Masked police officers and a health professional stand at a screening checkpoint on a highway toll ... [+] station on the outskirts of Shanghai, China, on Tuesday, Jan. 28, 2020. Photographer: Qilai Shen/Bloomberg

Chinas government is now ramping up efforts to punish locals for spreading rumors and harshly criticizing the government about the fast spreading coronavirus.

As death tolls rise and new cases level-off due to a new way of counting infected persons, Chinese leadership is now working overtime on two fronts: fighting the Wuhan virus outbreak on one; convincing people to that the economy is nearing all- system-go.

Beijing decided this week to clamp down on virus rumors being spread via social media and messaging apps like WeChat, the South China Morning Post reported this evening in Hong Kong.

According to the daily, a set of guidelines was issued on Monday by Chinas judicial and law enforcement agencies where they named 10 categories of new criminal charges to brought against people deemed jeopardizing disease control, undermining social stability by spreading fear about the disease, and criticizing the Communist Partys handling of the novel coronavirus, officially named Covid-19 by the World Health Organization on Tuesday.

Parents and relatives of Pakistani students studying in Wuhan protest to demand their government ... [+] evacuate family members from China. Scenes like this has the WHO worried people will become anti-China. (Photo by AAMIR QURESHI/AFP via Getty Images)

Senior officials from the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security and the Ministry of Justice said the measures were needed to cope with the crisis.

Some 1,117 people have died, mostly all of them in the Hubei province, the epicenter of the outbreak. China has confirmed over 45,000 cases.

China: Investors Ignoring The Noise

For the past two weeks, investors were waiting for the virus to surpass the SARS death toll of 775. Once breached, people wanted to see the number of new cases falling before declaring a bottom. That breach occurred over the weekend, but the number of new cases keeps rising, with no end in sight. The base case scenario sees a decline in new cases at some point between February 14 and the end of March.

This week, authorities in China said they would only list a new case if the person was proven to be infected with the virus rather than having checked in for displaying symptoms.

Markets in China have been boosted by the central bank over the last five days, and by news that companies were back to business in provinces other than Hubei.

President Xi Jinping has since been seen donning a surgical mask in Beijing, warning that the virus was very serious and advising everyone to remain vigilant. There are quarantine orders and travel restrictions still in place nationwide.

Xisaid today that progress was being made in bringingthe outbreakunder control and that the focus now should be on returning to work.

Getting the economic engines firing again is imperative. Although information out of China is not easy to come by, there is a sense that people there have been afraid about sharing their concerns on social media. Now that risk is real, with criminal implications for doing so if too critical of the government.

WeChat users will have to get more creative. Or just stop talking about it altogether. Those who cheer the success of the government are likely to be viewed skeptically now that Beijing has essentially put a gag order on covid-19.

For the market, those who believe Chinas coronavirus numbers are the same as those who trust Chinas GDP numbers. Those who dont trust Chinas GDP numbers, dont trust the coronavirus numbers either.

China investors are obviously in the trust camp and have been there all week. Once again, China is beating the S&P 500.

Over the last five days, the Xtrackers China A-Shares ETF (green) has outperformed the MSCI China ... [+] and the S&P 500 (blue) despite an ever-increasing death toll caused by Covid-19.

Storm Not Over

Hong Kong surpassed Singapore on Wednesday as the No. 2 hot spot for the virus off mainland China. Borders with the mainland have been sealed. Singapore also banned flights from China.

Covid-19 is a still being called a virus of unknown origin. The general consensus is that it came from bats and infected humans either through a bat bite, or via human consumption. Another idea is that the virus escaped a research lab in Wuhan. China has been silent on its origins, and is now silencing any chit-chat about it on mainland social media.

If the outbreak is not contained, Beijings clamp-down on allowing people to discuss it beyond the parameters of the official view could further test the patience of the Chinese. Such a situation would risk putting Chinas otherwise stable social structure into unchartered territory.

Combatting this virus means everything to Beijing, and this could be another reason why the market is willing to stay invested despite daily forecasts for lower growth in China.

Virologists are still trying to find a way to combat the disease. To do so, they need to know more about its origin.

On Wednesday, New Scientist magazine reported that the virus came from bats.

From the virology evidence available to date, the virus is almost certainly from a species of bat, says Andrew Cunningham of the Zoological Society of London.

On Wednesday, Chinas Ministry of Finance announced it would allow local governments to sell $122 of new debt issuance to raise money from the market, instead of the government. China bond prices have been in decline all week, suggesting either a risk-on move with bonds selling in favor of equities, or fears that the outbreak is going to hurt numerous companies more than the government is letting on.

Says Brendan Ahern, CIO of KraneShares, a China ETF fund in New York, We are not out of the coronavirus storm yet.

More here:

China Ramps Up Censorship On Coronavirus As Critics Risk Criminal Charges - Forbes