The Butterfly Effect

The Butterfly Effect

“You’re going to have a secondary hit,” one shipbroker told Bloomberg on Friday.

In a testament to just how serious China is about curbing new virus cases as the Delta variant spreads, authorities partially closed the world’s third-busiest container port after a single worker contracted COVID.

China suspended inbound and outbound traffic at the Meishan terminal in Ningbo-Zhoushan port due to what it described as a “system disruption.” That “disruption” was a 34-year-old employee, who tested positive after being fully vaccinated with two doses of the Sinovac shot. According to reports, the case was asymptomatic.

Normally, I avoid lengthy quotes, but I’ll make an exception. Xinhua’s recounting of events underscores the tedium inherent in China’s precautions:

On the afternoon of August 11, Ningbo City held a press conference on epidemic prevention and control, introducing the situation of Yu Mou, a person who was positive for the nucleic acid test of the new coronavirus during a routine test at the Zhoushan Port of Ningbo. It is preliminarily determined that there is one case of asymptomatic infection associated with foreign countries. At present, the Meishan Port area and related areas of Zhoushan Port in Ningbo, where Yu works, have been closed and controlled, and 245 close contacts have also been controlled.

The 34-year-old Yu was inoculated with two doses on January 27 and March 17, 2021. According to the epidemic prevention regulations and the requirements of port practitioners, Mr. Yu regularly conducts nucleic acid tests for the new coronavirus. In the routine tests on August 4 and 8, Yu’s nucleic acid test results were all negative. On August 10, a routine nucleic acid test was performed again, using a mixed test of 10 people, and the initial screening was positive. That night, the relevant departments conducted single inspections of Yu and his colleagues. At 5:30 in the morning on the 11th, Yu’s new coronavirus nucleic acid test was positive, and the remaining 9 people were all negative.

Immediately, the relevant departments of Ningbo and Beilun carried out an emergency response. They transported Yu and the 9 members of the same group to a designated hospital for isolation and medical observation in a closed loop, and carried out epidemiological investigations on Yu, and initially determined they were closely connected. There are 245 people. Closed control has been adopted for the port area and related areas. All personnel have stopped operations and carried out nucleic acid testing. At present, 331 samples have been collected, except for one unqualified specimen that needs to be recollected. The rest are all negative.

Now that’s dedication. Contrast the approach described in those excerpts with Florida and Texas, where the states’ respective governors remain obstinate when it comes to championing even the simplest, least intrusive containment measures despite surging hospitalizations tied to the Delta variant.

Juxtaposing China’s approach to that adopted by, say, Ron DeSantis in Florida, is something of a straw man — those are the two extremes. I mention them together because the media in the US seems to want it both ways. DeSantis is (rightfully) castigated on a daily basis for what it’s fair to call cartoonish antics in the face of imminent peril. But the same media outlets harbor (no shipping pun intended) something like condescending derision for China, to the extent Beijing’s almost pathologically obsessive approach risks hampering global trade.

I suppose the likes of Bloomberg would just say there’s a middle ground between Xi and DeSantis when it comes to virus containment. That’s true, but it’s decidedly difficult to say, definitively, what that middle ground is.

DeSantis is an annoying individual, and I don’t think he’d object to that characterization. Nor do I think he’d dispute that his approach is reckless, as long as you spent a few minutes with the thesaurus to find a PR-friendly euphemism for the word “reckless.” But if COVID isn’t going away (and it probably isn’t), then eventually we’ll all be DeSantis, only less abrasive, and with masks. Either that, or we’ll be stuck at home in perpetuity, scared to go to the grocery story without a hazmat suit.

On the other side of the argument is the Party in Beijing. It’s an authoritarian regime, and there’s probably something absurd about curtailing operations at the world’s third-busiest container port over one asymptomatic case. But if human life matters (and most of you insist that it does), then one death is too many deaths. And risking an outbreak risks lots of people getting severely ill.

Who’s “right”? Spoiler alert: Nobody. I’ve said it a thousand times if I’ve said it once. In most cases (the exception being history’s worst atrocities, and I’d be remiss not to note that Xi is committing atrocities right now, in Xinjiang), it’s best to eschew normative language. Nobody’s “right” or “wrong” when it comes to virus containment. People are just more or less moronic (on the DeSantis end of the spectrum) or neurotic (on the Xi end).

