Thanking big brother

China’s post-covid propaganda push

China is handing out medical kit, and making sure the cameras see it

CHINA CALLS it the biggest emergency-aid operation that it has mounted abroad since 1949, when the Communist Party seized power. Hardly a day goes by without news of Chinese medical supplies, from masks to ventilators, reaching grateful recipients; and of Chinese medical teams flying to foreign countries to help them fight covid-19.

Just a few weeks ago China was by far the biggest victim of the new coronavirus, and its government was widely chided for covering up the initial outbreak. Now China is trying to paint a new picture—of itself as a model for taming the disease, and as the world’s saviour.

State media are on hand to trumpet each donation, no matter how small. On March 21st a freight train set off from the eastern Chinese city of Yiwu bound for Madrid, more than 13,000km away. In addition to its cargo of commercial goods were 110,000 masks and nearly 800 protective suits donated by a state-owned firm (they arrived more than two weeks later).

The aid was worth less than $50,000. But a state-media website called it a “new turning-point” in the building of a “health silk road”. Among slogans reportedly affixed to the train was one saying: “Come on, matadors!”

It is hardly surprising that China is turning its attention to the plight of other countries. Its covid-related data are of dubious quality, but it has clearly achieved a dramatic reduction in infections at home. Almost all of its newly reported cases involve travellers from abroad.

As the world’s biggest producer of much of the medical kit that is most urgently needed globally, and with its own demand for it much reduced, China is well placed to assist. Indeed, in a pandemic, “to help others is also to help oneself”, as a Chinese spokeswoman put it.

China, however, also sees potential political rewards. A big one is enhancing its power abroad. Even before the pandemic China had been jostling with America for global influence. Now it sees America crippled by the coronavirus, and the country’s president, Donald Trump, fumbling in his response to the crisis and unwilling to organise an international effort to fight the disease.

At a five-yearly party congress in 2017, President Xi Jinping said his country would become a global leader by mid-century in terms of “international influence”. That goal is evident in China’s descriptions of how the world should evolve in response to covid. In effect, it should have China even more at the centre.

Another political gain that the party may hope to reap is at home. Playing up China’s help for stricken countries, and their desire to learn from China’s success, helps to deflect public criticism of the party’s early response to the disease—its gagging of doctors who shared information about it online and its failure to warn citizens despite evidence of human-to-human transmission.

State media insist that China’s battle against covid-19 has shown the “superiority” of Chinese-style socialism, with its “unique” ability to marshal people and resources. Burnishing Mr Xi’s image as a figure of global stature helps to reinforce this message. Any phone call between Mr Xi and a world leader to discuss the crisis makes the headlines of state television’s nightly news, no matter how banal the publicly released content. Mr Xi is the dependable, magnanimous statesman. No prizes for viewers who can guess who, by implication, is not such a politician.

The party’s propaganda about the aid effort is suffused with Mr Xi’s catchphrases. Take the health silk road that the train to Spain symbolically followed. The metaphor was first used by Mr Xi in 2017, when China signed an agreement with the World Health Organisation (WHO) to establish a health-related subset of the Belt and Road Initiative, China’s global infrastructure-building project (to which the WHO was the first UN body to sign up).

The belt-and-road idea, and all associated silk-road-branded schemes, are closely linked with Mr Xi. Their content is vague—no clear definition has been offered, for example, of a health silk road. But the intent is clear: to portray China as fundamentally benign. The roads span the globe, but all lead back to China.

In his discussions with world leaders about covid-related aid, Mr Xi likes to use another of his favourite expressions: building a “community with a shared future for mankind”. It sounds harmless enough, but central to this idea is a principle that China holds dear, namely that of respecting other countries regardless of their political systems.

Various formulations of this have been used since the days of Mao Zedong (Mao’s favoured term, the “five principles of peaceful coexistence”, remains in use). It means that other countries should swallow any misgivings about the way China is ruled and show it respect.

On March 26th, at an online meeting of G20 leaders, Mr Xi prefaced his offer to share China’s experience of fighting the disease and co-operate in the search for a vaccine by emphasising China’s commitment to “the notion of a community with a shared future for mankind”. The “urgency and importance” of creating such a community had become “even more evident” during the pandemic, he told the president of Kazakhstan, Kassym-Jomart Tokayev, two days earlier.

Some commentators in China say the country’s medical aid could help to strengthen China’s attractive “soft power”, as opposed to the hard kind involving military and economic might.

Building such power has been one of the party’s goals since a party congress in 2007. Mr Xi has devoted particular attention to it, beefing up projects such as Confucius Institutes and global broadcasting ventures that aim to convey sanitised news about China to Western audiences, delivered in a disarmingly Western style.

During the pandemic, China’s state media as well as the country’s diplomats have been using Twitter and Facebook (which are blocked in China itself) to promote China’s charitable efforts.

