The former investor and top Trump administration official has called for a careful review of supply chains linked with China. Thailand, for now, appears to have been spared an outbreak but the cost to Thailand’s tourism and export industries will range from ฿100 billion to ฿210 billion according to experts depending on when the outbreak is finally brought to an end.

The coronavirus death toll in China has reached 425 with over 19,500 infections. There is confidence, however, that Chinese authorities will now bring the situation under control even as a second death outside China has been announced overnight in Hong Kong. The crisis, however, has damaged confidence in China and deepened an already strained relationship with the United States. Last week, influential US Commerce Secretary, Wilbur Ross, suggested that the coronavirus outbreak and other catastrophes such as the swine flu epidemic and the deadly SARS outbreak of 2003 should make businesses around the world wary of future investment in the communist country. This change in emphasis and outlook, as with the US-China trade war, has also serious consequences for Thailand.

Relations between America and China have been strained further in the aftermath of the coronavirus outbreak with strident statements in the past days from US Secretary of State Mike Pompeo and the US Commerce Secretary Wilbur Ross. Mr Ross sharply criticised Chinese authorities and called for a rethink of supply chains used by American firms centred on China. The impact on the Chinese economy will be another setback for Thailand as the country is already reeling from a wipeout of Chinese inbound tourism in January which last weekend left some hotels with occupancy rates of 10% and is projected to cost anywhere from ฿100 billion to ฿210 billion.

As Thailand keeps its air links with China open for now and with the coronavirus already predicted to cost the Thai economy at least ฿100 billion, there are fears that the impact of the outbreak may be wider than anticipated even if the kingdom can avoid an outbreak of the disease.

One is the ratcheting up of political tensions between the United States and China and a drop off in investment in Thailand’s leading trade market with corresponding effects on countries linked to extended Chinese supply chains.

The turmoil and disruption caused by the outbreak may also raise problems for the implementation of the first phase of the US-China trade deal signed on January 15th last.

Death toll rises to 425 with over 19,500 infections

As China on Tuesday announced the latest death toll at 425 lives lost and over 19,500 infections, the day before, population mapping experts at the University of Southampton revealed that both Bangkok and Hong Kong are now the two cities most at risk of a possible spread of the disease as China pays the price for acknowledged incompetence and lack of transparency among local officials in Wuhan who let this virus get out of control despite knowing about it since early December 2019.

Countries worldwide have reacted negatively to China

The shock and aftermath of the outbreak, which is rippling around the world, has seen Indonesia put a halt on some Chinese imports while authorities in the United States including Secretary of State Mike Pompeo and Commerce Secretary Wilbur Ross have made known their displeasure towards China’s Communist Party and its handling of the threat.

First death in Hong Kong as medics call for a complete cutoff from the mainland until the danger recedes

In Hong Kong, as doctors and medical workers engage in strike action over the government’s perceived China-friendly reaction, the city’s embattled Chief Executive, Carrie Lam, has announced the closure of all links with China except for three, including the airport, main shipping port and the Hong Kong Macau bridge.

Hong Kong on Tuesday announced the second death from the coronavirus outside China following the death of a Chinese patient in recent days in the Philippines.

Public criticism of the Thai government’s reluctance to cut off China at this critical and dangerous time

In Thailand, the decision by the government not to halt all air links with China or even to suspend visa on arrival facilities is drawing criticism from some quarters of the online public and isolated media commentators albeit ones that like to seek out controversy.

In general, there is goodwill towards China in Thailand but there is also very real public concern at the threat.

In response, regular briefings by Thai authorities and the success of Thai doctors in treating the disease among infected patients have significantly helped ease the public’s fears.

The US, Australia and Japan are among a long and growing list of countries who have moved to close their borders to visitors from China for now while countries such as Vietnam, Singapore and Italy have suspended all flights.

Reasons are thought to be genuine compassion, political implications and fears for the tourism sector

It is understood that the reticence by the Thai government is due to three factors.

The first is a genuine wish to support a responsible global approach to the problem and to show solidarity with the country’s neighbour to the north.

