Reports from the Epoch Times suggest China may have another massive coronavirus outbreak in Harbin. What does this mean for stocks?
Northern China is believed to be the origin of the incorrectly-named Spanish influenza, and now the region could be facing another viral catastrophe. According to reports from the Epoch Times, China’s Heilongjiang province is experiencing a devastating coronavirus outbreak. And unconfirmed videos show overwhelmed hospitals reminiscent of the outbreak in Wuhan.
Global stock prices have posted a strong recovery over the last month as nations move to scale back lockdowns and reopen their economies. But the possible resurgence in Chinese infections suggests this move could be premature.
China is censoring information to bolster its narrative of controlling the coronavirus pandemic. But the lack of reliable information could leave the rest of the world blindsided to the second wave of coronavirus infections emerging within its borders. This situation poses a significant risk to stock market futures going into the weekend. And the market could find itself giving back much of its gains as more information becomes available.
The coronavirus pandemic has eroded the Chinese Communist Party’s credibility. The CCP would rather save face than provide the world with the data it needs to respond to developments within its borders accurately. And that’s why China’s coronavirus data should be taken with a grain of salt.
China officially reported 46 new coronavirus cases on Thursday, bringing the total to just over 82,000. It also dramatically revised its total death count in Wuhan from 2,579 to 3,869 — a number that still may dramatically undercount the real number of fatalities.
But this may all be a smokescreen for the disturbing developments in Northern China.
Earlier in the week, the Chinese government reported 79 new coronavirus cases in Heilongjiang, a far northern province that borders Russia. State-run media claims these cases were “imported” from people returning from Russia. Regardless of the truthfulness of that claim, these new cases may be part of a larger outbreak the Chinese communist party is trying to cover up.
According to Epoch Times, the second wave of coronavirus has erupted in Harbin, the capital city of Heilongjiang province, China. The New York-based outlet cites sources on the ground who report a severe outbreak reminiscent of Wuhan in earlier stages of the pandemic.
The following video, filmed in Harbin, purports to show 5,000 to 6,000 potentially infected people lined up outside the “First Affiliated Hospital of Harbin Medical University.” The Epoch Times claims these people are seeking treatment for potential COVID-19 infection.
Lines outside Chinese hospitals are not uncommon. But the Epoch times reports other developments that suggest the situation could be worse than China is letting on. According to the outlet, police are stopping drivers from entering the city, stating the following:
Harbin is under quarantine now. All cars should go back to the place where you came from. No car is allowed to enter Harbin.
Unconfirmed reports also show workers walling off what looks to be residential compounds in the city. Last month, Chinese authorities expelled American journalists from the country, so it’s difficult for U.S media outlets to investigate the outbreak in Harbin independently. This makes it easy for the Chinese Communist Party to downplay the severity of the situation.
China’s seeming success in controlling the coronavirus pandemic has led the world to imitate its strict lockdowns and travel restrictions. And financial markets are confident that the strategy will work. After a sharp decline in February, stocks are beginning to recover because investors believe things will quickly get back to normal.
The S&P 500 has recovered around 20% since mid-March as policymakers develop timelines for reopening their economies.
But China may be hiding a dangerous secret — the Communist Party may not have controlled the coronavirus pandemic as well as it claims. And the second wave of deadly infections could unravel the progress the country has made towards reopening its economy. This could drag global markets back into a tailspin.
Investors should keep a close eye on Harbin because it could be the canary in the coal mine for what will happen to the rest of the world once the lockdowns end.
Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.
This article was edited by Aaron Weaver.