(Bloomberg) -- China may seek flexibility on its trade deal with the U.S. that’s supposed to take effect this month, according to people familiar with the matter, after the coronavirus outbreak has led to quarantines and travel lockdowns that have hurt business activity. The U.S. Centers for Disease Control and Prevention is working to get emergency approval for a test for the virus, and says it’s preparing for the disease to become a pandemic.
The death toll from the coronavirus outbreak rose past 360; total confirmed cases reached almost 17,400. A vaccine for the virus may take 12 to 18 months to develop, said a major drugmaker.
Bloomberg is tracking the outbreak on the terminal and online.
Key Developments:
- Gilead Sciences Inc (NASDAQ:GILD). gains with testing of its drug; some have doubts
- China’s government accused the U.S. of “overreacting” in response to outbreak
- Outbreak puts China’s commodity industry at risk
A spokesman for U.S. Trade Representative Robert Lighthizer said Washington hasn’t received any request from China to discuss changes in Beijing’s purchase commitments as part of the phase-one trade deal set to take effect this month.
Chinese officials are hoping the U.S. will agree to some flexibility on pledges in their pact, people familiar with the situation said. Beijing is trying to contain the coronavirus crisis, which threatens to slow domestic growth with repercussions around the world.
The trade deal has a clause that states the U.S. and China will consult “in the event that a natural disaster or other unforeseeable event” delays either from complying with the agreement.
Carnival (NYSE:CCL) Shares Fall as Passenger Tests Positive (1:20 p.m. NY)
Carnival Corp.’s Princess Cruises said a recent passenger in Asia tested positive for coronavirus, prompting Japanese health officials to delay the ship he’d been on while they conduct a review of all guests and crew.
Princess said in an emailed statement Monday that the passenger embarked in Yokohama, Japan, on Jan. 20 and disembarked in Hong Kong on Jan. 25. The ship, Diamond Princess, then continued its round-trip journey to ultimately take other passengers back to Yokohama, which is near Tokyo.
On Saturday, the passenger, who was from Hong Kong, tested positive for coronavirus at a local hospital there, according to Princess. The episode comes just days after a ship from Carnival’s Costa Crociere unit was put on lockdown at a port near Rome over concerns that passengers might have had coronavirus. Those passengers were eventually diagnosed with the flu.
Carnival shares fell as much as 3.3% to $42.10, the lowest intraday level since October.
Vaccine Could Take Year or More, Glaxo Says (12:32 p.m. NY)
Developing a vaccine against the coronavirus could take 12 to 18 months, Thomas Breuer, GlaxoSmithKline Plc’s chief medical officer for vaccines, said in an interview with Bloomberg TV Monday.
While technology could enable researchers to come up with new vaccine candidates within a few months, they will then have to undergo human safety and efficacy trials that may last about a year, Breuer said.
Read more about efforts to develop a vaccine here.
CDC Seeks Emergency Approval for Virus Test (11:58 a.m. NY)
U.S. health officials are seeking emergency approval to roll out a test for the coronavirus that can be used by hospitals and state health authorities, instead of having samples shipped to the Centers for Disease Control and Prevention for analysis.
The agency is preparing for the outbreak as if it will be a pandemic that spreads widely from China to other countries, including the U.S., said Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases. The goal of public health officials is to slow the virus’s entry into the U.S., she said.
Federal and local health authorities have been monitoring people who have displayed symptoms and have a travel history that puts them at risk. The vast majority have tested negative: There are 11 confirmed cases in the U.S., and 167 people who have a negative test. It’s possible that some people can test negative and then have a positive result later, depending on how far along their illness is.
The severity of the U.S. cases has varied, with some people becoming more severely ill, Messonnier said. Some have needed oxygen, she said.
EU Doesn’t See Need for Broad Travel Restrictions (11:19 a.m. NY)
The European Union doesn’t see the need for blanket travel restrictions in response to the coronavirus outbreak, Stella Kyriakides, the EU’s top health official, said in an interview with Bloomberg TV. Some EU member states, such as Italy, have taken such measures.
Kyriakides, the European commissioner for health and food safety, said she has no concerns about China’s response to the outbreak.
There are currently 25 coronavirus cases that have been identified in Europe, 21 in the EU, two in the U.K. and two in Russia, according to Andrea Ammon, the executive director of the European Centre for Disease Prevention and Control.
“For the time being the situation in Europe is under control,” Ammon told members of the Euopean parliament in Brussels on Monday. “The aim currently is to really confine the cases and to prevent the further spread.”
