letter grade: “D, at best.”
To be sure, there has been some success along the Belt and Road. Legions of Chinese factories have moved into countries like Vietnam, Cambodia and Indonesia, which Bruno Maçães, the author of Belt and Road: A Chinese World Order, described as an “economic earthquake” which shows that phase-I infrastructure building can lead to phase-II industry within the context of the BRI. Greece’s struggling Piraeus Port was taken over by China Ocean Shipping Company (COSCO) in 2016, and transformed it into the second-largest port in the Mediterranean. Development of an entirely new 30-plus line freight train network between China and Europe has given birth to a new transport option between expensive air and slow sea, and has sparked the rise of logistics and industrial zones in western China, Kazakhstan and Poland.
However, in this time of general economic prosperity, where nearly every emerging market seems to have dove head first into infrastructure construction and more money than ever is available for development, the Belt and Road’s successes are often marginalized by its failures.
“It's still difficult to find places where you can find huge transformation,” Maçães pointed out. “You can see the direction and the trend but … most of them so far are logistics, so they're not so visible in daily life.”
In the opening phases of China’s Belt and Road, there was a proverbial feeding frenzy of countries hungry for Chinese funding and construction know-how to turn their mega-project dreams into realities. Countries like Sri Lanka, Malaysia, Pakistan, Djibouti and Cambodia all jumped in with two feet, welcoming China—and their billions—with open arms. But what happened? Many of the early projects failed, were localized, or have gone stale, sitting idle somewhere between white elephant and construction site. Multiple government administrations in BRI countries were unexpectedly voted out of power by opposition parties critical of their China dealings, as billions of dollars worth of half-finished BRI projects were sent back to the drawing board.
“I think we still haven’t really discovered how many white elephants are roaming along the Belt and Road from those earlier years,” said Jonathan Hillman of Washington, D.C.’s Center for Strategic and International Studies, “and we might not until there’s an economic downturn.”
In 2020, the BRI seems to be downshifting. According to Chinese government data, China’s overseas investment growth is in decline, peaking at 49.3% year-on-year growth in 2016 and then retracting by 23% in 2017 and another 13.6% in 2018. In the first half of 2019, Chinese FDI rose a mere 0.1%. Moody’s, the international credit rating agency, predicts that this downward trend will continue over the coming years due to an “increased awareness” of the risks that both partner countries and China itself takes when engaging in such large-scale development in risky, unproven markets.
“It’s possible that we’ve seen ‘peak’ Belt and Road,” Hillman explained. “The early years were all about expansion—in sheer numbers of projects, geography and functionally. Project activity has now slowed down, likely due to both internal and external pressures. Chinese foreign exchanges reserves are down, and Chinese officials may have become somewhat more concerned about risk levels.”
These concerns about risk have been backed up with action. In early 2019, Pakistan cancelled a $2 billion BRI coal plant and then vowed to cut back the loans that they’ve taken out from China for new rail lines by another $2 billion. Myanmar dramatically scaled down their Chinese-backed Kyauk Pyu deep-water port project from $7.3 billion to $1.3 billion due to fears of excessive debt. Sierra Leone outright cancelled a $400 million airport project that they started with a Chinese firm. The $10 billion Sino-Oman Industrial City is little more than a fence around 11 square kilometers of parched and barren desert. Even with 49% Chinese ownership, Khorgos Gateway, once the up-and-coming central station of the Silk Road Economic Belt, is still an under-performing dry port in the middle of a 550-hectare empty field that is supposed to pass as a special economic zone. Even the sprawling China to Europe rail network, a miracle of international cooperation, hasn’t been able to obtain financial viability, relying on Chinese government subsidies, which Beijing says they are going to start cutting.
The problem, in many cases, is a lack of long-term funding. In 2018, the deputy head of the Development Research Center of China’s State Council even admitted as much, saying that the BRI’s funding gap is in the ballpark of a half-trillion dollars per year. In 2018, the former president of China’s Export-Import Bank stated bluntly that most Belt and Road countries don’t have enough money to fund their projects or repay their debt.
“Recipient countries are viewing projects with greater scrutiny [as far as] debt sustainability, environmental impacts, and overall economic viability,” Hillman said. “Both sides are learning, in other words. This smaller pipeline of projects could be a good thing for all involved—if it forces greater attention and prioritization.”
We also must look at how much money China really has to continue funding extremely expensive infrastructure projects in other countries. With many BRI nations no longer thirsty for Chinese loans—the main source of Belt and Road funding to date—the time is near when China is going to have to start putting up genuine FDI if their continent-spanning geo-economic empire is going to keep moving forward. But where this money is going to come from is the question. The U.S.-China trade war took a massive toll on China’s domestic economy and the impact of coronavirus is as yet untold—although it’s predicted that it’s going to be significant. China has also entered the typical doldrums of an upper-middle-income economy—the new normal of 6% GDP growth will turn into a new normal of 5% will turn into a new normal of ... (you get the idea).
However, while we can look at the failed and stagnant projects, the debt traps, the financial implosions, the fiascos, the environmental destruction and the wasted resources that have defined the early years of the Belt and Road, we must keep in mind that all of this can ultimately be seen as lessons. When China first leapt onto the global stage as a development partner, it did so on its own terms and, in many ways, it made its own rules. That did not work out so well. But the recent retraction of overseas investments and projects may be demonstrative of a change in strategy and a move towards caution at a time when the world is becoming far more economically volatile than when Xi Jinping stepped onto that stage in Kazakhstan and began talking about belts and roads for the first time.
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Requiem for a Dream
Britain exits Europe. It will be poorer, above all in its shriveled heart.

