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Situation Report Situation Report Coronavirus Spreading Widely in Multiple Countries as Global Risk Increases Author s: Mathew Mikuni, Senior Regional Analyst – Asia/Pacific Stephanie Kiefer, Senior Regional Analyst – Europe, the Worldwide Caucasus, and Central Asia March 3, 2020 Samson Sampson, Senior Regional Analyst – Middle East and North Africa Josh Strongin, Lead Intelligence Analyst – North America Contact : [email protected] Overview On Friday, the World Health Organization (WHO) upgraded the global risk assessment for novel coronavirus (COVID-19) to “Very High,” reflecting the fact that the virus is increasing its spread across the world. In recent days, there have been more new cases reported outside mainland China compared to within mainland China. The WHO has said that South Korea, Japan, Italy, and Iran are the organization’s greatest concerns at this time regarding the COVID-19 outbreak. The European Union also raised its risk level to “moderate to high,” with dozens of additional countries reporting COVID-19 cases, while the United States has also reported multiple deaths. There is a growing risk that COVID-19 could spread at a higher pace within these countries or to other countries as well. As of Tuesday, March 3, there have been over 92,000 cases of COVID-19 reported across dozens of countries, which have resulted in at least 3,100 deaths. Around 85 percent of these cases have been reported in mainland China, although this percentage has been decreasing in recent days. Over the past week, China has only reported a few hundred new cases per day, compared to the thousands of cases before, suggesting that at the moment, they are continuing to contain the outbreak. However, there are still significant and widespread supply chain disruptions, as the return to normal production within mainland China continues to be slow. With outbreaks accelerating across the world, customers are advised to be aware of the potential for additional supply chain impacts, especially if countries like South Korea are forced to curtail business operations to contain Confirmed COVID-19 Cases as of Tuesday, March 3 Source: World Health Organization (WHO) the outbreak. In addition, international travelers should keep in mind that if they are traveling to a country or area that is reporting a significant outbreak, they may face bans or other restrictions when traveling to another country or returning home. Mainland China and Worldwide Supply Chain Disruptions As of Tuesday morning, China’s National Health Commission (NHC) has reported 80,151 cases of COVID-19 across mainland China, including 2,943 deaths. This was an increase of 125 infections and 31 deaths from the previous 24-hour period. Only 11 cases were reported outside of Hubei Province, which is where the epicenter of Wuhan is located, representing a lack of new outbreaks in other parts of the country. The number of cases over the past week increased between zero and five percent per area, with multiple areas reporting no new cases. The number of suspected cases also decreased to 587, continuing the downward trend of people that still might have the disease and was significantly lower than the peak of 28,000 suspected cases in early February. The number of remaining cases, which refers to the total number of cases but subtracting those who have been cured or discharged, has also reached a low of 32,947. Over the past week, multiple regions in mainland China have downgraded their emergency response levels for COVID-19. China operates a four-level response system, with I being the highest and IV being the lowest. Zhejiang, Sichuan, Xinjiang, Jilin, and Hainan have all downgraded their response levels from I to either II or III. Gansu, Liaoning, Guizhou, Yunnan, Guangxi, Shanxi, Shandong, and Jiangxi have also issued 8200 Greensboro Dr, Ste. 420 • McLean, VA 22102 • 804-744-9953 • www.NC4.com Mainland China: Confirmed and Remaining COVID-19 Cases 90,000 18,000 79,251 79,824 80,026 80,151 78,064 78,497 78,824 80,000 76,936 77,150 77,658 16,000 75,465 76,288 74,185 74,546 70,000 14,000 60,000 12,000 59,809 58,389 57,199 55,629 Before From Day Change 54,048 - 50,000 52,416 10,000 50,428 48,319 46,002 40,000 42,707 8,000 40,249 37,999 Total and Remaining Cases Remaining Total and 35,564 30,000 32,947 6,000 20,000 4,000 2,934 2,533 2,184 and Cases Confirmed Suspected New 1,638 10,000 1,530 2,000 1,038 941 834 845 779 675 705 343 254 0 0 New Confirmed Cases New Suspected Cases Total Infections Remaining Cases Source: National Health Commission of the People’s Republic of China downgrades since February 21. The areas that have downgraded response levels now comprise around 51 percent of the country’s GDP, an increase from 33 percent on February 25. Production within Mainland China and Supply Chains Remain Severely Disrupted Signs of Improvement Over 91 percent of 48,000 state enterprises have resumed operations. Volume on metro lines has increased 65 percent from a week earlier. Increasing traffic levels in large cities suggest greater economic activity. Around 16 million people returned to work from their hometowns, bringing the total to around 290 million, according to Reuters. 