China Warns Officials Not to Cover Up Spread of Wuhan Virus

Posted on 01/21/2020 5:19 AM

Debate continues on China's purchase commitments of U.S. farm products

In today's updates:

* A viral outbreak in China is affecting markets
* China continues to insist buys of U.S. ag goods will be on market demand
* USTR & USDA officials confident China will fulfill ag product purchase commitments
* Perdue on USDA crop reports
* Trump and Macron agreed to a truce in their dispute over digital taxes
* Senate GOP leaders push accelerated impeachment trial process

President Trump will speak at Davos while his impeachment trial unfolds. The president arrived in Davos today to take part in the World Economic Forum. In his speech, Trump is expected to highlight his recent economic victories, including a new trade deal with Canada and Mexico and the Phase 1 trade agreement signed with China on Jan. 15.

The White House released a list of leaders that Trump will meet, including Iraqi President Barham Salih, Pakistani Prime Minister Imran Khan, and Nechirvan Barzani, the president of the Kurdistan Regional Government.

 

China warns officials not to cover up spread of Wuhan virus. Beijing today warned cadres (commissioned officers) not to cover up the spread of a mysterious new coronavirus that started in central China, saying anyone who withheld information would face severe punishment and be “nailed on the pillar of shame for eternity.” Chang An Jian, the official social media account of the Central Political and Legal Affairs Commission —Beijing’s top political body responsible for law and order — ran a commentary telling cadres not to forget the painful lessons of Sars and to ensure timely reporting of the current situation. A top Chinese government-appointed expert says a new respiratory virus is now being transmitted human to human, heightening fears of a possible pandemic. Link to article.

Chinese authorities said 224 patients with the coronavirus had been identified, including 217 confirmed cases and seven suspected ones. Of the 217 confirmed cases, 198 are in the central Chinese city of Wuhan, five are in Beijing and 14 are in Guangdong province, which borders Hong Kong. The virus has killed four people since it was identified earlier this month. A respiratory expert who is leading a government-appointed expert panel on the outbreak confirmed on Monday night that the disease could spread through human-to-human transmission. (The number of confirmed cases and deaths can and will likely change, as the focus is now on the topic.)

The World Health Organization said in a tweet on Monday that the latest outbreak had most likely started with an animal source but also noted there had been “some limited human-to-human transmission occurring between close contacts.”

A look back. More than 700 people were killed around the world by the severe acute respiratory syndrome outbreak in 2002-03, which originated in China. Authorities have said this latest disease was caused by a coronavirus, the same kind of pathogen involved in the Sars outbreak that Chinese officials covered up for months.

Warning. “Anyone who puts the face of politicians before the interests of the people will be the sinner of a millennium to the party and the people,” the commentary read. “Anyone who deliberately delays and hides the reporting of [virus] cases out of his or her own self-interest will be nailed on the pillar of shame for eternity,” it added.

An instruction issued by President Xi Jinping on Monday noted the virus must be “resolutely contained” and that all cadres must make “the safety of people’s lives and their physical health” the top priority. It stressed that transparency remained the best defense against rumors and public panic.

Market impacts. With the death toll likely growing and multiple medical workers infected, the illness drove Asian stocks lower amid fears over person-to-person spreading just as hundreds of millions of Chinese begin their Lunar New Year travels. Investors are still trying to gauge the potential impact but shares of European luxury-goods makers with large Chinese exposure were impacted.

U.S./China trade policy update:

  • China continues to insist buys of U.S. ag goods will be on market demand. Chinese officials continue to comment that their purchases of U.S. farm products under the Phase 1 agreement will be made based on market demand, with the latest offering of commentary from Li Xingqian, the head of foreign trade department at Ministry of Commerce. In remarks to reporters, Li said that increasing imports from the U.S. will not affect imports from other countries and that the Chinese market has large potential. He also noted that China will welcome high quality and competitive goods from the U.S. Those remarks echo what Chinese Vice Premier Liu He said at the signing ceremony for the agreement Jan. 15, “based on the market demand in China, in line with market terms, Chinese businesses will purchase 40 billion U.S. dollars of agricultural products from the United States annually,” Liu said. “If the demand is strong, the companies may buy more.” He also observed, “At the same time, this agreement is not directed at, nor will it affect, the lawful rise in interest of any third country. It is in line with WTO rules.”
  • USTR and USDA officials are confident China will live up to U.S. ag product purchase commitments. The timing of soybean purchases will not obviously accelerate during Brazil's harvest with a price spread favoring Brazil at this time, officials note. Those same officials are upbeat about U.S. beef export prospects to China, which they see commencing after some details are finalized, including getting facilities listed in China and specifics on labeling and other matters.

