China Press Review – April 16, 2020

Press review

Coronavirus: China’s economy set for first contraction since 1976 as Covid-19 rips up Beijing’s grand plan
China will release its first quarter gross domestic product (GDP) data on Friday morning, with the median estimate from a Bloomberg survey for a fall of 6 per cent    Predictions in the survey range from a deep contraction of 16 per cent to a modest expansion of 3.6 per cent following a growth rate of 6.1 per cent in 2019

Coronavirus: China job listings tumble by 27 per cent in first quarter as economic toll of pandemic mounts
The coronavirus outbreak has led to a steep decline in demand in China’s job market, with employment ads tumbling by 27 per cent in the first quarter    New study shows that export-oriented firms and companies with foreign investment particularly aggressive in cutting new hires

Weak exports will not stall China’s manufacturing recovery
China’s manufacturing sector appears to be well on the road to recovery. Some argue that the inevitable global recession resulting from the COVID-19 pandemic will weaken China’s manufactured exports, suggesting that this recovery cannot be maintained. But such analyses overstate the importance of exports in China’s growth. V  The best evidence, at least until first quarter Chinese GDP data are released on April 17, is the gradual but substantial recovery in electrical power usage. As shown in figure 1, in contrast to the average pattern in most recent years, electric power generation this year remained depressed well after the usual week-long shutdown for the Chinese New Year holiday. But from the latter part of March until April 10, average daily power production lagged the historic pattern by only about 15 percent compared with 40 percent a month earlier. Since manufacturing firms consume roughly 50 percent of electric power (versus only 15 percent by households), this is strong evidence of the recovery of manufacturing in China

Coronavirus impact: Wheels turn to wean away factories from China
Countries such as Japan are looking to diversify their supply chains to newer destinations

China Manufacturing is Riskier Than Ever: What to do to Reduce YOUR China Manufacturing Risks
China manufacturing has gotten riskier and more difficult. Our China manufacturing lawyers hear this pretty much every single day from our own clients.

China stocks fall as economic worries weigh ahead of GDP data
China stocks fell on Thursday ahead of the release of first-quarter GDP data, which analysts widely expect will show the economy suffering its first quarterly contraction in nearly 30 years as the new coronavirus outbreak paralyses activity.

China’s Trillion-Dollar Missed Virus Opportunity
The Covid-19 shock offers a chance to clean up decades of bad debt. Beijing needs to seize it.  That everyone, including the government, is turning is out to be a loser raises the question of whether Beijing has many options left, or even room for forbearance. Recent moves signal it doesn’t. Authorities are reforming and expanding the “bad banks,” or national-level asset management companies, that were established after the Asian financial crisis to help clean up lenders’ balance sheets. Special sovereign bonds have also been issued that could be used to recapitalize banks, or to create liquidity with the AMCs to buy up bad assets at market value. That, though, risks creating a capital hole for banks, and the managers don’t have gobs of capital to put to use without hitting leverage limits.

Coronavirus: China, Asia manufacturing recovery to be short-lived with 2020 growth set to grind to a halt
Asia-Pacific growth is set to be zero, worst than the global or the Asian financial crisis’, says International Monetary Fund Asia and Pacific Department chief   Changyong Rhee says any recovery in the manufacturing sector in China and the rest of Asia needs to be viewed with caution    I think except a few companies which sell medical products, medicines and some IT-related products, they might get some boost, but otherwise there is no winner in this crisis

Crisis? What Crisis? The IMF Says Asian Growth Will be Zero in 2020. Is This Correct and What are the Implications?
Big news today has been a much-quoted statement by the International Monetary Fund (IMF) concerning the likely performance of Asia during 2020 in light of the COVID-19 pandemic. The remarks were made by Chang Yong Rhee, a Director at the IMF’s Asia and Pacific Department, with the take-home point being made as: “Growth in Asia is expected to stall at zero percent in 2020. This is the worst growth performance in almost 60 years.” These are comments that have been picked up and disseminated across the global mainstream media.   To summarize, it is apparent that during these strange times, even the IMF can get things a bit wrong – and with a global media all too happy to cherry pick sound bites over what was actually said, do so under dubious authority and out of context. In short, China and Asia, will be fine in 2020, with growth about 2.2 percent across the board this year, which is understandable given the circumstances. Next year, bar any other black swan events, growth should be back to about 6-7 percent. That sounds like a great opportunity to look at China and other Asian growth investments this year, to capitalize on what can be expected to happen next.

China, Europe show restarting coronavirus-hit economies not easy
The early experiences in China and parts of Europe show it will be no easy task.

