It seems Chinese investors have called President Trump's bluff.
Markets in Shanghai and Shenzhen resumed trade on Wednesday with early losses, after a five-day long weekend. That was the first time for investors to respond to renewed hostilities that again threaten China-U.S. trade.
But Chinese shares ended the day with modest gains. The CSI 300 blue-chip index rose 0.6%. Chinese punters are paying more attention to the likelihood of Chinese stimulus. The Communist Party is keen to keep its citizens happy ahead of its major political meeting now due to start on May 22. The central People's Bank of China also appeased U.S. hawks by setting the Chinese yuan at a neutral rate, at 7.07 to the U.S. dollar.
At this stage, Trump's attacks amount to hot air. In Chinese, we call it "blowing water," or chit chat, idle talk.
Trump last Thursday threatened China with new tariffs. This week, U.S. Treasury Secretary Steve Mnuchin warned of "very significant consequences" if China doesn't follow through on commitments to buy U.S. goods made in its "Phase 1" trade deal with the U.S. Those are worrying sounds here in Hong Kong, bashed last year by trade war winds.
On Tuesday, Trump said the U.S. is ready to dish the dirt about how a Chinese lab mishap led to Covid-19 cursing the world. He earlier told a reporter he has seen evidence that gives him a high degree of confidence that the virus originated from a Wuhan lab. But when asked what the evidence is, he said "I can't tell you that. I'm not allowed to tell you that."
Trump now says the U.S. will issue a full report on the origins of the virus. "We will be reporting very definitively over a period of time," Trump said on Tuesday.
Trump has yet to prove that he is not propagating yet another conspiracy theory when he claims that the SARS-CoV-2 coronavirus leaked from the Wuhan Institute of Virology, China's first biosafety level 4 lab. Numerous scientists have stepped forward to say the DNA indicates the virus is of natural origin, not man-made.
There are plenty of people here in Hong Kong who believe the lab theory too, without a shred of evidence. I'm sorry, but when U.S. Secretary of State Mike Pompeo says he has "enormous evidence" that Chinese lab technicians messed up, show us the proof. Otherwise keep quiet until you are ready to do so. It's not just hot water, it's irresponsibly vague.
Incidentally, the U.S. partly funded the Wuhan Institute of Virology during the Trump administration. Under his watch, the National Institutes of Health funded the EcoHealth Alliance to the tune of US$700,000, a total of US$3.7 million provided by the NIH to that institution. Part of the money backed the Wuhan lab, which got BSL-4 status in 2015.
There's been an attempt to claim that former President Obama "funded" the Wuhan lab. But the funding continued between 2014 and 2019, without money directly going from the U.S. government to the lab.
Neither is the biosafety level 4 lab "next to" the Huanan seafood market where many of the early Covid-19 cases originated. That's a different lab, the Wuhan Center for Disease Control and Prevention, which is less than a mile away. The virus lab is eight miles away. Close, but not next door.
Incidentally, China in 2018 opened a second biosafety level 4 lab, in Harbin, which specializes in large-animal research. It is in Heilongjiang Province, which now has China's biggest current outbreak of Covid-19. The virus - probably imported back from Russia, but hey why not released from that lab while we're at it? - has caused 558 locally transmitted cases and 386 imported ones. Heilongjiang Province has reported no new cases since five were identified last Thursday.
Although the Wuhan lab is painted as a top-secret bioweapons lab, the lab has cooperated with U.S. scientists on numerous occasions since it was set up. There have been small-scale accidental releases of SARS in China, as scientists investigate this precursor that hit us here in Hong Kong so hard in 2002-03, although not in Wuhan. The idea that the new virus is related to HIV comes from debunked research in a draft paper, not peer reviewed, that a team of Indian researchers posted online, before withdrawing it.
The most-similar virus to the one that causes Covid-19 occurs in bats. But a virus with spikes on it, like this coronavirus, is found in pangolins, although that virus is overall less like SARS-CoV-2. Bats harbor a lot of viruses that don't particularly affect them but can infect other animals because they are the only flying mammal, which has caused special DNA adaptations.
Pompeo might have proof the virus is from that lab. Let's see it. It would be damning. But for more "evidence" on the Wuhan lab conspiracy theory, check out the terrific Snopes.com site that investigates the scary mix of truth and untruth behind so many "facts" and "theories" online. The site is very useful for checking health claims about the virus.
Meanwhile lots of conspiracy theorists have run the math that BSL-4 + 8 miles + Covid-19 = 4. They've also got plenty of proof that the CIA were behind 9/11, and the Sandy Hook school massacre never happened. Oh and if a vaccine for Covid-19 becomes available, they'll tell you it causes autism. One theorist has been peddling bleach as a miracle cure: a familiar refrain.
We want someone to blame for Covid-19. It has unleashed a lot of pain. It isn't quite enough to blame Mother Nature, or the human interference with nature that caused a virus to leap from bats to another species, maybe pangolins, then to us.
Wuhan is clearly the epicenter of the outbreak, despite Beijing's attempts to muddy those waters. China has a lot of answering to do, after covering up the virus. It was too slow in its initial response. Various authorities behaved horribly toward Chinese people during lockdown.
But China is far from the only government to have messed up its first moves against the virus. Hong Kong, Taiwan and Vietnam moved fast against the virus, and have relatively few cases. Places without experience of SARS struggled to see this coming.
If there's a sinister origin behind this outbreak, fine, let's see that evidence. The stock market movements in Shanghai and Shenzhen suggest the owners of Chinese stocks aren't too worried the blowback is going to hit them. Politicians are grandstanding, while the rest of us try to get back to business.