Opinion Columnist
·        Jan. 31, 2020, 7:35 p.m. ET

I have covered many stories that marked me over the past 40 years, in war zones and outside them, but none that has affected me as personally as Britain’s exit from the European Union. Brexit Day, now upon us, feels like the end of hope, a moral collapse, a self-amputation that will make the country where I grew up poorer in every sense.
Poorer materially, of course, but above all poorer in its shriveled soul, divorced from its neighborhood, internally fractured, smaller, meaner, more insular, more alone, no longer a protagonist in the great miracle of the postwar years — Europe’s journey toward borderless peace and union. Britain, in a fit of deluded jingoism, has opted for littleness.
The fiasco was captured this week when that pompous and pitiful British nationalist, Nigel Farage, waved a miniature Union Jack in the European Parliament as he bid farewell and was cut off by the vice-president of the Parliament, Mairead McGuinness. “Put your flags away, you’re leaving, and take them with you,” she said.
Farage looked like a sheepish schoolboy caught breaking rules. He blushed. An Irish woman from a country uplifted by European Union membership reprimanding the new breed of little-England male as he exits history in pursuit of an illusion: the symbolism was perfect. “Hip, hip hooray!” Farage’s flag-waving Brexit Party cohorts chanted. Save me, please, for I shall weep.
Speaking of symbolism, the fact that President Trump has been a fulsome supporter of this folly is apt. An ahistorical, amoral American leader cheering on a British abdication sums up the end of an era. The world was rebuilt after 1945 on something of more substance than British-American lies and bloviation; it took resolve. The torch has passed. To whom exactly is unclear, perhaps to a country slow to contain a plague. That is a problem.
Brexit belongs to this era in one quintessential way. It is an act of the imagination, inspired by an imaginary past, carried along by misdirected grievances, borne aloft by an imaginary future. The age of impunity is also the age of illusion turbocharged by social media.
Inequality, poor infrastructure, low investment, inadequate schools are real British problems but the take-back-your-country transference of blame for them onto “Brussels bureaucrats” proved that the imagination now overwhelms reality. Truth withers. The mob roars. This, too, is a problem.
Yes, Britain was undefeated in World War II and helped liberate Europe. But it could do so only with its allies; and it was precisely to secure what it is now turning its back on: a free Europe offering its people the “simple joys and hopes which make life worth living.” Those are Churchill’s words in 1946 in a speech that also contained this phrase: “We must build a kind of United States of Europe.” Unbowed Britain was once consequential Britain; no longer.
I used the word “abdication” advisedly. Europe needs the great tradition of British liberalism at a moment when Hungary and Poland have veered toward nationalism and, across the Continent, xenophobic hatred is resurgent. It is perverse for Britain to try to look away. Europe is part of Britain. Visit the great Norman monasteries in England and tell me this is not so. The British dead who lie in the Continent’s soil having given their lives for its liberty tell the same story of interlaced fate from a different perspective.
To be so orphaned is painful. The 47 years of British membership cover the entire arc of my adult life. Europa was our dream. I covered Anwar Sadat, the Egyptian president, speaking to the European Parliament about hope and peace in 1981, eight months before his assassination. So much for dreams.