Experts say that thousands of the Twitter accounts used for this are “sock-puppet” ones set up to spread disinformation.

The propaganda campaign has been helped by America’s virtual absence from the world stage during the pandemic—in part because of Mr Trump’s lack of interest in global leadership, and in part because of the damage caused by covid-19 at home. America has even found itself in the embarrassing position of clawing back aid it was meant to give. In March its Agency for International Development (USAID), which played a crucial role in helping African countries contain Ebola in 2014-16, began cancelling shipments of medical supplies abroad because they were needed in America.

And as the Trump administration and American governors and hospitals scour the world for masks, gowns and the like, they are infuriating allies who need the same things. Early this month officials in France and Germany accused America of diverting shipments of medical masks that had been intended for use in their countries. Officials in Washington have denied the reports, but they reinforce the view, held in much of the world, that America is looking out only for itself.

Mr Trump’s decision on April 14th to suspend his country’s payments to the WHO because of its handling of the pandemic will strengthen this belief, even though many Western officials sympathise with his view that the WHO failed to challenge China’s early claims about the low risk of transmission among humans (see article).

However, winning hearts and minds is not proving easy for China, either. It does not help that, for all its propaganda about Chinese generosity, the value of China’s donations is far eclipsed by that of its sales of medical kit (occasionally of low quality, buyers allege) on commercial terms.

Between March 1st and April 4th China exported $1.45bn of medical supplies globally.

Most of the sales to the rich world have been at market prices. By the time the train arrived in Madrid, Spain had already bought similar equipment from Chinese suppliers worth about 10,000 times as much as the stuff sent by rail.

It may be that China has not worked out an aid strategy, with a clear sense of which countries to target as a priority and how much should be given away free. Indeed, it has been happy to let companies, both state-owned and private, do much of the work. Some of the country’s largest firms have taken up the challenge, but they are relative newcomers to philanthropy. They also have commercial interests at stake in many of the recipient countries.

Bounty from businessmen

Jack Ma, the billionaire co-founder of Alibaba, an e-commerce giant, has been at the forefront. Along with Alibaba’s charitable foundation, he has sent planeloads of ventilators, protective kit and covid-19 tests for distribution to all 54 African countries. Huawei, a telecoms firm treated by America as a threat to its security, has already delivered a large share of its pledge of 500,000 masks, 50,000 goggles, 30,000 gowns and 120,000 gloves to hospitals in New York.

The company has also donated millions of masks to countries that are pondering whether to allow Huawei into their 5G networks, including Canada and the Netherlands.

In parts of Europe, China’s aid may have won admirers. A large billboard thanking “big brother Xi”, paid for by a pro-government Serbian tabloid, appeared in Serbia’s capital, Belgrade (see picture above,). Lucrezia Poggetti of MERICS, a think-tank in Berlin, says public discontent with the EU and distrust of Mr Trump’s America has worked in China’s favour.

This month a poll commissioned by an Italian television station asked people which country they would prefer as an ally outside Europe. Of 800 respondents, 36% favoured China and only 30% chose America.
Do the masks have strings attached?

But to many in the West, China’s propaganda drive sounds cynical, exploitive and forgetful of the aid that the West gave China at its time of need. In early February America and Europe sent 30 tons of medical supplies (much of it privately donated).

President Emmanuel Macron of France complained that people talk of Chinese and Russian aid to Europe. “But no one talks about France and Germany delivering 2m masks and tens of thousands of medical gowns to Italy,” he said. The EU’s foreign-policy chief, Josep Borrell, warned about the “politics of generosity”.

In poor countries, China’s charity may prove more effective. In Africa the shipments are urgently needed—a point that China’s extensive media network on the continent is keen to highlight (news outlets across Africa use stories from Xinhua, China’s state news agency). But America is still a far bigger donor on the continent and to the UN. Last year China gave $368m to the UN’s general budget, 55% of America’s contribution (see chart).

China’s image has taken a severe hit in Africa as a result of the recent evictions of some Africans from their residences in the southern Chinese city of Guangzhou after reports that a few of them had been infected by covid-19. Images of Africans forced to sleep on the streets have been widely shared by social media in their native countries.

The Daily Nation, a Kenyan newspaper, accused China of “betrayal”. Several Chinese envoys in Africa have been summoned for dressings-down by host governments. China says it will gradually lift health-related restrictions on Africans in Guangzhou, and denies discrimination.

Among developing countries, China is as likely, if not more so, to win support by providing economic help as it is by giving medical aid. In Africa, China is the largest bilateral creditor, having lent more than $140bn since 2000 (see chart).

On April 6th Ken Ofori-Atta, Ghana’s finance minister, said China should “come on stronger” by restructuring or writing off some loans, which he said would require $8bn to service this year. The World Bank and the IMF have proposed that creditors co-ordinate to provide debt relief.

