Has coronavirus tide turned in Asia and Europe?

THIS week has seen growing optimism in Asia and Europe that the coronavirus crisis may have passed its peak there. Yet, while global markets have been buoyed by these developments from Wuhan to Western Europe, it is still too early to conclusively say that the tide has turned, even in these geographies.

Across Asia, for instance, numerous countries that appeared to have the pandemic under control, from Hong Kong to South Korea, have tightened borders and imposed stricter containment measures in recent days given growing concern of new infections "imported" from elsewhere. This has given rise to speculation that rather than seeing one big lockdown in each country, on which the theory rests that countries will rapidly "bounce back" from the crisis, there may be need for a number of semi-continuous restrictions.

While it remains possible that this rapid bounce-back theory turns out to be true, several previous corona-related consensuses have been smashed in recent weeks. Remember that a little over two months ago, for instance, there was a widespread belief that the virus might be a China-only challenge.

Yet, this week's optimistic air has come not just from Asia with China lifting in Wuhan on Wednesday restrictive measures, but also in Europe where death rates may have peaked in the continent's so-far worst affected countries Italy and Spain, and the separate news announced in Monday that Austria and the Czech Republic are preparing to relax restrictions after Easter.

The news from Wuhan is particularly striking some four months after cases were publicly reported. From Wednesday, people will be allowed to leave Wuhan for the first time since the multi-month lockdown.

Moreover, in Italy and Spain, coronavirus death rates now appear to be on a downward trend, albeit still at high rates of more than 500 deaths a day. This is reinforced by news from Austria where small shops and DIY stores will reopen from April 14, as well as state parks, and, from May 1, all shops, shopping centres and hairdressers.

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The news has buoyed global markets with, for instance, the Dow Jones Industrial Average gaining almost 8 per cent on Monday and is now more than 20 per cent higher than its 52-week low of March 23 (the technical definition of a bull market). This optimism has been replicated in European markets too with the German Dax benchmark index up over 5 per cent and now also 20 per cent above its bottom in mid-March.

Yet, optimism that the tide, even in these select geographies, has decisively turned still may be premature on three main fronts.

Firstly, the fact remains that several key countries within these massive continents have almost certainly yet to hit their peak point of the crisis. Take the example of Indonesia which on Monday confirmed 218 new coronavirus cases, the biggest daily jump yet, taking the total number of infections to some 2,500 with more than 200 deaths. For a country of over 270 million people, it is almost certain that these numbers will rise, potentially dramatically.

This is also anticipated in the United Kingdom too where, with Prime Minister Boris Johnson sadly in intensive care in hospital, the virus is forecast not to peak until later this month. This is, despite the fact that as of Monday, 5,373 people who have tested positive for coronavirus have died in UK hospitals with overall confirmed infections at 51,608.

Secondly, even when the coronavirus was presumed to have been under control in certain countries, especially in Asia, there have been discouraging signs that success with containment could be prone to at least partial reversal.

Take the example of South Korea, which had been widely praised for its actions in recent weeks after a significant initial peak in infections. It has subsequently decided that new measures are needed including requiring all incoming foreigners this month to quarantine in government facilities for two weeks on entry to the country.

Thirdly, and in this context, all remaining restrictions are therefore being rescinded only very cautiously. In China, officials are rightly concerned in Wuhan about a second wave of infections as local health authorities step up detection, monitoring and supervision.

A temporary ban on all foreign visitors also remains in place, even if they have residence permits or visas. Meanwhile, Chinese and foreign airlines can also operate only a limited number of flights, and no cabins can be more than three-quarters full.

In Western Europe too, caution is uppermost in minds. For instance, Austrian Chancellor Sebastian Kurz cautioned Monday that authorities could activate an "emergency brake" if infections accelerate once more, and said coming days "will be decisive in whether the resurrection after Easter that we all want can take place". Moreover, the government is extending its three-week-old restrictions on public movement until the end of April.

Such prudence is also prevailing too in Germany, despite media speculation that restrictions could start to be lifted as soon as April 17. Chancellor Angela Merkel, however, poured cold water on this on Monday saying she's as anxious as anyone for life to return to normal in the country but that "we're still living in the pandemic" and now is not the time to talk about an end date to restrictive measures.

The wider challenges facing Western Europe were also stressed by Dr Merkel on Monday who said, like Spanish Prime Minister Pedro Sanchez on Sunday, that the EU-27 bloc is facing a potentially existential crisis. As she asserted, "the EU stands before the biggest test since its founding... Everyone is just as affected as the other, and therefore, it is in everyone's interest, and it is in Germany's interest for Europe to emerge strong from this test".

Taken overall, while there are encouraging signs in parts of Asia and Europe, it is too early to predict that the height of the coronavirus crisis is over, even in those geographies. Moreover, even if current optimism proves justified, urgent international attention will soon need to turn to other key areas of the world, including Africa and the Americas, where peaks in many countries in these continents are still some time away.