China Seeks U.S. Flexibility on Trade Targets (10:05 a.m. NY)
Chinese officials are hoping the U.S. will agree to some flexibility on pledges in their phase-one trade deal, people familiar with the situation said, as Beijing tries to contain a health crisis that threatens to slow domestic growth with repercussions around the world.
The agreement sealed Jan. 15 is supposed to take effect in mid-February. It has a clause that states the U.S. and China will consult “in the event that a natural disaster or other unforeseeable event” delays either from complying with the agreement. It’s unclear whether China has formally requested such a consultation yet, but the people familiar with the matter said the plan is to ask for it at some point.
The Chinese Commerce Ministry and U.S. Trade Representative didn’t immediately respond to a request for comment.
Lufthansa Extends China Flight Suspension (9:02 a.m. NY)
German air carrier Deutsche Lufthansa (DE:LHAG) AG said it would extend a suspension of flights to and from China because of the coronavirus outbreak.
The airline will maintain a halt on service to and from Beijing and Shanghai until Feb. 28. Nanjing, Shenyang and Qingdao service suspensions will be extended to March 28, the airline said in a statement. It will continue to fly to and from Hong Kong.
Last month, the airline announced it would suspend service to the Chinese mainland until Feb. 9.
Over 25,000 China Flights Axed Amid Virus Disruption (7:52 a.m. NY)
More than 25,000 flights to, from and within China will be canceled this week as more than two dozen airlines suspend services to the country, an unprecedented shakeup in the world’s second-largest aviation market.
China Considers Lowering 2020 Growth Expectations (6:30 a.m. NY)
Officials are evaluating whether the target for economic growth this year should be softened as part of a broader review. Further measures to shore up the economy are being considered, including increasing the planned cap on the budget deficit-to-GDP ratio and selling more special government bonds.
Economists had expected China would aim for output growth of “around 6%” this year after seeking a range of 6% to 6.5% in 2019.
China’s Biggest LNG Buyers Consider Force Majeure (6:53 p.m. HK)
China’s big state-owned liquefied natural gas importers are considering force majeure declarations on contracted cargo deliveries as they grapple with the impact from the novel coronavirus, according to people with knowledge of the situation.
Crop Cargoes Stuck at China Ports on Virus Controls (6:13 p.m. HK)
Logistical constraints at some Chinese ports due to the coronavirus are holding up deliveries of agricultural goods from soy to palm oil cargoes. While China’s economic planner said that food supply can be ensured and prices will remain stable, the port disruptions highlight the country’s vulnerability.
WHO Director-General Says Coronavirus Must Be Fought at Source (5:57 p.m. HK)
The spread of the new virus can remain “minimal and slow” if the outbreak is fought at the source and countries cooperate, WHO Director-General Tedros Adhanom Ghebreyesus said. “There is no reason for any measures that unnecessarily interfere with international travel and trade,” he said.
Hong Kong to Close More Checkpoints (5:23 p.m. HK)
Hong Kong will close more checkpoints, including two major land ports on the border with the mainland, from midnight, Chief Executive Carrie Lam said at briefing. Only three out of the 13 checkpoints will stay open, including Shenzhen Bay port, Hong Kong-Zhuhai-Macau Bridge port and Hong Kong airport. Striking Hong Kong health workers had demanded that all entry points be shut.
China Lunar New Year Passenger Volume Falls 73% (4:40 p.m. HK)
The number of trips made in China over the Lunar New Year break plunged 73% to about 190 million from the holiday last year as people were prohibited or refrained from travel.
Indonesia to Temporarily Stop Food Imports From China (4:22 p.m. HK)
The government will find alternative suppliers to replace goods from China, according to a senior official. Details of the suspension will be discussed in a coordinating meeting.
China Blasts U.S. for ‘Overreaction’ (3:56 p.m. HK)
China said the U.S. had “inappropriately overreacted” to the deadly virus originating on the mainland and hasn’t provided much help to counter the outbreak.
“The U.S. government hasn’t provided any substantial assistance to us, but it was the first to evacuate personnel from its consulate in Wuhan, the first to suggest partial withdrawal of its embassy staff, and the first to impose a travel ban on Chinese travelers,” Chinese foreign ministry spokeswoman Hua Chunying said on Monday.