On April 15th the G20, which includes China, agreed to allow developing countries to suspend debt payments to its members for the rest of the year. But when it comes to restructuring loans, China may prefer to go it alone rather than work closely with other lenders. In recent years it has been willing to change the terms of its debts, for instance last year those owed by the Republic of Congo.

But it likes to act quietly, case-by-case. That way it can maintain the political leverage that its lending provides. Last year China reportedly cancelled $78m owed by Cameroon. A month later Cameroon withdrew its candidate (and the African Union’s choice) for director-general of the Food and Agriculture Organisation, a UN body, clearing the way for China’s candidate to get the job. Some Western critics called this a quid pro quo.

During the pandemic, China has shown readiness to shake its fists as well as woo countries with kindness. Its deployment of “sharp power”, as some call it, has been evident in its response to suggestions that China may have exacerbated the pandemic with its early cover-up. Chinese embassies in several countries have sputtered with outrage when prominent personalities, from the son of Brazil’s president, Jair Bolsonaro, to Mario Vargas Llosa, a Peruvian author, have aired such a heretical thought.

China’s embassy in Lima accused Mr Vargas Llosa of making “absurd and baseless criticisms” of China in a column blaming the initial cover-up on China’s dictatorial system. Some Chinese diplomats have even reacted with fury when people point out that the virus originated in China.

Chinese leaders do not offer a clear blueprint for shaping the global order. But back in 2017 Mr Xi gave a hint of China’s long game when he proclaimed that it had taken “a driving seat” in international affairs and would be “moving closer to centre stage and making greater contributions to mankind”. This does not appear to involve converting countries to Chinese-style socialism.

China’s aims are often self-defensive, to protect itself from criticism and challenges to its territorial claims. (When Bruce Aylward, an adviser to the WHO, pretended not to hear a reporter’s question about Taiwan, China’s media were delighted.) However, China does try to persuade others to adopt its peculiar view of human rights. It discounts individual freedoms, gives priority to economic development and thinks governments should police the internet as they wish.

Whether China will be able to take advantage of the pandemic to strengthen its global power will depend not least on the politics and economies of China and America post-covid. By stoking its economic growth following the global financial crisis of 2007-09, China gained much clout while the West slumped. It may not be able to replicate that effect this time: another massive dose of stimulus could cripple the country with debt. China is wary of repeating the tactic.

As the world emerges from the crisis, the West’s attention is likely to become more focused on China’s early handling of the outbreak, the reliability of its covid-related data and on Western vulnerability to China’s control of vital supply-chains, not least in medical industries. Such issues could fuel anxieties about China’s global influence and make it harder for China to shape the world to its liking.

Should he win America’s presidential election in November, Joe Biden may reassert a liberal vision of the world order, including support for multilateral institutions and regional alliances that have been disparaged and neglected by Mr Trump. And China may stumble. Another wave of infections could undermine the party’s claims to superior handling of the disease.

Soaring unemployment could exacerbate social tensions at home and deter China’s leaders from engaging in a triumphalist march abroad.

For now, as America flounders, China appears a diffident leader at best. Its hesitancy was on display at the UN last month, when it was China’s turn to act as president of the Security Council. Throughout the month, it did not convene a single session about the pandemic. (On April 9th the council did hold one, but China insisted that the meeting, held by video-conference, be closed to the public.)

Envoys to the UN say China did not want to give America a chance to assign blame for the pandemic. “It’s irresponsible,” says a Security Council diplomat. Instead two diehard rivals refuse to lead. One is in retreat; the other is uncertain whether it really wants to take on global responsibility. The world suffers.

A grim calculus

Covid-19 presents stark choices between life, death and the economy

The trade-offs required by the pandemic will get even harder

 Imagine having two critically ill patients but just one ventilator. That is the choice which could confront hospital staff in New York, Paris and London in the coming weeks, just as it has in Lombardy and Madrid.

Triage demands agonising decisions. Medics have to say who will be treated and who must go without: who might live and who will probably die.

The pandemic that is raging across the world heaps one such miserable choice upon another. Should medical resources go to covid-19 patients or those suffering from other diseases?

Some unemployment and bankruptcy is a price worth paying, but how much? If extreme social distancing fails to stop the disease, how long should it persist?

The governor of New York, Andrew Cuomo, has declared that “We’re not going to put a dollar figure on human life.” It was meant as a rallying-cry from a courageous man whose state is overwhelmed. Yet by brushing trade-offs aside, Mr Cuomo was in fact advocating a choice—one that does not begin to reckon with the litany of consequences among his wider community.
It sounds hard-hearted but a dollar figure on life, or at least some way of thinking systematically, is precisely what leaders will need if they are to see their way through the harrowing months to come. As in that hospital ward, trade-offs are unavoidable.

Their complexity is growing as more countries are stricken by covid-19. In the week to April 1st the tally of reported cases doubled: it is now nearing 1m. America has logged well over 200,000 cases and has seen 55% more deaths than China.