Coronavirus re-emergence will be a threat until 2024, Harvard study finds
Social distancing may need to continue or be used intermittently for next two years even if the virus were seemingly eliminated, researchers say     Donald Trump suggested on Tuesday that distancing in the US could be eased this month, while China has loosened its measures

Years before China’s belt and road plan got its name, Huawei was driven to seek emerging-market contracts
In the fourth instalment in an eight-part series on Huawei, our Africa Correspondent Jevans Nyabiage, US Deputy Bureau Chief Jodi Xu Klein and Asia Reporter Meaghan Tobin look at how Huawei had been expanding in emerging markets outside China long before the belt and road strategy even got its name   As early as 1996, company executives had travelled as far afield as Brazil, Russia and Africa in search of business opportunities

Coronavirus: China’s excavator sales soar as Beijing opts for old-school economic stimulus
Sales of the engineering vehicle widely used in construction by Chinese manufacturers surged 11.6 per cent in March, while domestic sales rose 11.2 per cent    Increase could show stimulus efforts of showering money on local authorities and flooding the banking system with cheap credit could be stronger than believed

Will the increased use of robots in everyday life continue even after Covid-19 is under control?
This is the seventh in a series on the impact of the coronavirus on China’s technology sector    China’s robotics market is forecast to reach US$103.6 billion by 2023, driven by manufacturing, consumer, retail, health care and resource applications

For China’s coronavirus diplomacy to succeed, Beijing must dial up generosity and downplay ideology
While the pandemic has presented China with an opportunity to fill the leadership void left by the US, it has to contend with scepticism from liberal democracies   The Chinese government must let medical experts take centre stage and resist the urge to push a narrative which extols the virtues of the individual leader and praises draconian measures

The Effects of COVID-19 on Sanctions and Export Controls
The global outbreak of the novel COVID-19 virus and resulting pandemic have disrupted nearly all fields of commerce throughout the world. While the situation continues to develop and has had broader implications, the effect both on U.S. and EU sanctions and export control policies is notable. We summarize below some of the changes to U.S. sanctions and export controls that have occurred in recent weeks in response to the pandemic. We also present the European response to this crisis with respect to export control regulations. Because the situation is dynamic, compliance professionals should continue to monitor further developments closely.

Coronavirus: China’s traders at famed Yiwu market turn to e-commerce, WeChat, TikTok in bid to survive
Long-time customers are negotiating deals with traders at Yiwu International Trade Market via WeChat, but new customers are hard to find online     Traders have turned to live streaming via TikTok with the help of social media influencers as foreign buyers are absent from the world’s largest small commodities market

Niche Influencer Categories on the Rise in China
There’s no doubt that people both in China and all around the world have been spending far more time at home than usual recently. Inevitably, that means people are spending more time with their phones. During this year’s Spring Festival celebrations in China, screentime was up by 26 percent compared with the figure for 2019, according to mobile big data platform Aurora Mobile Limited, we can also see from the DAU increase of top 10 apps in China. at the same time, there are some niche influencer categories that are on the rise.

Chinese e-commerce giant teams up with US firm Blue Yonder on AI supply chain transformation
Blue Yonder is an Arizona-based digital solution provider that uses artificial intelligence and machine learning to develop supply chain solutions     The partnership with JD Logistics will help Chinese merchants improve their efficiency and reduce resource wastage, the companies say

Digital banking is key to keeping SMEs’ business growing: DBS
Through DBS’ “Fast Track Online Business Account Opening”, local SMEs can now get their business account up and running as quickly as two working days.

Tmall fuels innovation for beauty brands in wake of Covid-19
Alibaba Group’s B2C e-commerce platform Tmall outlined plans this week to help beauty and personal-care brands pick up the pace of growth and digital transformation as they cope with the effects of Covid-19 on their business.Following the launch of Alibaba’s Spring Thunder Initiative, which seeks to help small to mid-sized enterprises weather the disruptions caused by the coronavirus pandemic, Tmall said it would ramp up support for SMEs on the platform, starting with the goal of helping 1,000 emerging beauty brands achieve over RMB10 million ($1.41 million) each in annual sales in the coming year.

Europe’s Largest Port Says Virus Impact to Get More Severe
The coronavirus is set to further damage trade in the coming months, threatening supply chains and causing oil inventories to swell, according to the head of Europe’s largest port, Rotterdam. “We are facing unprecedented disruptions and the port of Rotterdam

How COVID-19 Could Shape the Future of 5G
The pandemic was an early test of the technology’s capabilities, but it also hinted at what’s to come.

Could BCG and other existing vaccines help fight Covid-19? Researchers are trying to find out
Correlation between mass vaccination programmes and coronavirus statistics is promising but needs further investigation    Vaccines against tuberculosis, polio and rubella are all being studied as potential weapons in pandemic

Second Covid-19 Wave Could Hit in November, Expert Says
China could see another surge in coronavirus infections starting in November, one of the country’s highest-profile medical experts has said, as low numbers of new cases prompt governments nationwide to get people back to work.

