Coronavirus: first Chinese province that declared top-level emergency downgrades alert status

• Zhejiang province, which is China’s key export and manufacturing base, declared a Grade I emergency on January 23, a day before the epicentre of Hubei
• According to the Zhejiang Health Commission, there have been no new confirmed cases of the coronavirus in the province for nine days

Karen Yeung source : South China Morning Post

Published: 5:45pm, 2 Mar, 2020

China’s key export and manufacturing base of Zhejiang province, which was the first to declare the highest level of emergency in response to the coronavirus outbreak, downgraded its alert status on Monday.

The coastal province of 57 million residents declared a Grade I emergency on January 23, a day before the epicentre of Hubei province, but is the latest in a number of provinces to ease restrictions in a bid to ramp up 

economic activities.

According to the Zhejiang Health Commission, there have been no new confirmed cases of the coronavirus in the province for nine days. A total of 1,205 confirmed cases have been reported, with one death, while 1,050 patients have been discharged.

“All counties [cities and districts] in the province are green and low risk, and the epidemic situation continues to improve,” the commission said.

The decision by the Zhejiang government echoes the call from China’s top leaders for local authorities to decide the appropriate level of measures in place to stop the spread of the coronavirus.

Guangdong, along with at least eight other provinces, had already lowered their public health emergency responses from the highest level of Grade I to Grade II and Grade III.

Provinces that have downgraded their response level account for 51 per cent of the national gross domestic product (GDP), up from 33 per cent on February 25, said Robin Xing Ziqiang, China economist at Morgan Stanley Asia, before the decision by Zhejiang province.

Zhejiang contributed 5.62 trillion yuan (US$804 billion) to China’s GDP in 2018, the fourth largest on a list topped by Guangdong with 9.73 trillion yuan.

China has already unveiled 

fiscal and monetary policy

 support in response to the coronavirus outbreak, especially for the small medium-sized enterprises (SMEs) that are the key drivers for the Chinese economy as they account for most of employment, but have so far struggled to resume normal operations.

Risk of coronavirus spreading globally now ‘very high’, World Health Organisation says

The central bank has made 500 billion yuan (US$51.5 billion) of additional funds available for commercial lenders to lend to SMEs, while commercial banks have also been told to offer temporary relief by delaying 

loan or interest payments

 until the end of June.

China’s 

official purchasing managers’ indices

 for manufacturing and services plummeted to all-time lows over the weekend, signalling a sharp contraction in both sectors, which was confirmed by Monday’s 

Caixin/Markit manufacturing purchasing managers’ index.

Lu Ting, chief China economist at Nomura Hong Kong, said that most activity data in China is expected to be close to zero or even negative in terms of growth in March because not all businesses will have resumed operations and based on the current progress and the lockdown measures in place in Hubei province.

“We caution that there is still a risk of a second wave of [coronavirus outbreaks], given more migrant workers returning to work places,” Lu said.

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