On March 30th President Donald Trump warned of “three weeks like we’ve never seen before”. The strain on America’s health system may not peak for some weeks. The presidential task-force has predicted that the pandemic will cost at least 100,000-240,000 American lives.

Just now the effort to fight the virus seems all-consuming. India declared a 21-day lockdown starting on March 24th. Having insisted that it was all but immune to a covid-19 outbreak, Russia has ordered a severe lockdown, with the threat of seven years’ prison for gross violations of the quarantine. Some 250m Americans have been told to stay at home. Each country is striking a different trade-off—and not all of them make sense.

In India the Modi government decided that its priority was speed. Perhaps as a result it has fatally bungled the shutdown. It did not think about migrant workers who have streamed out of the cities, spreading the disease among themselves and carrying it back to their villages .

In addition, the lockdown will be harder to pull off than in rich countries, because the state’s capacity is more limited. India is aiming to slow its epidemic, delaying cases to when new treatments are available and its health-care system is better prepared.

But hundreds of millions of Indians have few or no savings to fall back on and the state cannot afford to support them month after month. India has a young population, which may help. But it also has crowded slums where distancing and handwashing are hard. If the lockdown cannot be sustained, the disease will start to spread again.
Russia’s trade-off is different. Clear, trusted communications have helped ensure that people comply with health measures in countries like Singapore and Taiwan. But Vladimir Putin has been preoccupied with extending his rule and using covid-19 in his propaganda campaign against the West.

Now that the virus has struck, he is more concerned with minimising political damage and suppressing information than leading his country out of a crisis. That trade-off suits Mr Putin, but not his people.

America is different, too. Like India, it has shut down its economy, but it is spending heavily to help save businesses from bankruptcy and to support the income of workers who are being laid off in devastating numbers.

For two weeks Mr Trump speculated that the cure might be worse than the “problem itself”. Putting a dollar figure on life shows he was wrong. Shutting the economy will cause huge economic damage. Models suggest that letting covid-19 burn through the population would do less, but lead to perhaps 1m extra deaths. You can make a full accounting, using the age-adjusted official value of each life saved.

This suggests that attempting to mitigate the disease is worth $60,000 to each American household. Some see Mr Trump’s formulation itself as mistaken. But that is a comforting delusion. There really is a trade-off, and for America today the cost of a shutdown is far outweighed by the lives saved.

However, America is fortunate to be rich. If India’s lockdown fails to stop the spread of the disease its choice will, tragically, point the other way.

Wherever you look, Covid-19 throws up a miasma of such trade-offs. When Florida and New York take different approaches, that favours innovation and programmes matched to local preferences. But it also risks the mistakes of one state spilling over into others .

When China shuts its borders to foreigners almost completely, it stops imported infections but it also hobbles foreign businesses. A huge effort to make and distribute Covid-19 vaccines will save lives, but it may affect programmes that protect children against measles and polio.

How should you think about these trade-offs? The first principle is to be systematic. The $60,000 benefit to American households, as in all cost-of-life calculations, is not real cash but an accounting measure that helps compare very different things such as lives, jobs and contending moral and social values in a complex society.
The bigger the crisis, the more important such measurements are. When one child is stuck down a well the desire to help without limits will prevail—and so it should. But in a war or a pandemic leaders cannot escape the fact that every course of action will impose vast social and economic costs. To be responsible, you have to stack each against the other.

Hard-headed is not hard-hearted

A second principle is to help those on the losing side of sensible trade-offs. Workers sacked in forced shutdowns deserve extra help; children who no longer get meals at schools need to be given food.

Likewise, society must help the young after the pandemic has abated. Although the disease threatens them less severely, most of the burden will fall on them, both today and in the future, as countries pay off their extra borrowing.

A third principle is that countries must adapt. The balance of costs and benefits will change as the pandemic unfolds. Lockdowns buy time, an invaluable commodity. When they are lifted, covid-19 will spread again among people who are still susceptible.

But societies can prepare in a way that they never did for the first wave, by equipping health systems with more beds, ventilators and staff. They can study new ways to treat the disease and recruit an army of testing and tracing teams to snuff out new clusters. All that lowers the cost of opening up the economy.

Perhaps, though, no new treatments will be found and test-and-trace will fail. By the summer, economies will have suffered double-digit drops in quarterly GDP. People will have endured months indoors, hurting both social cohesion and their mental health. Year-long lockdowns would cost America and the euro zone a third or so of GDP. Markets would tumble and investments be delayed.

The capacity of the economy would wither as innovation stalled and skills decayed. Eventually, even if many people are dying, the cost of distancing could outweigh the benefits. That is a side to the trade-offs that nobody is yet ready to admit.

Reflections on the stock market downturn

My portfolio is down about 35 per cent, but I’m sticking with my small-cap heroes

John Lee

Lord Lee’s salmon fishing friend Nigel Fenton has been a beneficiary of his advice on buying into property company Daejan © Alamy Photo

These are turbulent times for investors and reflecting on what has happened to stock markets in the past few weeks is a painful business.

