So much can change in just 24 hours.
It was just yesterday that China's top twitter troll and Beijing propaganda voice to the west, Global Time Editor in Chief Hu Xijin was downplaying the risk from the coronavirus outbreak, comparing it to the SARS epidemic in 2003, and saying that "during SARS epidemic, even many medical staff contracted virus and died of it. It doesn't look the same this time."
Chinese society is mobilizing to deal with the new coronavirus. But its risks of human-to-human transmission and fatality rate appear lower than SARS. During SARS epidemic, even many medical staff contracted virus and died of it. It doesn't look the same this time. https://t.co/k43u1R4d5c— Hu Xijin 胡锡进 (@HuXijin_GT) January 20, 2020
Oops, because just a few hours later, we got confirmation that at least 15 medical staff had in fact contracted the virus which now appears to be spreading human-to-human, as six people have died among 291 confirmed cases in China, eliminating any attempts to further downplay the significance of the coronavirus epidemic which has reportedly infected hundreds of people across China.
So in a dramatic 180-degree reversal, the same twitter troll now had an entirely different message to the word: not only is "the epidemic expanding" and "concerns are mounting", but more importantly, "It is inevitable that people will cut their trips during Spring Festival and holiday consumption will be hit."
Coronavirus cases have been found in other places out of Wuhan, Hubei Province, indicating the epidemic is expanding. Concerns are mounting. It is inevitable that people will cut their trips during Spring Festival and holiday consumption will be hit.— Hu Xijin 胡锡进 (@HuXijin_GT) January 21, 2020
So what happened? It appears Beijing decided to not let a perfectly good crisis go to waste, and just as "trade war" was used as a 2019 scapegoat on which to blame the slowdown in the economy, an economy which is rapidly slowing down for vastly different reasons, it will now blame the coronavirus epidemic on the ongoing slowdown of the Chinese economy.
The reason reason for the slowdown? China's ghastly debt load of over 300% of GDP...
... while in turn makes it impossible for the country to inject substantial new debt into the economy to kickstart a new, and much-needed reflationary episode.
And since every attempt at deleveraging in the past decade has proven catastrophic, expect many more Chinese "exogenous" events which will be blamed for the country's continued GDP shrinkage from 7% to 6% and now to a 5-handle.