What to make of the jump in COVID-19 cases - Capital Economics
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What to make of the jump in COVID-19 cases

China Economics Update
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A jump in reported cases and deaths appears to reflect the official figures getting a better grip on the true extent of past infections, rather than indicate a recent acceleration in the spread of the virus. If anything, the latest data continue to hint at a slowdown in new infections and a mortality rate lower than initially feared. As such, we don’t think the jump in reported cases will necessarily derail efforts to get businesses back up and running in the coming days.

  • A jump in reported cases and deaths appears to reflect the official figures getting a better grip on the true extent of past infections, rather than indicate a recent acceleration in the spread of the virus. If anything, the latest data continue to hint at a slowdown in new infections and a mortality rate lower than initially feared. As such, we don’t think the jump in reported cases will necessarily derail efforts to get businesses back up and running in the coming days.
  • Hubei province has reported 14,840 new COVID-19 cases this morning, far exceeding the previous daily record of 3,156 set on 4th February. New deaths also more than doubled to 242. National figures have yet to be published but are likely to follow a similar pattern since Hubei is responsible for three quarters of all COVID-19 cases in China and 96% of all deaths. (See Chart 1.)
  • The jump in new cases and deaths reflects the inclusion of patients who have been diagnosed with COVID-19 by clinical means, such as chest X-rays, rather than laboratory tests which hospitals have been unable to ramp up quickly enough to diagnose all suspected patients. (See Charts 2 & 3.) The large number of clinically diagnosed patients being added to the data confirms what many had suspected – that the official figures were understating the prevalence of the virus in China. But it doesn’t necessarily imply that the spread of the virus has accelerated recently. If that were the case, one would expect to see a continued rise in the number of laboratory tests coming back positive. But instead, the number of such cases has been falling, a trend that continued in the latest data. (See Chart 2 again.)
  • Of course, there is still a great deal of uncertainty about both the accuracy of the official data and how the virus will develop going forward. Things should become slightly clearer once we have a few more days of new data using the broader definition of COVID-19 cases. But for now, the latest figures don’t appear to undermine the recent tentative signs that the spread of the virus may be slowing. What’s more, even on the new data, the number of recoveries has continued to rise at a faster pace than deaths, adding to evidence that the virus is probably less deadly than initially feared. (See Chart 4.) Given this, and mounting concerns about the economy, we think that efforts to ease the disruption to business activity are likely to continue.

Chart 1: Cumulative COVID-19 Cases & Deaths

Chart 2: New COVID-19 Cases – Hubei

Chart 3: New COVID-19 Deaths – Hubei

Chart 4: Cumulative COVID-19 Recoveries & Deaths – Hubei

Sources: CEIC, Capital Economics


Julian Evans-Pritchard, Senior China Economist, +65 6595 1513, julian.evans-pritchard@capitaleconomics.com