So, where do I start? I’m struck by how different things look since the column I penned for the Financial Times in January.

Back then, I was optimistic about the year ahead following the emphatic general election result.

I had received some very welcome takeover proceeds, “topped-up” a number of my holdings and felt very pleased with myself for buying Aviva and Legal & General on 7.5 per cent yields.

Yes, I did mention coronavirus as a concern, but nobody imagined its speed and scale of spread, and the misery and death it would bring, would drive the world into lockdown.

It is a sickening feeling to see the valuation of one’s portfolio slashed and expected dividends passed or deferred.

All of my holdings are down from peak this year, on average by approaching 35 per cent, apart from Concurrent Technologies which is marginally up.

The worst performers have been the three companies which passed dividends; Air Partner, Vianet and Vitec have all halved. I have stayed aboard all three, although I did sell some of the latter on a negative trading statement this year. In retrospect, perhaps I should have been more ruthless.

Overall, I should have acted more quickly, but my approach has always been to take the long view. In any case, some of my larger small-cap holdings are fairly illiquid. I would have benefited from applying a 20 per cent “stop loss” in some cases, but I believe these tools should only be applied to specific stocks, and not when the overall market falls out of bed.

As a long-time investor, I have been here before. Coronavirus and your money
 For me, the nearest parallel is the secondary banking crisis in the early 1970s when London & County Bank crashed, there were rumours about the viability of NatWest and property companies including Northern Developments and Ronald Lyon Estates went under. 

Then the stock market plunged — from memory, blue-chips such as ICI and Thomas Tilling were yielding 20 per cent, but no one would buy equities.

This event, now approaching 50 years ago, taught me that unprecedented falls on this scale could happen — hence my conservative approach to investing ever since. 

Finally, a number of institutions got together, started to buy and eventually turned sentiment with a significant recovery then ensuing. 

Today, the one thing that everyone agrees on is that the disruption from Covid-19 will come to an end at some stage — although nobody knows when — and sadly we are going to be reading a great deal of depressing news stories for some time.

For the businesses strong enough to survive, the eventual reward should be an explosion of pent-up economic activity and travel, and (I hope) a commensurate surge in share prices. So I am not panicking — I will stay aboard and take a long-term view about the businesses I’m invested in.

As I am looking five or more years ahead, I’m happy to be judged then.

I am always reminded of the words of investor and financier Sir John Templeton: “To buy when others are desperately selling, and to sell when others are greedily buying, requires the greatest fortitude and pays the greatest reward.” 

Thus, when we experienced the financial crisis of 2008, with shares falling heavily, I bought into excellent businesses on double-figure yields such as BBA Aviation and Fenner, the industrials group, being richly rewarded when markets recovered. Of course, there is absolutely no guarantee that history will repeat itself, but one has to take the optimistic view that we will get through this crisis.

Back to today. With the benefit of hindsight, I obviously reinvested my takeover proceeds too soon, but thankfully in solid, well-stewarded businesses, all of which survive. However, I am resigned to a significant loss of dividend income this year.

My dividend heroes will be hopefully those companies with strong cash reserves — in my portfolio, these include Anpario, Cerillion, Concurrent Technologies and FW Thorpe. Also, I have every confidence that Treatt, my largest Isa holding, will maintain dividend payments.

With so many depressed share prices, it will be interesting to see whether any predators swoop on the vulnerable, although most investment bankers are likely to be focused on rights issues for some while
Question marks remain over holdings such as Aviva and PZ Cussons, but hopefully they will be very reluctant to destroy their long, positive dividend histories.

We have seen some extraordinary price volatility in recent days. Air Partner was driven down by heavy selling and obvious concerns about the aviation industry to a low of 17p. It has since rallied by well over 100 per cent to more than 40p, as investors took a more positive view of the company’s survival — one I very much share as a long-term holder. 

In February, I had slightly trimmed my Treatt holding selling at 533p and 540p. However, when I received my Treatt dividend I used part of it to buy back half of what I had sold at an unbelievable 319p — selling them again just a day later at 389p. 

I was even more fortunate with Shell, judging them to be ridiculously oversold at £10.10 on a yield of 14 per cent. I sold 10 days later at £14. As regular readers of my column know, I am not normally a “trader”, but home-isolating generates plenty of free time.

With so many depressed share prices, it will be interesting to see whether any predators swoop on the vulnerable, although most investment bankers are likely to be focused on rights issues for some while. In time, this will become an issue for private investors who will be tapped for further equity or face dilution.

But I am thankful that I benefited from so many takeovers last year. Looking back, there is no way that we Tarsus shareholders would have been offered 425p today, with so many events being cancelled or deferred.

