China’s coronavirus is not remotely under control and the world economy is in mounting peril

The workshop of the world is closed. China is on a total-war footing. The Communist Party has evoked the ‘spirit of 1937’ and mobilized all the instruments of its totalitarian surveillance system to fight both the Coronavirus, and the truth. Make GDP forecasts if you dare.

As of this week two-thirds of the Chinese economy remains shut. Over 80pc of its manufacturing industry is closed, rising to 90pc for exporters. 

The Chinese economy is 17pc of the world economy and deeply-integrated into international supply chains. It was just 4.5pc of world GDP during the SARS epidemic 2003, which some like to use as a reassuring template. You cannot shut down China for long these days without shutting down the world. 

Today’s investor euphoria at reports of two new wonder drugs from Zhejiang University show how badly unhinged the market has become. This is not the way that medical science advances. Nor could these anti-virals possibly be ready, in time and at scale, to avert serious economic upheaval…

The scale of disruption in China is already staggering. Hyundai, Number Five in global car sales, has been forced to close all its factories at home in Korea for lack of key components. Volkswagen, Toyota, General Motors, and Tesla have all downed tools at their Chinese plants, as has Apple’s iPhone supplier Foxconn.

Crude prices have dropped 20pc since early January, that long-ago moment when eight Wuhan doctors were already trying to alert the world to the virus, only to be arrested for “spreading rumours”. 

This is the biggest shock to oil markets since the Lehman crisis.