Yet they persist, for otherwise life is unlivable. I wandered from Brussels to Rome to Paris to Berlin to London and everywhere I lived I experienced some iteration of Europe’s beauty, as a physical thing, as a cultural bond and as a transformative idea.
The sensation was most acute in Germany, where the idea of the union was the most effective escape from postwar shame and the rubble of 1945, a form of atonement. But it was ubiquitous, the guarantor of our deliverance and the symbol of our capacity to reinvent the world and even make it better.
Every European country, through the goal of ever closer union, changed itself. They grew richer, no small thing. But they also reframed their self-image.
Italy and Spain left Mussolini and Franco behind to become stable, prosperous democracies. France found its tortuous way to truth after the humiliations and predations of Vichy and discovered a European avenue to express once more its universal message of human rights founded on human dignity.
Central European countries stabilized their escape from the deadening Soviet imperium to which Yalta had confined them. Britain ceased equating Europe with scourges like intellectuals, rabies and garlic, as it had in my childhood. Hyde Park became a babble of European tongues. The British economy surged. Britain had given up its colonies and found a new identity in association with Europe, or so it seemed, flickeringly.
Then I lived in Sarajevo covering the Bosnian war and I saw, in inert bodies torn by shrapnel, and in history revived as galvanizing myth of might and conquest, the horror from which the European Union had saved my generation. It had laid bad history to rest. That was enough to be forever a European patriot.
But not enough for the British a quarter-century later. In the words of my friend Ed Vulliamy, who also covered that war, Britain has become a country “that boards cheap flights for stag outings to piss all over Krakow.”
Hip, hip hooray!
When I lived in Berlin, I would cross the nearby Polish border and never failed to marvel that where millions had perished decades earlier a nonexistent frontier traced its invisible line across fields of wheat. I would pass from the German world to the lands of the Slavs and nobody asked me who I was, what papers I bore or what was my intent.
If German-Polish reconciliation has been possible, anything is possible, my only solace at this moment. A bunch of flag-waving fantasists, at the wrong end of actuarial tables, have robbed British youth of the Europe they embrace. They will be looking on as 450 million Europeans across the way forge their fate. Their automatic right to live and work anywhere from Lisbon to Stockholm will be lost.
I’ve lost a limb; more than a limb, my heart. Europe helped Britain grow bigger and more open and more prosperous. Now it will shrink. Another suffering friend, Patrick Wintour, the diplomatic editor of The Guardian, sent me these lines of Auden:
In the nightmare of the dark
All the dogs of Europe bark,
And the living nations wait,
Each sequestered in its hate;
Intellectual disgrace
Stares from every human face,
And the seas of pity lie
Locked and frozen in each eye.
A better epitaph for the aborted story of Britain in Europe and the tragedy of a disoriented nation’s willful infliction of enduring self-harm is impossible to imagine.


"America has legitimate complaints about the way China does business and trade, especially the theft of intellectual property. But American workers don’t benefit from a poorer China beset by disease. America benefits when the rest of the world prospers and can buy U.S. goods."

