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One More Risk for China CDS

04 May 2020 by jbchevrel

Some widening in Asian sovereign CDS, despite that China and Japan are closed both today and tomorrow. China will open back on Wednesday. On 5y CDS, Thai +14 Indon +5.5 China & Malay +2.5. Phil and Korea just +0.5. The main risk-off driver in the region at the moment is the fact that the Trump administration has claimed it has evidence that the virus SARS-CoV-2 originated in a Wuhan lab, where some of the world's most dangerous pathogens are studied. China denies that the virus had been leaked from the lab, and the WHO also believes it wasn't man-made. China's state media has called out US Secretary of State Mike Pompeo for his claims about the origins of the new coronavirus. The Global Times, newspaper under the CCP influence, published an editorial Sunday that rebuked Pompeo for floating “groundless accusations.” The newspaper suggested that Pompeo “does not have any evidence, and during Sunday’s interview, he was bluffing.” “As the campaign is underway, the Trump administration has implemented a strategy designed to divert attention from the incompetence it has displayed in fighting the pandemic,” reads the editorial. “It is clear that their goal is to blame China for the pandemic by pinpointing the country as the source of COVID-19.” Pompeo, who has presided over Washington's hard-line China strategy of recent years, claimed on Sunday there was “enormous evidence” that a high-security lab in the Chinese city of Wuhan was the source of the coronavirus pandemic. Donald Trump made a similar claim just days ago and threatened to impose new tariffs on China. Pompeo was then reminded that US intelligence had stated exactly the opposite, to which he replied: “That’s right. I agree with that.” China has pushed back on US accusations and denied any mishandling of the virus, blaming the Trump administration for trying to shift the focus from its own missteps in the fight against the pandemic. China ForMin spokesman said “They (the US) have only one objective: to try to shirk responsibility for their own epidemic and prevention and control measures and divert public attention.”