Over the years, I have drawn attention to the absurd discount to net asset value prevailing at family-controlled property company Daejan. In June, when its shares were £56 (approximately half its published NAV) I wrote, “I would think it makes sense to take Daejan private at the midway price, say £80, everyone would be happy and the controlling families would be spared further castigation over the board diversity issue.” 

Well, suffice to say, it duly happened at virtually precisely that figure! One fellow shareholder who benefited was Nigel Fenton, my good friend and a partner in the famous Hendersyde Beat of the Tweed, near Kelso in the Scottish borders, where I have been privileged to fish for these past 20 years. 

Nigel reinvested his proceeds from the Charles Taylor takeover in Daejan and industrial property owner Hansteen. When Hansteen was itself taken over, he bought more Daejan with those further proceeds. The following day, the Daejan “take private” was announced.

Hopefully, his salmon fishing clients like me will have the same good fortune on the river.

Which leads me to fervently hope and pray for signs that we are winning the fight against this ghastly virus and look forward to the time when our lives and the economy can emerge from isolation.

Selfishly, I am hoping to be able to cast a fly during my August Tweed week, and look forward to talking shares again on the river with Nigel.

Lord Lee of Trafford is an active private investor and author of the children’s book “Yummi Yoghurt — A First Taste of Stock Market Investment”. He is a shareholder in all the companies indicated.

Everyone Is Worried About the Internet. So Far, It’s Actually Doing Just Fine.

By Eric J. Savitz

Comcast says video conferencing and voice over IP traffic is up 212% in recent weeks. / Getty Images 

The Internet is doing just fine.

With everyone stuck working and studying from home, Americans have become sensitive to any news about internet slowdowns.

We’re all using more bandwidth for video conferences and streaming, the only things maintaining any sense of normalcy in our lives. So, internet anxiety is understandable.

Last month, European Union Commissioner Thierry Breton triggered a round of hand-wringing when he tweeted that we should all stream video in lower-quality standard definition, rather than high-def, in order to “secure Internet access for all.”

In response, Apple (ticker: AAPL),, Netflix(NFLX), and Google’s YouTube all announced plans to reduce their video streaming quality in Europe. And, in fact, there is some evidence that European broadband speeds have slowed, with large numbers of people working from home.

The good news is that U.S. networks are handling the traffic spikes without any major hiccups.

In a call this past week with reporters, Comcast(CMCSA), the largest U.S. internet service provider, said that its network is working well, with tests done 700,000 times a day through customer modems showing average speeds running 110% to 115% of contracted rates.

Overall peak traffic is up 32% on the network, with some areas up 60%, in particular around Seattle and the San Francisco Bay area, where lockdowns were put in place before they were in most of the rest of the country. In both Seattle and San Francisco, peak traffic volumes are plateauing, suggesting a new normal.

Almost every online activity has spiked. Comcast says video conferencing and voice over IP traffic is up 212%. Gaming downloads have jumped by 50% to 80%, with some fluctuations based on new game releases. Streaming video is up 38%, Comcast said, while linear video consumption is up by four hours a week on average per household, to 64 hours. Video on demand is up 25%, year over year.

Tony Werner, head of technology and product at Comcast Cable, says it has a long-term strategy of adding network capacity 12 to 18 months ahead of expected peaks. He says that approach has given Comcast headroom to smoothly absorb the added traffic. The company hasn’t requested that video providers or anyone else limit their traffic.

AT&T(T), the No. 2 U.S. internet service provider, likewise asserts that its network is performing “very well” during the pandemic. This past Wednesday, it said, core traffic, including business, home broadband, and wireless, was up 18% from the same day last month. Wireless voice minutes were up 41%, versus the average Wednesday; consumer home voice minutes rose 57%, and WiFi calling was up 105%.

Over the past three weeks, the company has seen new usage patterns on its mobile network, with voice calls up 33% and instant messaging up 63%, while web browsing is down 5% and email is off 18%.

Verizon Communications (VZ) also says its network is handling the traffic well. One telling stat: The carrier says that mobile handoffs, the shifting of sessions from one cell site to another as users move around, is down 53% in the New York metro area, and 29% nationally; no one is going anywhere.

One takeaway from this strange period is that we’re seeing clear validation in moving corporate computing to the cloud.

The Barron’s staff works remotely thanks to a wide range of apps, from Slack Technologies(WORK), Okta (OKTA), and Alphabet’ s (GOOGL) Google. But enterprise-cloud software companies won’t be immune to a downturn, and we’ll get vivid reminders of their vulnerabilities as first-quarter earnings start arriving in the next few weeks.

Canaccord Genuity software analyst Richard Davis thinks first-quarter results will be fine—most cloud-based software companies have recurring business models, and the economic plunge didn’t begin until March. But he also thinks cloud companies will be withdrawing their full-year guidance—if they haven’t already—and that there could be a plunge in billings, as new business activity grinds to a halt.