This gem comes from the Wall Street Journal. As we have argued in our essays on Friedrich List (available by searching this Blog), this kind of pathetic idiocy forms part of what List called "the Anglo-Saxon cosmopolitan" view of economic theory whereby "wealth" is seen as an absolute value that all human beings can enjoy. In reality, however, "wealth, however defined quantitatively or qualitatively, is always and everywhere relative, in the sense that it is a zero-sum game! Wealth is social power! Asked whether they would rather earn $100,000 where everyone else was earning $200,000, or else $50,000 where everyone else was earning $20,000, hundreds of US graduates had no hesitation whatsoever! They preferred the latter option! That is to say, earn $50,000 when everyone else earns $20,000 rather than double the amount ($100,000) when everyone else earns twice as much ($200,000).

Evidently, both Paul Krugman and the Editors of the WSJ have half the IQ than most of the graduates at US colleges! - Which ought to be a reassuring fact....


The arrivals area at Beijing Capital Airport on Thursday. A growing number of airlines are suspending service to China.
Chinese President Xi Jinping in Brasilia, Brazil, in November. (Andre Coelho/EPA-EFE/REX/Shutterstock)
Chinese President Xi Jinping in Brasilia, Brazil, in November. (Andre Coelho/EPA-EFE/REX/Shutterstock)
Jan. 31, 2020 at 7:16 a.m. GMT+8
Beijing is lobbying hard to take over leadership of the international organization that oversees intellectual property, which could result in dire consequences for the future of technology and economic competition. But the U.S.-led effort to prevent this from happening faces a steep uphill climb.
In March, 83 countries will vote to elect the next director general of the World Intellectual Property Organization (WIPO), a U.N.-created body founded in 1967 “to promote the protection of intellectual property throughout the world.” The Chinese candidate, Wang Binying, currently serves as one of its four deputy director-generals and is widely seen as the front-runner.
On its face, allowing China to assume leadership of the WIPO poses a clear risk to the integrity of the institution, given that the U.S. government has singled out China as the leading source of intellectual property theft in the world. The Chinese government has made economic espionage, the theft of trade secrets and forced technology transfer key parts of its state-sponsored strategy of economic aggression. If China were to control the WIPO, all kinds of fundamental intellectual property information could go directly into the hands of the Chinese government, and that, in turn, could undermine basic trust and confidence in the international patent system.
“We cannot let a regime that continues to blatantly undermine the rules-based system by failing to ensure open markets or respect for intellectual property rights, ascend as the global leader of intellectual property policy,” Sens. Tom Cotton (R-Ark.) and Charles E. Schumer (D-N.Y.) wrote to President Trump last month.
China’s WIPO leadership bid is just the latest part of its comprehensive effort to assume control of as many U.N. and multilateral organizations as possible. Smartly, Beijing has recognized the importance of playing a leading role in global governance and has devoted enormous resources to its plan.
A look at Beijing’s record reveals that its strategy is not to bolster these institutions for universal benefit but to advance China’s interests. In the U.N. organizations China now leads, the results have been terrible.
In 2015, China took over the leadership of the International Civil Aviation Organization. The ICAO quickly stopped inviting Taiwan to its annual assembly. This week, the ICAO blocked experts on Twitter who demanded that the group include Taiwan in response to the Wuhan coronavirus outbreak.
Last February, reports revealed the ICAO hid for months a major hack of its servers that originated from China. The ICAO leadership then retaliated against the whistleblower who exposed the coverup.
Since China assumed leadership of the International Telecommunication Union (ITU) in 2015, the ITU has drastically increased cooperation with Beijing, among other things by promoting China’s Belt and Road Initiative and defending Chinese telecom giant Huawei. The United Nations’ Department of Economic and Social Affairs (DESA), also led by a Chinese official, is pushing the Belt and Road Initiative and is building a “big data research institute” inside China in partnership with Beijing.
In 2018, Chinese official Meng Hongwei, then the head of Interpol, was secretly sent back to China, where he was prosecuted for corruption and given a 13-year prison sentence.
“Beijing’s ambition to head the WIPO is part of a wider pattern in which the Chinese authorities are looking to take a leadership role in critical rules-based institutions, including but also not limited to the U.N.,” said Christopher Walker, vice president for studies at the National Endowment for Democracy. “They have proved adept at using these positions to transform organizations from within, often in ways that are inhospitable to governance integrity and basic democratic standards.”
Last June, Qu Dongyu, China’s vice foreign minister for agriculture, defeated the U.S.-backed candidate to become the head of the United Nations’ Food and Agriculture Organization by a vote of 108 to 12. That shock spurred a new effort by the United States to up its game.
The State Department reassigned its special envoy for North Korea, Mark Lambert, to a new role overseeing an effort to ensure the integrity of U.N. organizations, with a heavy focus on China. With regard to WIPO, the Trump administration has been waging a quiet but extensive effort to support an alternative candidate, including several phone calls by Secretary of State Mike Pompeo to his counterparts on the issue. Several sources have said that candidate is Singapore’s candidate, Daren Tang.
The U.S. effort is hampered by the administration’s public contempt for the multilateralism and its damaged relationships with allies. Victory is by no means assured.
This is worse than letting the fox into the henhouse. This is akin to choosing a bank robber to be president of the bank. In Beijing’s economic strategy, intellectual property theft is a feature, not a bug.
The United States and its partners who believe in rule of law, transparency and accountability in world governance cannot and should not try to thwart every Chinese attempt to lead international organizations. In this case, though, the stakes are too high not to try.