8200 Greensboro Dr, Ste. 420 • McLean, VA 22102 • 804-744-9953 • www.NC4.com Mainland China: Suspected COVID-19 Cases 10,000 9,000 8,000 7,000 6,000 5,248 5,206 5,365 4,922 5,000 4,148 4,000 3,434 2,824 3,000 2,491 2,358 2,308 2,000 1,418 851 715 1,000 587 0 18-Feb 19-Feb 20-Feb 21-Feb 22-Feb 23-Feb 24-Feb 25-Feb 26-Feb 27-Feb 28-Feb 29-Feb 1-Mar 2-Mar Source: National Health Commission of the People’s Republic of China Rail freight, which has not been significantly impacted by the outbreak, grew in February despite the widespread restrictions. The U.S.-based National Retail Federation has said that supply chain disruptions are starting to subside, although this is varied between companies. Signs of Ongoing Disruptions Only around 33 percent of small and medium enterprises (SMEs) had restarted work as of February 26. Emissions from factories are still much lower than before the outbreak. There are continued reports regarding a shortage of workers and those restricted by quarantine measures. Despite roads reopening and many port facilities resuming, there are still reports about ports being clogged with containers and goods not being transported to factories due to a lack of transportation capacity. A.P. Moller-Maersk Group reported on February 27 that around 60 percent of China’s trucking capacity was back online. Factory activity and non-manufacturing activity in February reached an all-time low, even below the level seen during the 2008 financial crisis. Most importantly: Factories in other countries are still reporting significant shortages in raw materials and other intermediate goods from mainland China. 8200 Greensboro Dr, Ste. 420 • McLean, VA 22102 • 804-744-9953 • www.NC4.com Mainland China: Areas with Confirmed COVID-19 Cases as of Tuesday, March 3 February Percent February Percent Province/City March 2 Province/City March 2 24 Increase 24 Increase Hubei 67,217 64,768 3.8% Guangxi 252 252 0.0% Guangdong 1,350 1,347 0.2% Shaanxi 245 245 0.0% Henan 1,272 1,271 0.1% Yunnan 174 174 0.0% Zhejiang 1,213 1,205 0.7% Hainan 168 168 0.0% Hunan 1,018 1,016 0.2% Guizhou 146 146 0.0% Anhui 990 989 0.1% Tianjin 136 135 0.7% Jiangxi 935 934 0.1% Shanxi 133 133 0.0% Shandong 758 755 0.4% Liaoning 125 121 3.3% Jiangsu 631 631 0.0% Jilin 93 93 0.0% Chongqing 576 576 0.0% Gansu 91 91 0.0% Sichuan 538 529 1.7% Xinjiang 76 76 0.0% Heilongjiang 480 480 0.0% Inner Mongolia 75 75 0.0% Beijing 414 400 3.5% Ningxia 74 71 4.2% Shanghai 338 335 0.9% Qinghai 18 18 0.0% Hebei 318 311 2.3% Tibet 1 1 0.0% Fujian 296 294 0.7% Source: World Health Organization (WHO) Supply Chain Disruptions are Continuing or even Intensifying outside Mainland China Southeast Asia, particularly the garment sector, is reporting significant ongoing disruptions. Cambodia has said that ten factories with 3,000 workers are being forced to suspend operations due to a lack of raw materials from China, and this could grow to 200 factories and 160,000 workers by the end of the month. Myanmar has reported that several garment and bag factories in Yangon have had to shut down or reduce operations. Vietnam has said that a lack of Chinese labor has resulted in significant delays in the unloading of trucks at the main international crossing with China. Unloading operations now take a whole day, when previously they only took an hour. The automotive sector worldwide is still being severely impacted. India’s Tata Motors and Mahindra & Mahindra have reported that the impact on the supply of parts from China is expected to continue for at least another few weeks. In Spain’s Malaga, a factory owned by Denso that produces car audio components has said that it could be forced to reduce production from March 16 due to a lack of parts from China. The plant’s director said that that deliveries take at least three to five weeks when production restarts.
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