“Investors expect the content of the next few earnings calls to be some form of ‘things were good until March,’” he wrote this past week. “A few minutes later, most companies will announce they have withdrawn guidance.”

Davis expects investors to focus on a likely billings collapse, which will bring down future revenue growth for a group of stocks already trading at lofty revenue multiples. He says some companies could miss June-quarter bookings estimates by 90%.

Davis adds that once we get past an ugly June quarter, the second half of the year could see a wave of consolidation. Large companies such as Amazon, Microsoft (MSFT), Alphabet, Oracle (ORCL), Adobe (ADBE), and may start shopping for bargains.

Potential targets could include Service Now (NOW), Atlassian(TEAM), Slack, Dropbox (DBX), Avalara (AVLR), Twilio (TWLO), Okta, Elastic (ESTC), HubSpot (HUBS), Zendesk(ZEN), Smartsheet (SMAR), and Sprout Social (SPT).

“Strategic buyers could step up as soon as late summer once we determine the depth of this economic hole,” David wrote in a research note this past week. “These firms will buy the quality companies at a discount.”

Coronavirus and Sex: Questions and Answers

Some of us are mating in actual captivity. Some of us not at all. The pandemic raises lots of issues around safe intimate physical contact, and what it may look like in the future.

By Jen Gunter
Credit...Illustration by Claire Milbrath

These are not sexy times.

As an obstetrician and gynecologist in the Bay Area, I’ve been caring for my patients via telemedicine for the past three weeks because of the new coronavirus pandemic. When I ask patients about new sex partners — a standard question for me — the answer is a universal “no.” They are taking California’s shelter-in-place very seriously.

In fact, many of my patients are more interested in updates about the virus than the medical (and often sexual) problem for which they were referred.

The pandemic has most of the world practicing exceptional hand hygiene and social distancing. This coronavirus is so new that we don’t know what we don’t know, and while fresh information is coming at an incredible pace, one medical recommendation has remained constant: the need for social distancing.

This time has been an exercise in prioritizing needs from wants. So where does sex fall on that spectrum?

Are we even wanting sex these days?

It’s hard to know yet. While some people may turn to sex for comfort or as a temporary distraction, these are unprecedented times and we don’t have much data.

Depression and anxiety have a negative effect on libido. Some people are out of work, too, and unemployment can affect sexual desire. The kind of worry people are experiencing crosses so many domains: job security, health, friends’ and family’s health, retirement and the ability to have access to medical care, to name a few.

One study that looked at the effect of the 2008 Wenchuan earthquake in China on the reproductive health of married women found sexual activity decreased significantly, and not just in the week after the earthquake.

Before the earthquake, 67 percent of married women reported they were having sex two or more times a week. One week after the earthquake, that number fell to 4 percent. By four weeks, only 24 percent reported they were having sex two or more times a week, well below the baseline.

While this study is retrospective data — women were asked to recall their sexual activity eight weeks after the earthquake — and an earthquake isn’t the same thing as a pandemic, it seems unlikely that sexual activity overall will increase.

However, trauma — and these are certainly traumatic times for some — can also lead to sexual risk taking, like unprotected sex or sex under the influence of drugs or alcohol.

Credit...Illustration by Claire Milbrath What is considered ‘safe sex’ right now?

What is considered ‘safe sex’ right now?

Your risk for infection with the new coronavirus starts as soon as someone gets within six feet of you. (And of course, if you do have sex, your risk for pregnancy and S.T.I.s remains the same, and the previous definition of “safe sex” still applies.)

You’ve read this elsewhere: Covid-19 is transmitted by droplet nuclei, tiny specks of infectious material far too small to see. They are sprayed from the nose and mouth by breathing, talking, coughing and sneezing.

A person contracts the virus sharing the same airspace — a six-foot radius, the distance droplet nuclei are believed to travel (although with coughing they may travel farther) — and inhaling the infectious particles. Or the droplet nuclei land on an object or surface, making it infectious. Touch that surface and then your face and the chain of transmission is complete.

If you do have sex with someone who is infected with the new coronavirus, there is nothing we can recommend, be it showering head to toe with soap before and immediately after sex, or using condoms, to reduce your risk of infection. (The New York City Department of Health and Mental Hygiene issued these guidelines.)

We don’t know if the new coronavirus is present in vaginal secretions or ejaculate, but it has been identified in stool. Based on what we currently know about transmission of coronavirus, penetrative vaginal or anal sex or oral sex seem unlikely to pose a significant risk of transmission.

Who are the safest partners?

It’s best to limit sex to your household sex partner (HSP), who should also be following recommendations for hand hygiene and social distancing. The World Health Organization currently lists the risk of household transmission as 3 to 10 percent, but this is based on preliminary data. We don’t know what role kissing or sexual activity plays in transmission.

The idea of limiting sexual contact to your household partner and social distancing in general is about ending the chain of transmission to your household should one person become infected.