In a fresh Opinion in The New York Times, Paul Krugman chides Trump Admin trade supremo Wilbur Ross for opining that the imminent collapse of the Han Chinese Rat bubble economy - a speculative financial house of cards if ever there was one - will drive investment and jobs to the US.

Of course, Krugman is quite right to point out that any recession or depression in Ratland will not be positive for any of the globalised industrial capitalist economies - such is the extent of supply-chain integration that Western capitalists have imposed on humanity, to the extent that the global labour force has more than doubled (!) since the 1980s. This horrifying fact alone would serve to explain everything that has happened to world capitalism in the last forty years: the growth and survival of the Western bourgeoisie to the point where it has cornered nearly all the wealth and resources available on Earth; the contemporaneous rise of a virulent totalitarian kleptocratic and belligerent Dictatorship in China that is now running out of "Lebensraum" (Hitler's notion of "living space") and devoting nearly all its resources to its military-industrial complex so as to be able to arrogate violently to itself any and all resources in the planet. Despite this, and indeed because of this - because of the obscenely abhorrent accumulation of social wealth in the hands of very few capitalists - the enormous, fantastic appreciation in real assets - from real estate, to commodities, to financial assets , especially Treasury bonds - has resulted in a tremendously inflationary asset bubble and lowering of productivity and living standards that now threatens systemically the very survival of global capitalism!

As we have often remarked in this Blog, Krugman is an economist. And despite his strenuous attempts to broaden his analytical horizon to other more political spheres, the more he tries, the more evident is his lack of knowledge and perspicacity in these broader fields of intellectual and analytical endeavour. What Krugman entirely fails to notice this time is the fact that "wealth" - including the accumulation of capital through profitable capitalist investment - is always and everywhere a relative notion - because it refers to one's ability to command social resources, above all human living labour, in competition - that is to say, against - all other capitalists, be they individuals or nation-states.

In other words, Krugman, as a naive professorial Nobel laureate, is thinking of "wealth" in absolute terms, whereas Wilbur Ross - who is a clever mercantilist rogue - is thinking in terms of Realpolitik! YOUR DEATH IS MY LIFE! (In Latin, the law of the jungle is, mors tua, vita mea!) AND WILBUR ROSS IS MAGNIFICENTLY RIGHT! Because if we Westerners are to survive, the very first thing we must do is NOT think in terms of abstract "wealth" - which is a meaningless concept in the end (Keynes, "In the long run we're all dead"), but rather think in terms of how we can annihilate our mortal enemies - first and foremost the Han Chinese Rats! And this is why Wilbur Ross is entirely correct in asserting that the eventual demise of the Chinese Dictatorship and its Han Chinese Rat Evil Empire will entail and engender the triumph of the West, which is much to be preferred and be conquered and imposed upon our enemies if humanity itself is to have a future at all! Cheers.

