China plans on injecting $174 billion into markets to calm coronavirus jitters, suggesting outbreak is much worse than reported
02/02/2020 / By JD Heyes
The Chinese government’s history of being dishonest and secretive regarding its internal affairs is legendary, but the Communists who run the show sometimes do things that give away their concerns.
By now, most people know that a new strain of coronavirus, which began in Wuhan, a city of 11 million in central China, is sweeping the globe. As of this writing and according to the most recent data posted by Natural News, more than 14,637 people have been infected globally, with 305 of those having died from the illness.
Chinese officials continue to claim they’ve got the outbreak under control, but there are indications that Beijing may be misleading the world once more.
For instance, reports last week citing leaked social media posts revealed that Chinese government and health authorities in Wuhan were secretly cremating scores of dead from the coronavirus, though there’s been no official announcement of the cremations.
One Chinese language news outlet, Initium, claimed to have interviewed workers at a local cremation center in Wuhan, a city of 11 million in central China where the coronavirus outbreak originated.
Officials reportedly told the outlet that bodies are being sent to the crematorium directly from hospitals without proper identification and without being added to the official death toll.
The New Zealand Herald also reported that the current coronavirus outbreak has easily surpassed an earlier pandemic known as SARS — also a ‘coronavirus’ believed to have originated in an animal, perhaps bats.
But there are other indications the virus is spreading faster and impacting China more severely than the government has reported.
The Hong Kong-based South China Morning Post reported over the weekend that the government is plowing $174 billion into the markets in order to stabilize them after investors became so jittery that some indexes may have been teetering on collapse.
China’s economy depends on massive growth
“Investors are bracing for the worst when markets resume following a new coronavirus outbreak that has dented China’s economic activity,” the paper reported, adding that the government will inject the funds into the market on Monday.
“Investors in Shanghai and Shenzhen are bracing for a possibly brutal return to trading when markets resume for the first time since the Lunar New Year holiday,” the paper continued.
The paper is directly tying the government’s cash infusion to the effects of the coronavirus outbreak, noting that economic activity has ground “to a near standstill” throughout the country.
While authorities scramble to contain the virus, they have also severely limited public transportation, closed entertainment venues, and implemented shorter business hours.
In addition, as the paper noted, Chinese officials are facing an “epidemic situation” as they move to quickly replace lost capital in the markets to keep them from collapsing and drinking down most of the Chinese economy in the process.
“It is the first time that the central bank has made such an announcement,” the paper reported, “and also marks the largest single-day” infusion of capital into the markets “ever conducted.”
It gets worse. Thanks to the spread of the virus and other countries’ response to it, such as cutting travel to China and other restrictive measures, Beijing’s economists are forecasting annual growth below 5 percent for the first three months of 2020, down from 6 percent last quarter.
That is substantial given that the Chinese economy has managed an average annual growth rate of about 8.5-9 percent per year since the 1990s.
What’s clear by now is that China hasn’t really ‘gotten a handle’ on the outbreak, and that governments around the world who were initially skeptical that Beijing could handle it have been proven correct.
If the infusion of cash doesn’t stabilize Chinese markets in any appreciable way after this initial measure, the collapse of the world’s second-largest economy may be just a few months — or weeks — away.
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Tagged Under: cash infusion, China, Chinese economy, Collapse, coronavirus, epidemic situation, finances, market crash, markets, outbreak, pandemic, risk, stock market