The second is the political ramifications if the kingdom is seen to cut off the country’s biggest trading partner and one of its largest investors at a time of need.

The third is the even more devastating impact on the Thai economy if incoming Chinese tourists are stopped altogether.

Some Pattaya hotels reporting 10% occupancy rates

Last weekend in Pattaya, some hotels were reporting 10% occupancy rates.

One company, the owner of a chain of budget hotels, said that where it not for a long history of trading profits, it would have to lay off all its staff and close its doors while some hotels were reported to be reducing staff to part-time hours to cope with the disaster.

So far the government’s approach has worked but the consequences of the outbreak will be severe

So far, the government’s approach appears to be working as there has not been an outbreak in Thailand. Also, even though the numbers on China are growing, it is not exponential. It is becoming clear that given time, it will be brought under control. But the outbreak has exerted a heavy cost on China and to a lesser extent on Thailand.

Economic experts in Thailand have put the cost to the kingdom as anywhere from ฿100 to ฿189 billion depending on the amount of time it takes Chinese mainland authorities to finally halt the outbreak.

Already further strain on the US Chinese relationship and economic disruption within China

Even if Thailand is spared, this outbreak has already left its mark on an already deteriorating relationship between Thailand’s two biggest trading partners as tensions grow between China and the United States.

As the death toll and numbers infected rise, Monday saw the Chinese stock market and other exchanges plummet after the coronavirus is believed to have severely disrupted the country’s economy.

It has provoked a new low in already strained relations between China and the United States despite the signing of a trade deal in mid-January which many hailed as a victory for the Trump and US negotiators. 

China’s Foreign Ministry castigated the United States on Monday over its reaction to the outbreak

On Monday, a spokeswoman for the Chinese Foreign Ministry pulled no punches in her assessment of the actions of the United States since the scale and devastation of the outbreak became very clear last week.

‘The US 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 travellers,’ she said.

Harsh criticism from US Commerce Secretary Wilbur Ross as he calls for a business rethink on China

Last week, the US Commerce Secretary Wilbur Ross singled out Chinese authorities for deep and pitiless criticism of this outbreak and past failures.

The secretary warned that US businesses must think long and hard in the future about investing or linking their supply chains with the Chinese economy.

‘First of all, every American’s heart has to go out to the victims of the coronavirus,’ President Trump’s point man on trade and commerce said. ‘So I don’t want to talk about a victory lap over a very unfortunate, very malignant disease. But the fact is, it does give businesses yet another thing to consider when they go through their review of their supply chain.’

Predicted that the crisis will lead to more jobs and investment moving towards North America

The forthright Commerce Secretary and former business investor then went further and suggested that the current emergency, on top of other medical emergencies, will lead to more investment in the United States and jobs returning to North America.

Damning verdict on China – ‘a country that has a long history of covering up real risks to its own people and the rest of the world’

A later statement to the Washington Examiner in Washington DC, from the Department of Commerce, doubled down on what Secretary Ross had said and directly criticised the track record of authorities in China in handling such outbreaks.

‘As Secretary Ross made clear, the first step is to bring the virus under control and help the victims of this disease. It is also important to consider the ramifications of doing business with a country that has a long history of covering up real risks to its own people and the rest of the world,’ the statement read.

Further reading:

Thai King offers solidarity and support to the Chinese leadership during the coronavirus crisis

Thai Airways suspends flights to six Chinese destinations as coronavirus outbreak grows

Bank interest rate cut anticipated as a devastated tourism industry battles with the Chinese coronavirus threat

Taxi driver is infected by Chinese tourist as Public Health Minister supports scrapping visa on arrival

Baht has retreated by 4.8% against the US dollar since the deadly coronavirus outbreak took hold

Disease control doctor warns a virus outbreak is ‘highly possible’ in popular Thai tourist areas

Thailand and Hong Kong plot closer economic ties and free trade pact as the city is mired in political crisis

RCEP deal agreed as India opts out – busy Bangkok ASEAN summit concludes on a low key

UN Secretary-General warns of a fractured world at the ASEAN summit over US-China split