Uh oh: China cancels parliament session over coronavirus as spread continues in Iran, Italy, South Korea

So much for having the coronavirus outbreak under control. While Xi Jinping’s government insists that they have turned the corner on the rapid spread of the disease, their actions tell another story. For the first time since the Cultural Revolution, the Communist Party-controlled parliament will postpone its regular March session — a major blow for state propaganda efforts in more ways than one:


China has postponed its most important political gathering as the country struggles to contain a deadly coronavirus outbreak that has spread to more than two dozen other nations.

China’s top legislature approved a draft decision on Monday to delay the annual parliament session set to take place in Beijing in March. A new date will be decided at a later time, according to state media outlet CGTN, which is owned by CCTV, the national media organization of China.

It’s the first time in decades that the assembly has been postponed, since the Cultural Revolution.

Like his predecessors, Xi uses this parliament to promote his communist propaganda as well as his cult of personality. This session would have done more than that, however — it would have sent a message of continuity, normality, and progress against the coronavirus outbreak that official party statements have claimed. Its sudden cancelation will raise even more questions about just how bad it really is, and how little truth Xi and Beijing are telling.

That impression will only get worse in Wuhan, where a previously announced rollback of quarantine measures got abruptly reversed:

On Monday, a city government statement on Weibo said that non-residents would now be able to travel out of Wuhan as long as they are healthy and not quarantined. It was the first move to ease a lockdown over the 60 million Hubei population that’s been in place for a month, and seen as a sign that China believed that the outbreak is until control.

But hours later, the statement was deleted off Weibo as well as state media sites without explanation. Shortly after, a new statement was issued on the city government’s Weibo account saying that the earlier announcement was “unauthorized” and that there would be no change to the quarantine. …

The abrupt about-turn within a matter of hours added to the confusion emanating from the devastated city of 11 million which has been sealed off since Jan. 23.

Hubei province — where Wuhan is located — has also adjusted its official count of infected people multiple times in recent weeks, fueling mistrust of the official narrative emerging from the epicenter of an outbreak that has infected almost 80,000 people and killed over 2,600.


This could be the single most destabilizing event China has experienced since Mao came to power. No one’s talking about Hong Kong protesters any more, but about the government’s inability to deal with its pandemic. Dictatorships like the Communist Party’s in China only work if the public is convinced that it’s so omnipotent that it cannot be challenged. If over a billion people become convinced that Xi and his clique are fallible — especially in such important matters — that could trigger a meltdown that would have its own global implications.

As bad as the pandemic remains there, it’s picking up steam “outside its epicenter in China,” France 24 reports this morning. Iran now has the highest level of deaths outside of China, and Italy and South Korea are racing to contain outbreaks now. Iran is of particular concern because of similar propaganda issues, and no one’s quite sure just how bad it’s getting there:

On Monday, a lawmaker from Qom – a Shia holy city 75 miles (120 km) south of the capital, Tehran, accused Iran’s health minister of lying about the scale of the outbreak.

According to the semi-official Ilna news agency, which is close to reformists, the lawmaker, Ahmad Amirabadi Farahani, said there had been 50 deaths from the coronavirus in Qom alone.

“The rest of the media have not published this figure, but we prefer not to censor what concerns the coronavirus because people’s lives are in danger,” the Ilna editor Fatemeh Madiani told Agence France-Presse.

But the country’s deputy health minister rejected the report. In a news conference broadcast live on state television, Iraj Harirchi said 12 people had died from the coronavirus and 66 had been infected. “I categorically deny this information,” he said, adding: “This is not the time for political confrontations. The coronavirus is a national problem.”


A better measure of Iran’s credibility on this point might be the reaction from its neighbors. Most have now closed their borders with Iran, which isn’t a vote of confidence in its handling of the situation.

Speaking of no confidence, investors have finally begun to react to the spread of the coronavirus. For those with money in the game, it looks like it will get worse before it gets better:

10:51 am: Emerging markets head for worst day in six months
The iShares MSCI Emerging Markets ETF (EEM) dropped 3.6%, putting the EM stocks fund on pace for its worst day since Aug. 5, when it closed 3.7% lower. EEM also dipped into correction territory, briefly trading 10% below its 52-week high. —Francolla, Imbert

10:49 am: Big decline pushes stock averages below key technical levels
Monday’s sell-off in stocks led the Dow, S&P 500 and Nasdaq to trade below their 50-day moving averages. It was the first time that the Dow broke below its 50-day average since Feb. 3. The S&P 500 and Nasdaq, meanwhile, haven’t closed below their 50-day moving averages since October. —Imbert, Francolla

Eventually the profit-takers will jump in to slow the rush, but Morganlander’s advice to seek shelter in blue chips will mean less energy behind innovation and expansion.

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