If your HSP is sick with symptoms of Covid-19, or has been exposed, definitely don’t have sex. They may be too fatigued anyway, but your risk of being infected will likely go up in close, intimate contact. Sleep in separate bedrooms if possible.

If you have more than one bathroom, designate one for the sick or exposed person. Try to stay six feet apart and be fastidious about cleaning surfaces. If they were exposed, living as separate as possible in your home for 14 days is recommended.

Credit...Illustration by Claire Milbrath

What if I’m in a new relationship and had planned to get other S.T.I. testing done?

Many labs are overwhelmed with coronavirus testing, so you may not get results for some S.T.I.s — like gonorrhea, chlamydia and herpes — as fast as before. Given the short supply of test kits for Covid-19, many medical centers and labs are taking swabs and liquid from other test kits to jury-rig testing kits for the new coronavirus, so sampling kits for genital infections may be in short supply.

Ask your health provider because work flows may vary locally and may change day to day. But if you are at risk of an S.T.I., you should still seek out a test as soon as possible.

What if I don’t have an HSP? Am I now celibate?

Yes, I’m sorry to say, those are the recommendations. For now.

But this doesn’t mean you can’t meet people online — start talking on the phone, have video chats, sext or have phone sex if that’s your thing.

And if someone you meet online is encouraging you to meet in person? That not only tells you how they view their own safety, but, even more important, how they view yours.

What about a ‘Covid sex buddy’?

I’ve heard people talk about this: a sexual partner who agrees to socially distance with everyone else, but the two of you will hook up for mutual release.

I really discourage this (for now): Social distancing means limiting contact with people outside of your household. Each additional person added to the household increases risk.

And of course, you are depending on this person to be as vigilant with social distancing as you are — not to mention the risk during transportation between your home and your partner’s. At the moment, the risk is too high.

Might we see people in close proximity hooking up who both tested positive for Covid-19 and are now 14 days post-positive test? It would not surprise me. However, we don’t know much about immunity (protection from reinfection) against Covid-19 after an infection. And because tests are in short supply, many people have presumptive infections but can’t be tested.

With seasonal coronaviruses that cause a common cold, immunity lasts about a year, but with the more serious coronaviruses like SARS or MERS, immunity seems to last longer. But we still don’t know enough to make concrete recommendations in terms of post-illness behavior.

What about sex toys?

Sex toys aren’t likely to be a method of coronavirus transmission if you have been using them alone.

However, if you shared your toys within the past 72 hours, make sure they are appropriately cleaned and wash your hands afterward as the virus may stay active of some surfaces for up to three days.

And do not clean sex toys with hand sanitizer or use hand sanitizer immediately before masturbating, because it can be very irritating to the vagina or rectum. Ouch. 

Credit...Illustration by Claire Milbrath

Judging from the state of my inbox, it appears that a lot of vibrators are on sale. Is this a good time to take advantage of a deal and the extra time on your hands?

Paying electronically is safer than an in-store purchase: Paying online means no one is physically handling a credit card or cash.

As for the delivery itself, there is lab data suggesting the new coronavirus is viable up to 24 hours on cardboard. Washing your hands after opening and throwing away the delivery box seems like an appropriate mitigation strategy.

Letting that box sit for a day (if possible) before opening may be a good idea, although we don’t know how the lab data of the virus survival on surfaces translates to the real world.

Does your online purchase of a nonessential (as much as it pains me to say this, a vibrator is a “want,” not a “need”) put someone else at increased risk? Workers at large warehouses where social distancing isn’t possible may be at increased risk, especially if they don’t have sick pay, so taking time off if exposed isn’t possible.

One option is to consider a local small business that can take your payment over the phone or online and arrange a curbside pickup.

What will safe sex look like in the future?

Right now the only safe sex is no sex with partners outside your household.

If you or your HSP are at high risk, should you take extra precautions to further reduce the risk of transmission — giving up sex and kissing, sleeping in separate bedrooms — in case one of you has an asymptomatic infection? Asking your doctor for guidance here is probably wise.

But what about when we emerge from our homes again — which may be some months away — and start thinking about in-person dating, and even mating?

No one knows if we are all going to have the urge to have sex after this quasi-hibernation. One concern is a potential surge in risk-taking and S.T.I.s. in the immediate aftermath of the pandemic. (After all, you can’t assume that if someone was celibate during the pandemic they don’t have an S.T.I.; most S.T.I.s don’t cause symptoms and could have predated the new coronavirus.)

If that all sounds fairly bleak, well, it is. For now, the new coronavirus probably means less partner sex overall, whether that’s because of the lack of a household sex partner for some or a drop in desire for others. Or both.

Hopefully, though, this is just for now.

Because the more everyone commits to social distancing, the faster we can all get back — and down — to business.

Dr. Jen Gunter is an obstetrician and gynecologist in California. She is the author of the “The Vagina Bible” and writes The Cycle, a column on women’s health that appears regularly in Styles.