PBOC Says Stock Plunge Caused by “Herd Effect” (3:46 p.m. HK)
There were some “irrational” factors in Monday’s stock slump, PBOC-backed Financial News said in commentary published on the People’s Bank of China WeChat account. The post says the impact from the epidemic on China’s economy is temporary and limited.
Russia May Deport Foreigners With Coronavirus (3:45 p.m. HK)
Russia may deport foreign citizens who are infected with the coronavirus as part of a national plan against the outbreak signed by Prime Minister Mikhail Mishustin.
The government will also postpone the flagship Sochi Economic Forum due to be held Feb. 12-14 as a precaution, Mishustin said at a televised meeting with his deputies. Russia reported its first two cases of coronavirus on Friday.
Germany Says It’s Ready for an Epidemic (3:09 p.m. HK)
Germany has sufficient quarantine facilities to handle an epidemic, but the outbreak of the coronavirus is below that threshold, Health Minister Jens Spahn said in an interview with public broadcaster ARD.
Thailand Sees Results From Drug Mixture (2:44 p.m. HK)
A cocktail of antiviral drugs appeared effective in treating a seriously ill coronavirus patient, a Thai health official said.
The HIV medicines lopinavir and ritonavir, which are sold by AbbVie Inc (NYSE:ABBV). as the product Kaletra, was used on three patients in conjunction with the anti-flu medication oseltamivir, sold by Roche Holding (SIX:ROG) AG and Chugai Pharmaceutical Co. as Tamiflu, Somkiat Lalitwongsa, director of the Rajavithi Hospital in Bangkok, told reporters.
Separately, China has kick-started a clinical trial to test a drug as the nation rushes therapies for those afflicted and scours for vaccines to protect the rest. Remdesivir, a new antiviral drug by Gilead Sciences aimed at infectious diseases such Ebola and SARS, will be tested by a medical team from Beijing-based China-Japan Friendship Hospital for efficacy in treating the coronavirus.
U.S. to Send More Evacuation Flights to China (2:31 p.m. HK)
The U.S. will be sending a “handful more” flights to bring citizens back from China’s Hubei province, U.S. Secretary of State Michael Pompeo told reporters, according to a pool report. The U.S. may bring citizens from other countries as well, the report said.
Hong Kong Medical Workers Strike (2:16 p.m. HK)
Hong Kong medical professionals began a five-day strike Monday after the government refused their demand to shut all entry points from China. Deacons Yeung, the Hospital Authority’s Director of Cluster Services, said emergency services remained normal and authorities had activated a “major incident control center” to monitor the situation.
Virus Is Most Deadly in Hubei Province (12:45 p.m. HK)
The number of official cases from the coronavirus is still highly concentrated in Hubei province. Of the 17,205 confirmed infections in mainland China so far, 65% are in Hubei, where the outbreak originated and where residents are in effective lockdown because of travel restrictions.
The virus also appears to be more deadly in Hubei, accounting for 97% of the 361 total deaths reported in the country.
U.S. Reports Additional Cases (11:20 a.m. HK)
California confirmed two new cases of coronavirus in San Benito County, bringing the total of infected patients in the U.S. to 11.
The two cases are a married couple, one of whom traveled to China. Earlier Sunday, Santa Clara’s public health department reported an additional coronavirus patient. The woman had traveled to Wuhan and visited the U.S. on Jan. 23. It’s the second case in the county, which is just south of San Francisco.
Chinese Stocks, Commodities Plummet as Markets Reopen (9:38 a.m. HK)
Chinese stocks plummeted the most since an equity bubble burst in 2015, with the CSI 300 Index dropping as much as 9.1%, as onshore financial markets opened for the first time since Jan. 23.
China’s three major commodity exchanges were hit by a wave of selling as investors returned to markets gripped by fear over the impact the coronavirus will have on demand in the world’s biggest consumer of raw materials. China’s benchmark iron ore contract fell by its daily limit of 8%, while copper, crude and palm oil also sank by the maximum allowed.
China reduced rates as it injected cash into the financial system, with the central bank seeking to ensure ample liquidity as markets plunge. It cut borrowing costs on the funds by 10 basis points.
China Virus Cases Climb Above 17,000 (8:12 a.m. HK)
China’s death toll increased by 57 to reach 361 as of Feb. 2, according to a statement from the Ministry of Health. Total confirmed infections climbed to 17,205, with the addition of 2,829 cases in the past 24 hours. There are 2,296 severe cases, the ministry said.
(An earlier version of this report corrected the timestamp on one item.)