World coronavirus dispatch: China prepares for full-blown global offensive

From Spain and Italy relaxing lockdowns to Russia hitting a new daily high for cases, and Trump backing claim that coronavirus emerged out of Wuhan lab - read these and more in today's world dispatch

An internal Chinese report has warned that the rising wave of hostility Beijing is facing in the wake of the coronavirus outbreak could tip its relations with the US into confrontation. The report, presented early last month by the Ministry of State Security to top Beijing leaders, including President Xi Jinping, and obtained by Reuters through sources, concluded that global anti-China sentiment was at its highest since the 1989 Tiananmen Square crackdown. This goes on to show China may have started arrangements to prepare for a full-blown global offensive. Read more here.

Let’s look at the global statistics:

Total confirmed cases: 3,526,178

Change over previous day: 76,192

Total deaths: 247,971

Total recovered: 1,133,079

Nations hit with most cases: The US (1,158,341), Spain (217,466), Italy (210,717), the UK (187,842) and France (168,925).

Source: Johns Hopkins Coronavirus Research Center

Spain and Italy relax more restrictions, Russia hits a new daily high for cases: Spain and Italy, two of the European countries most affected by the coronavirus pandemic, are beginning to emerge from strict lockdowns. Russia and Afghanistan, meanwhile, have reported their biggest one-day increase in new infections. In the former two, small shops, such as bookshops, hardware stores and hair salons opened on Monday, along with restaurants for the collection of takeaways. Read more here.

Trump backs claim that coronavirus emerged out of Wuhan lab: US President Donald Trump promised a “conclusive” report on the Chinese origins of the coronavirus outbreak. He said he had little doubt that Beijing misled the world about the scale and risk of the disease. Earlier, Secretary of State Michael Pompeo had said “enormous evidence” showed the Covid-19 outbreak began in a laboratory in the city of Wuhan, without providing evidence to support his claims. Read more here.

US-China trade war tensions escalate: In a Fox News interview on Sunday night, Trump raised concerns of a resumption of economic hostilities with China, calling tariffs “the ultimate punishment” for its response to the pandemic and threatening to withdraw from the trade deal if Beijing’s purchase pledges came up short. Read more here.

Warren Buffett sells airline shares: Warren Buffett’s Berkshire Hathaway dumped its stakes in the four largest US airlines but the billionaire investor remains deeply exposed to the collapse in air travel. Berkshire still owns all of Precision Castparts Corp, a supplier of aerospace parts that’s bracing for lean times as Boeing and Airbus cut jetliner production. Read more here.

Ferrari cut 2020 profit forecast: Luxury sports car maker Ferrari cut its 2020 core profit forecast due to disruption caused by the coronavirus pandemic, which it said would mainly hit second-quarter results. The Italian company forecasts a “harsh” reduction of revenues linked to Formula One, where races have been suspended, as well as reduced turnover from brand projects and lower engine shipments to Maserati. Read more here.

Amazon V-P quits over whistle-blower firing: A senior Amazon software engineer has resigned in protest over the company’s dismissal of whistle-blowers who brought attention to safety concerns among its warehouse workers. Tim Bray, a vice-president at Amazon Web Services, said: “I quit in dismay at Amazon firing whistle-blowers who were making noise about warehouse employees frightened of Covid-19.” Read the story here and his blog post here.

Specials

‘90 per cent economy’: The Economist has put out an interesting analysis, the basic argument of which is that if you look at countries that have largely controlled the spread of the virus (such as China and South Korea), it appears that national output will be capped at 90 per cent of potential because of persistent social-distancing measures.

There are three distinguishing features of these 90 per cent economies. The first is ‘fragile’, where the threat of coronavirus returning (leading to more lockdowns) will make it nearly impossible for businesses to plan months ahead. Without long-term planning, it would be difficult to envision businesses sinking money into investment projects. The second is ‘less innovative’, where less face-to-face socialising is equal to fewer opportunities for the sorts of spontaneous brainstorming sessions that lead to world-changing ideas. And third is ‘more unfair’, where, as Fed Chair Jerome Powell noted last week, this economic crisis has disproportionately hurt lower-income workers. Oxford researchers found that the Americans who make less than $20,000 a year were two-times as likely to lose their job during the pandemic as an American making more than $80,000. Read more here.

Markets start May on poor note — what does it mean for near term? The negative start to the month raises concern that the partial recovery in April is going to be about as good as it gets for risk assets. For all the optimism stemming from the gradual easing of lockdown measures in some of the biggest economies, there are too many worries on the minds of traders to sustain the momentum from last month. The fear of a second wave of coronavirus infections, the collapse in corporate earnings and the shocks reverberating from the economic data are toxic enough. And throw in now is a new eruption of political sparring between the US and China, this time over the origin of the virus. Read more here.

Some US colleges look to open up in fall. How will they ensure safe functioning? Among the schools that have announced intentions to open in the fall are Purdue, the University of Nebraska, the University of Alabama, the University of North Carolina and Baylor. To limit students' exposure to one another, some universities are considering inviting a smaller number of students to the campus — just freshmen for whom an on-campus orientation is key, for example — and spreading them out across dorm facilities. Schools may have to ban social gatherings above a certain size, and limit students' ability to have visitors on campus or travel away from school on breaks. Read more here.

Ultra-rich families with cash on hand pile into private debt: As coronavirus upends financial markets, family offices with money to spend are boosting private debt and credit holdings to take advantage of cheaper valuations and avoid the volatility of stock markets. Meanwhile, central banks are keeping economies afloat with cheap-money policies and negative yields, making assets that used to preserve and grow family fortunes less effective. Read more here.

Pictures

A compilation of anti-lockdown protests around the world: View the photo series here.

Video

How to make your own mask: Watch and learn it here.