Investors flee Hong Kong stocks as coronavirus death toll rises 
China-focused shares in the city have experienced their worst week in almost 2 years 

Chinese stocks in Hong Kong suffered their worst weekly performance in almost two years as the death toll from the coronavirus outbreak rises. The Hang Seng China Enterprises index — which tracks mainland Chinese companies listed in Hong Kong — has fallen 6.7 per cent this week, its steepest decline since February 2018, as investors dumped shares.  Concern among investors about the contagion has grown in recent days, with the number of infections in China having surpassed the global total from the deadly Sars epidemic in 2002-2003.

 Traders are now bracing for a sharp sell-off when equity markets in the mainland Chinese cities of Shanghai and Shenzhen return from an extended lunar new year holiday on Monday. When they “reopen the market [it] is going to be quite harsh . . . The last thing [the Chinese government] really needs is for the stock market to really crash out”. said Andrew Sullivan, Hong Kong-based director at broker Pearl Bridge Partners. More than 9,600 people in China have now been infected with the virus, which originated in the central Chinese city of Wuhan. It has since spread to other countries, including Thailand, Australia and the US.

The first reported cases in the UK were confirmed on Friday. All of the 213 people who have died so far have been in China.  As well as battering equity markets, the contagion has also raised fears over its impact on China’s economic growth, already at a three-decade low. Those concerns have fed through to the price of the agricultural commodities of which China is a significant consumer.  The price of Chicago-traded soyabean futures has fallen 6.6 per cent in January, the worst monthly performance in almost 18 months. Frank Benzimra, an Asia strategist at investment bank Société Générale, said the decline underscored investors’ concerns about Chinese difficulties meeting its commitment to import more agricultural products from the US. The agreement is a key part of the so-called “phase one” trade deal reached between Washington and Beijing last month. “How China will be able to import $200bn in additional products from the US in the next two years . . . that could be an important question for the global economy,” Mr Benzimra said.

The rout in Asian equities this week has also resulted in investors seeking out corners of the market that stand to benefit from the epidemic. At least eight Hong Kong-listed pharmaceutical companies have notched up at least double-digit gains on the expectations of higher demand for their medicines. China Health Group, an obscure small-cap listed in the city, has soared more than 1,600 per cent since Monday. The pharmaceutical manufacturer said a week ago that one of its drugs had been earmarked by China’s state health commission for use in its response to the coronavirus outbreak. Its market capitalisation hit $246m on Friday, up from just $13m at the start of the week.  Extrawell Pharmaceutical and China NT Pharma have jumped 173 per cent and 50 per cent, respectively. The gains for these stocks were “certainly overdone” given the uncertainties surrounding the outbreak and the time needed to roll out any potential treatments, said Mr Sullivan. “People are clutching at straws,” he added.