    U.S. Trade Representative chief ag negotiator Gregg Doud told members of the National Association of Wheat Growers and U.S. Wheat Associates that the Chinese mention of “market terms” links to seasonality. “We do not expect China to buy U.S. soybeans in the middle of the Brazilian harvest. That is what that term means,” Doud observed. “The expectation is they have a commitment to make. We expect them to make that, when it is our time.”

    Doud again noted the enforcement mechanism in the Phase 1 signed deal. “Either country has the right to put tariffs on, commensurate with the value of whatever the problem is,” he remarked. He added that when and if that were to take place, an important part is that “the other side cannot retaliate. The goal is not to have that happen — and I will tell you, that’s very sincere on both sides.”

    USDA Secretary Sonny Perdue, speaking at the Farm Bureau annual meeting, said USDA data will be fed to the office of the U.S. Trade Representative for analysis and enforcement. “There were a lot of naysayers about" about the Chinese purchase commitments. "Some still are, they say ‘Where’s the proof?’ We’re going to see the proof." Perdue added that “it may be the summer or the fall when we really see the full benefit of that $40-50 billion.” He pointed to the purchase commitments by China in the Phase 1 deal that he believes will alter China’s usual pattern of buying U.S. ag goods in the fall and winter. "If China is going to achieve that, and we believe they are, we think they have to buy earlier than the traditional export season from the United States," said Perdue.

Perdue again confirms third installment of MPF 2 is coming, not to expect an MFP 3. Perdue said the payments were “imminent, but you can define that any way you want to in Washington D.C. “We hope sooner rather than later, but we don’t have a date of release,” Perdue said, noting that will come after review and instructions from the White House Office of Management and Budget.

As for a third MFP program for 2020, Perdue repeatedly has said producers should not plan for another program. He said the Trump administration hopes normalized trade with China develops soon enough that another round of MFP “will not be needed... Now let’s grow stuff, let’s produce things and let’s sell stuff,” he said.

Perdue acknowledged the hardships of 2019 but predicted rosier days ahead. “2020 I believe will be a record year for agricultural exports,” Perdue said. “We’re talking about doubling the number of ag imports that China has ever done before, throughout the whole agricultural sector.”

Perdue on USDA crop reports. Perdue at the Farm Bureau confab noted the ag industry’s concern about recent production data from USDA’s National Agricultural Statistics Service (NASS). Some of the agency’s crop reports last year diverged from private estimates, fueling accusations that Washington was playing with prices. The frustration boiled over when a farmer made violent threats against USDA employees, causing the agency to withdraw staff from a crop tour last summer.

We got a little conspiratorial, thinking NASS was out to get us, too. I questioned them very heavily,” Perdue said. “Ultimately, I think you’ll find out their numbers … might have been more correct than the market was, ultimately.” He added that USDA is seeking suggestions to improve its data collection methods.

President Trump and French President Emmanuel Macron agreed to a truce in their dispute over digital taxes. That means neither France nor the U.S. will impose punitive tariffs this year, according to a French diplomat.

Senate GOP leaders push accelerated impeachment trial process. Senate Majority Leader Mitch McConnell (R-Ky.) on Monday released a resolution setting time limits on the impeachment trial of President Donald Trump and is specifically seeking to limit the number of session days for opening arguments that would begin on Wednesday.

Details. Under text of a procedural resolution that the Senate would vote on this afternoon, the House managers would be allotted up to 24 hours over the course of up to two days, starting Wednesday afternoon, to make the case that the president should be removed from the White House.

Democrats have already complained and will try to take procedural steps to alter the process.

If adopted without amendment, the presentation of arguments could be completed by the end of the day on Saturday. The resolution would make in order up to 16 hours combined for senators to ask questions of the two legal teams, which under existing rules for handling impeachments would be asked in writing through Chief Justice John Roberts. Key votes might take place after such questioning.


 

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