Coronavirus: could China’s lockdowns to contain Covid-19 be the best choice for every country?
The swift and aggressive lockdown strategy of cities including Wuhan may have worked for China but studies suggest the strategy might not be the best choice for other nations    Studies show school closures could lead to higher death rates if medical workers have to stay at home to care for their children

Coronavirus lockdown: Lessons from Hokkaido’s second wave of infections
It was once seen as something of a success story – a region that worked to contain, trace and isolate the virus – leading to a huge drop in numbers. But Hokkaido is in the spotlight again as it struggles to deal with a second wave of infections.

Power politics threatens global cooperation to combat COVID-19
The lack of a coordinated global response to the COVID-19 pandemic is partly because many of the most capable states have been hit hardest and so focussed internally. But the entrenchment of great power competition as a major feature of global politics is also playing a profound role. Smaller states must now step up to stabilise the global order.

Moderate voices call for calm as US-China coronavirus war of words rages
Anti-US sentiment fuelled by nationalism and misinformation has blown out of all proportion, Chinese intellectuals warn    Recent articles on China’s social media call for restraint, fact-based discussion and a respect for science

No evidence pandemic coronavirus came from Wuhan lab, China says
Beijing says origin of pathogen a serious matter for science, after US president signals investigation into whether virus came from facility in Chinese city  Allegations part of continued exchange of accusations between the two countries

It’s Not Just the WHO: How China Is Moving on the Whole U.N.
Despite his saber-rattling, Trump’s pullback actually helps Beijing in its new, inside-baseball strategy to build influence.

Coronavirus: Australia’s economy faces unprecedented setbacks
Within days the centre-right government had unveiled Australia’s biggest ever economic package – A$130bn ($80bn) is to be spent on keeping six million people, or around half the workforce, in jobs.

Hong Kong SMEs expect little relief from government’s HK$1 trillion Covid-19 funding support
Starting Monday, the Hong Kong government will guarantee 100 per cent of loans of up to HK$4 million made to SMEs    Personal guarantees by company directors, eligibility could limit impact

Hong Kong Unveils Anti-Epidemic Fund 2.0: Support for Businesses, Job Retention
On April 8, the Chief Executive of Hong Kong SAR (Special Administrative Region), Carrie Lam, unveiled a HK$137.5 billion (US$18 billion) lifeline for businesses and individuals to help ailing businesses stay afloat, and retain workers as the city continues to reel from the catastrophic economic effects of the coronavirus (COVID-19) pandemic, and prolonged periods of social unrest.

PM reviews impact of COVID-19 on economy; 2nd stimulus in consideration
Prime Minister Narendra Modi on Thursday reviewed the impact of COVID-19 on the Indian economy and a possible second stimulus to boost sectors hit hard by the pandemic.Modi held discussions with Finance Minister Nirmala Sitharaman as the pandemic hit sectors from small industries to the aviation sector hard with millions of jobs at stake. The meeting comes amid drastic reduction in GDP growth forecast by various multi-lateral funding agencies for the current fiscal due to the impact of COVID-19 and consequent lockdown.

COVID-19 stimulus response to boost Japan’s GDP by up to 3.8%, Abe says
Prime Minister Shinzo Abe said Wednesday the government’s latest emergency package to cushion the fallout from the coronavirus outbreak will boost the economy by up to an annualized 3.8 percent in real terms.  Abe made the remark about the country’s ¥108.2 trillion ($1.01 trillion) stimulus package, it’s largest ever, at a meeting of the government’s Council on Economic and Fiscal Policy, at a time when many economists predict a double-digit economic drop in the April-June period. As a key pillar of the economic package approved by the Cabinet last week, the government allocated about ¥4 trillion to provide ¥300,000 to each household whose income has dropped sharply due to the spread of the coronavirus. Under the stimulus, with ¥39.5 trillion in direct fiscal spending, the government will provide up to ¥2 million each to small business owners, including freelance workers, if their revenue drops significantly.

Coronavirus: Japan declares nationwide state of emergency
As cases have risen in Japan, criticism of the government’s response has grown louder
A nationwide state of emergency has been declared in Japan due to the country’s worsening coronavirus outbreak.

New Zealand jobless rate could hit 13% even if lockdown ends next week, modelling suggests
Treasury modelling shows unemployment could ease to 8.5% with a larger fiscal stimulus New modelling from the Treasury has painted a dire picture of New Zealand’s economic prospects for the next year, with a surge in unemployment to as much as 13% even if Covid-19 infections are contained and lockdown rules eased after the initial four weeks. A jobless rate of up to 26% – and a fall in GDP of 23% – is predicted if the country is forced to remain in its strictest level of shutdown for a total of six months before moving to marginally lighter measures. However, with a larger fiscal stimulus package than the NZ$20bn (£9.7bn) already pledged by the government, the 13% jobless rate modelled could hit a much lower peak of 8.5% before falling to 5.5% in the year to June 2021. On Tuesday, Robertson pledged to release further support.

Houseparty vies with Zoom to be homebound chatters’ app of choice
Houseparty’s free app, available on mobile and desktop, lets people video chat as well as remotely play games      It was the second most downloaded app of any category over the Easter weekend in the US, behind only Zoom

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