Coronavirus ‘deadlier than it looks’, virologist warns

Australian Animal Health Laboratory director Trevor Drew. Picture: Stuart McEvoy
Australian Animal Health Laboratory director Trevor Drew. Picture: Stuart McEvoy
The man spearheading Australia’s efforts to develop a vaccine for the coronavirus has warned that the contagion could ­become more deadly as it spreads.
The warning from Australian Animal Health Laboratory director Trevor Drew came as China reported the number of infections had surged by nearly 2000 in a day and more countries closed their borders to its nationals.
The death toll in China, the epicentre of the pandemic, has hit 213, while 21 other countries have confirmed cases of the disease, ­spurring the World Health ­Organisation to declare a global emergency. The US warned its ­citizens not to travel to China.
Nine people are ill with coronavirus in Australia. A chartered Qantas Boeing 747 is due to leave Sydney on the weekend to evacuate Australians from the locked-down ­city of Wuhan in central China to a quarantine centre on Christmas Island, where they will stay for a fortnight. About 600 Australians are understood to be stranded in Wuhan, but only a quarter of them have registered to return home.
Melbourne’s Monash University will delay the start of semester one classes for a week due to the “unprecedented situation” of ­students and staff being unable to return in time from overseas. Orientation week will also be postponed, the university ­announced late on Friday.
Professor Drew said early indications that the disease was killing less than 2 per cent of victims in China could be misleading ­because of the potential for it to evolve rapidly and gain ­potency. He spoke out as the first batch of a world-first Australian-grown virus arrived at a CSIRO lab outside Geelong, paving the way for a fast-tracked vaccine to enter preclinical trials within weeks.
READ MORE:Hunkering down for travellers’ return|China isolated in global emergency|Disease transfer rate a key danger|Not time for knee-jerk reaction: tourism|Unis to delay term, shift lessons online|China’s ticking time bomb
Professor Drew said it was ­better to think of the emergent Wuhan strain as a “cloud” of closely matched pathogens rather than a single virus. In a “high-host-density environment” such as heavily populated China, it could rapidly mutate and become more deadly. “You may well find that more virulent viruses emerge from that cloud,” he said.
Professor Drew said the Chinese authorities had recognised that the outbreak could be worse than SARS in 2003 and MERS in 2012, both caused by corona­viruses. Severe acute respiratory ­syndrome killed 744 people worldwide before burning out, while Middle East respiratory syndrome had a reported fatality rate of more than 30 per cent in the hot zone on the Arabian peninsula.
The Wuhan coronavirus is ­suspected by scientists to have jumped from bats to people in one of the city’s live animal markets in the same way that SARS erupted in southern China 16 years ago, killing up to 7 per cent of those who contracted the disease.
Professor Drew said the history of porcine reproductive and respiratory syndrome in pigs showed how coronavirus could become more lethal over time, in sharp contrast to the usual progression of an epidemic.
“What I am thinking might be happening here is not that people have been infected for some time with this virus, but that it is finding a new niche rather more slowly and that could ultimately cause more of a problem than we have seen with other diseases because it is not so spectacular early on in its evolution,” he said.
“This … is a particular feature of coronaviruses because of the way they replicate.”
Ben Cowie, an infectious ­disease specialist at the Doherty Institute for Infection and Immunity in Melbourne, said it was a “less likely scenario” that an ­emergent virus would become more deadly after invading a human population. “Typically, it’s in the other ­direction,” Professor Cowie said. “But there can be reassortments, and we see this with flu. Flu mutates year in, year out, to be able to infect people who have been ­immune to it.”
The number of people known to have coronavirus in Australia hit nine when a 42-year-old ­Chinese woman from Wuhan ­tested positive on Queensland’s Gold Coast. She had been ­travelling in a tour group of nine, including another Wuhan man, 44, who fell ill after a two-hour flight from Melbourne and was found on Thursday to be infected. Tests on a sick child who was with them are pending.
Queensland chief health officer Jeanette Young said authorities were still trying to trace among the 172 passengers on the Tigerair flight those who may have been exposed to the infected tourists.
More than 200,000 people were due to fly this month on ­direct flights from China to Australia, reinforcing the Asian ­nation’s standing as our biggest source of foreign visitors.
Tourism operators said arrivals from China had plunged 15 per cent since the disease crisis began, potentially costing the industry and the national economy hundreds of millions of dollars.
Some countries have temporarily banned citizens of Hubei province from entering, while Russia has closed its 2400km-long land border with China, and Hong Kong has suspended all rail ­services.
A disaster response team has been dispatched to Christmas ­Island to prepare a quarantine ­facility for up to 600 Australian men, women and children to be evacuated from Wuhan.
The government on Friday night was still waiting for the green light from Beijing to commence the evacuation process as Australian Medical Assistance Teams (AUSMAT) began preparing the island for the evacuees’ arrival.
Australia is not accepting flights from Wuhan but on Friday the Transport Workers Union called on Prime Minister Scott Morrison to extend the ban to all flights from China.
CSIRO director of health and biosecurity Rob Grenfell said ­preclinical trials of a vaccine could be under way by March, an ­astonishing turnaround by ­Australian scientists.
At the same time, molecular ­biologists at the University of Queensland were fine-tuning a revolutionary “plug and play” ­vaccine model to accommodate pandemic threats as new viruses emerged. This has put Australian scientists at the forefront of the international effort to contain ­coronavirus.
Additional reporting: Charlie Peel, Robyn Ironside, Remy Varga