China has infused tumbling financial markets with cash as cases of coronavirus continue to climb, leading to fears of a "worst case scenario" of prolonged economic disruption.
The Shanghai Composite index fell nearly eight per cent on Monday amid news the death toll from the virus had risen to 361 with 17,205 cases confirmed – an increase of nearly 3000 in the last 24 hours.
The World Health Organization said the number of cases will continue to climb with thousands of tests pending. Meanwhile Chinese President Xi Jinping told an emergency meeting of the party's central committee that those who shirked responsibilities in the fight would be punished.
Financial markets around the world have been hammered by the virus that has left millions in lockdown and turned global megacities into ghost towns. Airlines have cancelled hundreds of flights while workers at some of the world's most valuable companies including Apple, Starbucks and Levi's have been told to stay home.
"The worst case scenario is that this Wuhan coronavirus rages on unchecked like the ebola crisis in west Africa several years ago," said Francis Lun, a stock analyst in Hong Kong.
In that case, it could take two or three years for China to recover, he said. "Because China is the big elephant in the room now. If it falls, it will bring down all these smaller fries like Hong Kong, Taiwan, South Korea and even Japan. So nobody is immune," Lun said.
Already analysts have revised down growth forecasts for the world's second largest economy from around 6 per cent to 5 per cent.
On Sunday, China's central bank announced it would put 1.2 trillion yuan (A$258 billion) into the markets to ensure there would be enough cash.
Chinese officials have insisted the blow is temporary, however analysts are not so sure.
"This is well beyond the Band-Aid fix, and if this deluge doesn't hold risk-off at bay, we are in for a colossal beat down," Stephen Innes of AxiCorp. said in a client note.
SCIENTISTS BELIEVE BATS THE SOURCE
It comes as Chinese scientists claim to have uncovered further evidence the coronavirus originated in bats. In two papers published Monday in the journal Nature, scientists report that genome sequences from several patients in Wuhan show the virus is closely related to the viruses that cause Severe Acute Respiratory Syndrome, or SARS.
In one study, Shi Zhen-Li and colleagues at the Wuhan Institute of Virology reported that genome sequences from seven patients were 96 per cent identical to a bat coronavirus.
SARS is also believed to originate in bats, although it jumped to civet cats before infecting people in the 2002-2003 international outbreak.
Although scientists suspect the latest virus outbreak in China began at a seafood market in Wuhan where wild animals were on sale and in contact with people, the animal source has not yet been pinpointed.
"In essence, it's a version of SARS that spreads more easily but causes less damage," said Ian Jones, a professor of virology at the University of Reading who was not connected to the two studies.
"The virus also uses the same receptor, the door used to get into human cells, which explains transmission and why it causes pneumonia," he said.
CRUISE SHIP CONFIRMS VIRUS
A person travelling on a Japanese-operated cruise ship has tested positive for a new virus after leaving the ship in Hong Kong on January 25.
The ship returned to Yokohama carrying 3,000 passengers and crew members after making port calls in Vietnam, Taiwan and Okinawa.
A team of quarantine officials and medical staff boarded the ship on Monday night and began medical checks of everyone on board, a health ministry official said on condition of anonymity, citing department rules.
He said some people on the ship have developed coughs, fevers and other symptoms, though they were not yet linked to the virus. The passengers and crew members may be quarantined on the ship if the captain agrees to do so, the official said.