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Novel Coronavirus and Chinese Petrochemical Markets – How to Anticipate the Unexpected?

Novel Coronavirus and Chinese Petrochemical Markets – How to Anticipate the Unexpected?

What has happened so far?

The novel coronavirus, a variant of the virus that caused SARS and MERS, was first identified in Wuhan in Hubei province, China, in December 2019. By 3 February 2020, 361 people had died and there were 17,200 confirmed cases in China, according to the UN News website. On 31 January, the number of cases had already exceeded the total number of SARs cases reported over the entire scope of that epidemic in 2003. On 30 January 2020, the WHO declared a global health emergency. At the same time, the body did not recommend closing all borders as official migration will ensure better control than unofficial migration.

Where did it come from?

As Julianna LeMieux reported on 31 January in the publication, Genetic Engineering and Biotechnology News, after the disease was linked to a seafood market in Wuhan, and there were some reports of links to snakes, Chinese scientists have been able to determine through genomic analysis that the novel coronavirus, nCoV-2019, is linked to bats. This is not too surprising since SARs and Ebola have also been linked to bats. Why bats? Bats live close together in large groups, are unusual amongst mammals in their ability to fly, which enables the virus to travel, and they have high body temperatures, which allow the virus to live in them without killing them. The high level of diversity in the bat population may also contribute to the reasons for bats being more likely than other animals to host diseases that are eventually passed on to humans.

What about the Economy?

On 3 February, the first trading day after the Lunar New Year holiday, the China stock market plummeted by around 8% amid virus fears, the worst day in over four years. The Chinese government already expects that GDP growth will drop from the expected 6% to 5% this quarter, while Q2 will see 6% restored -- many observers think this is optimistic. There will be repercussions throughout Asia, and the coronavirus outbreak has spread to more than a dozen other countries, causing stock markets around the world to weaken.