It was just over 2 weeks ago, that the Chinese Celebrated their News Years, the Year of the Rat.
Legally the New Year's celebration lasts an entire week. And businesses and factories are often closed for most of that time.
But this year, in light of the Coronavirus, the Chinese Authorities extended the holiday for another week and closed many shops and manufacturing plants.
Their objective, said the authorities, was to open those facilities a week later, which would have been this Monday just past. That didn't happen.
Instead almost all facilities, which were closed at New Years, remained closed today. With only a couple of exceptions.So as Western Observers, and investors what are we to make of all this?
Sorting out the relevant, from the irrelevant, determining what is material and what's not, is extremely problematic right now.
The conflicting reports are all over the range. The Chinese Government reports that the infection rate is down, perhaps indicating a lull in the number of cases infected.
The usual suspects, Chinese Business and large Brokerage Houses on Wall Street, say that this will pass, and we should carry on as normal.
And finally Foxcomm, the giant electronics maker of iPhones and many many other products announced yesterday that they will re-open some of their plants.
Sounds promising doesn't it? But if you're like me, in your gut you feel that all is not well, something really does seem different this time.
Let me tell you what bothers me about this, and why my scorecard says were just in the beginning of what could potentially be a very long struggle.
Let's begin with a careful look at Foxcomm. When you go to the Foxcomm Investor Relations pace, something I recommend to every investor.
You will see a notice from last Saturday. Basically the notice says that Foxcomm is fully under the control of the Chinese Authorities. They will only open their plants when the Government tells them its OK.
On Tuesday, Reuters reported that Foxcomm apparently was granted permission to re-open certain of their plants. That has to be good news to Apple Computer, and their investors.
However, there are subsequent reports that indicate the re-opening is only partial. The estimate is only 10% of those plants will be allowed to operate.
In other words just a skeleton staff, allowed to maintain the facility in working order, and hardly a re-start of production. And remember, even if Foxcomm were given an entire green light, many of their workers are confined to home quarantine, and unable to get to work.
There is a message here, one that we would do well to heed. We in the West, often forget that China is a Communist Dictatorship.
That the major decisions in that country, about who will go to work, and who will be quarantined, are ultimately made by the CPC, the Chinese Communist Party.
You only have to see those pirated YouTube Videos of people trying to escape confinement, to see the brutal, and the authoritarian impact that this is having on the Chinese Population and on the Chinese Economy.
In order to believe that his crisis will have a swift and positive ending, you must place your confidence in the Chinese Government.
Unfortunately, I feel that the PRC is caught in the horns of a dilemma.
On the one hand facing an overwhelming human contagion. One that they simply don't have the facilities to manage.
And on the other hand, facing the very real possibility of mass panic. A panic that likely could see the population rebelled against the authorities.
And so they will likely react like all authoritarians to an unmanageable problem. They will suppress the population so that at least the State will survive.
In the coming days that will become the penultimate position of the PRC, even if it means economic suicide.