For the watching world, China has been the test case of how to manage a COVID-19 outbreak. Now that the infection curve is flattening in China, steps are being taken to return cautiously to normality, albeit a new form of normality. International media reports on 1 and 2 April noted tighter restrictions against the spread of COVID-19 in several East Asian countries where infection curves are relatively stable, particularly China.
Several reports have implied that these restrictions represent a major policy shift, or are responses to signs of a “second wave” of infections. However, though governments in China, South Korea, Singapore and elsewhere remain very concerned about the possibility of a “second wave”, there is no sign of one yet. New policies in recent days reflect governments’ shift to focus on imported cases and, in China, efforts to prevent (rather than respond to) new outbreaks as restrictions on movement gradually ease. China has moved to limit resumption of certain types of public and recreational gatherings, but has not reversed the overall trend towards resuming economic activity.
Curve conquerors questioned
At the end of February, China had by far the world’s largest COVID-19 outbreak, with over 79,000 cases. South Korea had emerged as the second country to experience a major outbreak, with over 3,000 cases by 29 February. At the time, no other country had reported more than 1,000 cases. However, in March, both countries were increasingly cited as examples of governments which – with contrasting strategies – had successfully “flattened the curve” of infections, while the pandemic spread alarmingly in other regions.
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China’s National Health Commission (NHC) said the number of current cases (which excludes patients who have died or been discharged) was 1,727 as of 2 April; that number has fallen for more than 40 consecutive days. South Korea’s current cases have also been declining, and its cumulative total (which includes deaths and those discharged) was still under 10,000 as of 2 April – which was overtaken in March by ten European countries, the US and Iran. More than 80% of South Korea’s cases remain concentrated in or around Daegu (the city where its outbreak began), with less than 1,000 cases in the capital Seoul, Busan and Incheon combined (the three largest cities).
China has been gradually easing restrictions on movement and encouraging the resumption of business activities. South Korea never introduced very extensive restrictions in the first place. However, several media reports in recent days have highlighted new restrictions – particularly in China but also in several other Asian countries – and the risk of a “second wave” of infections. For example, Reuters on 1 April reported on new rules in China to “curb [a] second wave of infections”, while the New York Times published an article entitled “Why Asia’s New Wave of Virus Cases Should Worry the World”.
Wait, what wave?
To the extent that they suggest government actions are responses to a “new wave” of infections, these reports are misleading. As of 2 April, there is little sign of any such wave in China, South Korea or elsewhere in Asia (see Figure 2).
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There is no fixed definition of the term “second wave”, but in the current context it involves a specific, key concern of policymakers seeking strategies to contain COVID-19 without crippling economies: that is the idea that even if countries succeed in containing major outbreaks, infections will spike again when restrictions are relaxed, leading to repeated rounds of economic shutdown lasting many months.
The only two countries in Asia that have experienced major outbreaks with rapid spikes in infections, followed by a clear and reasonably sustained flattening of the curve, are China and South Korea – and there is no sign that this stable trend has been reversed in either country. Talk of a “second wave” in other parts of the region is misleading for other reasons. The pattern in most countries looks like a continuation of smaller, steadier “first waves” – as yet there are no instances where a major, large-scale surge has been contained, only to resume when restrictions are relaxed.
This is not to play down the very real risk of true “second wave” outbreaks. However, for companies trying to make sense of the COVID-19 situation, avoiding over-interpretation of news and data is as important as monitoring them. Avoiding confusion of concepts and terminology can help.
Early days
China remains the first and biggest test case for whether a second wave can be prevented while executing an exit strategy from weeks of lockdown. If it does experience such a wave, it is also likely to become a key test case for whether fresh outbreaks can be contained with targeted and localised measures, rather than a rapid, widespread re-imposition of the containment controls seen in January and February.
It is still early days for China’s efforts to return to normal life and work, and it would be extraordinary if the country, with its population of 1.4bn, did not experience further outbreaks. Authorities in Jiaxian – a county in Henan province (central China) – on 30 March reportedly suspended the main transport services and most non-essential service-sector operations, after reporting several asymptomatic COVID-19 cases. Some similar situations are likely to arise elsewhere, and would be a bigger policy test if they occur in major cities. However, even numerous localised clusters would not amount to a second wave, if they show no sign of being uncontained and reversing the positive national trend for some time.
Debates continue about the accuracy of data reporting in the early stages of China’s COVID-19 crisis in Hubei province but, regardless, there is little sign that major outbreaks are going unreported now. There are concerns that some local officials may be tempted not to report cases in order to retain a “low-risk” designation (in China’s “differentiated” containment system, low-risk localities are subject to fewer constraints on economic activity). However, even if this occurs, and even accounting for extensive censorship, it would be difficult for many significant outbreaks to remain hidden for long.
Business or leisure
Recent reports of renewed COVID-19-related restrictions have mainly focused not on the little-reported Jiaxian case, but on other government measures which mostly seem like common-sense precautions to prevent, rather than respond to, a new wave of cases. Specifically:
- The Ministry of Culture and Tourism on 28 March released a notice requiring entertainment venues including cinemas and internet cafes – some of which had recently reopened – to close.
- The General Administration of Sport on 31 March instructed sporting bodies across China not to resume large-scale sports events until further notice (Sichuan province [south-western China] on 22 March had held the first large running event in the country since the beginning of the COVID-19 outbreak).
- Authorities in Shanghai reportedly ordered tourist attractions in the city to close from 30 March.
- Premier Li Keqiang on 30 March called for greater efforts to identify and isolate asymptomatic COVID-19 cases. The NHC on 1 April began including confirmed asymptomatic cases in its regular reporting, announcing 130 such cases on 31 March, with 1,367 cases under observation.
- The government on 28 March began to ban most foreign travelers from entering the country, and from 29 March severely limited commercial passenger flights to and from China.
Importantly from a business perspective, most of these steps appear designed to minimise large-scale gatherings for leisure – a precaution with relatively limited economic costs, and which comes ahead of a long weekend from 4-6 April due to a public holiday. This is very different from reversing the resumption of broad industrial and economic activity in recent weeks – there is no sign of any such reversal.
Prevention not proof
The suspension of most inbound travel reflects China’s increased focus on imported COVID-19 cases, which have accounted for a large majority of new infections since late March. This concern also explains many of the restrictions imposed by other governments in the region in recent days, such as Japan and South Korea. South Korea’s government on 31 March also postponed the reopening of schools in the country, which had been tentatively planned for 6 April.
These are all signs that most East Asian governments will remain cautious of prematurely relaxing restrictions. However, in China and South Korea – currently the main test cases for second wave risks – this caution is not evidence of such a COVID-19 resurgence. Nor is there yet any evidence that exit strategies are failing, leaving the world to face – as one recent international media report put it – “a kind of indefinite lockdown”. On the contrary, China continues to cautiously revive activity and South Korea continues to eschew lockdown measures, offering – for now, at least – a source of encouragement rather than despair.