The “happy” middle ground is likely exemplified by a strategy that mandates vaccination with the Moderna or Pfizer shots, masks during outbreaks and a zero tolerance policy not for all cases, but for misinformation. A DeSantis-style, laissez-faire approach is a recipe for a macabre, made-in-the-American-south tragicomedy and Xi’s quixotic attempt to keep cases at zero in a country of 1.4 billion people no matter the economic cost both domestically and abroad, amounts to making policy based on a pipe dream. Does anyone really believe Chinese cases were (basically) zero prior to the recent outbreak? I hope not. Because that’s as naive as accepting China’s GDP numbers as an accurate representation of the world’s second-largest economy.

In any event, Ningbo-Zhoushan Port “remains open, and Meishan’s shipments can be redirected to other terminals,” SCMP said Friday, citing industry insiders, one of whom noted that “they’ll divert as many services as possible to other Ningbo terminals, but there’s still the expectation that congestion will start to form [and] the average wait time is expected to increase back to what we saw in Yantian, which was seven to nine days.”

The Yantian incident didn’t have as dramatic an effect on some of China’s economic aggregates as analysts expected, but that’s really not the point. Rather, the concern is that China’s “zero tolerance” strategy for containing the virus will ultimately make it impossible for global supply chains to normalize. That a single, asymptomatic, breakthrough case was enough to partially shut one of world’s most critical container ports feeds into the narrative, pushed by western media, that Beijing’s draconian approach to stamping out virus flareups is risky.

“China has zero tolerance for COVID. One person testing positive is enough to shut down [the] port,” one executive from the sourcing and procurement industry told CNBC, flatly. The same linked article quoted The Economist’s Nick Marro. “As long as authorities maintain this ‘zero COVID’ stance, the risk of sudden disruptions caused by testing or lockdowns will persist, which closely ties any hopes of normalcy to factors like national vaccination timelines,” Marro said.

Coming full circle to address the likely “secondary hits,” SCMP cited Project44’s Josh Brazil, who warned, “The fact that ships remain delayed, and now COVID variant outbreaks in major Chinese manufacturing hubs are on the rise, indicates there may be far-reaching downstream consequences going into Black Friday.”

Please, no. The competition at Walmart and Target for discounted flatscreens is already fierce enough on Black Friday.

I jest. But not entirely. This is the butterfly effect in action. It’s amplified by the hyper-interconnected nature of globalized supply chains.

One asymptomatic, breakthrough COVID case at a Chinese container port could end up creating a physical altercation between two unmasked, unvaccinated Florida residents fighting over the last cheap OLED, still hungover from cranberry sauce and half-drunk on turkey gravy.


 

6 thoughts on “The Butterfly Effect

  1. One asymptomatic, breakthrough COVID case at a Chinese container port could end up creating a physical altercation between two unmasked, unvaccinated Florida residents fighting over the last cheap OLED, still hungover from cranberry sauce and half-drunk on turkey gravy.

    What a closing mark!

    Considering what happened in India, a nation that is far lagged from vaccination rate, I cannot disagree with the current zero tolerance policy. Only USA can print to save the economy, not even China.

    1. Also China’s slow vaccination progress. Only 16% fully vaccinated, 28% with one dose. This is less progress than the country could have had, considering its resources and social controls.

  2. There definitely is some middle ground.
    To travel to France, all I needed was proof of vaccine. No problem.
    Once I got here, I found that everyone wears a mask indoors. Again, I was happy to comply. In addition, as of August 9, everyone (including visitors) need a QR code representing covid vaccination, to get inside any store, restaurant or food market. It was not that difficult to figure out how to get this- even for visitors. I am not going indoors anyway, except for the grocery store and a few other small shops.
    I am going home a week earlier than planned due to the US State Department raising travel concerns to Level 4- do not travel (LOL). I think US has slightly overreacted, but I don’t want to get stuck here. Not a problem, I just finished navigating how to get a covid test (I am negative), so that I can reenter the USA.
    The bureaucracy to travel is crazy, but I think worth it. On the plus side, there are very few tourists here, yet I do long for the days when all I needed was my US passport to get the world’s best steak au poivre et verre de vin de Bourgogne.

  3. As I recall, Xi’s popularity increased following the draconian, but successful, containment efforts in Hubei Province at the outset of the pandemic. More recently, the Chinese propaganda machine has sought to sow doubt as to the origins of SARS-CoV2, promoting the theory that the virus entered China from abroad with frozen food shipments, and widely spreading reports that mysterious pneumonia cases were seen in Italy in November 2019 or even earlier. With this backdrop, it is not surprising that the Chinese government continues to react to each outbreak of COVID as if it were an assault from abroad.

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