China Press Review – April 22, 2020

Press review

COVID-19: How business leaders should plan ahead for the next stage
In this episode of Inside the Strategy Room, we share an excerpt from a webcast on how companies can change their operations to navigate the vast business challenges heading their way. It was recorded at the 2020 Global Business Leaders Forum, scheduled to take place in New York in early April but instead held virtually. In this session, Martin Hirt, a senior partner and a global co-leader of McKinsey’s Strategy and Corporate Finance practice, offers his insights based the recent articles he co-authored, “Safeguarding our lives and our livelihoods” and “Getting ahead of the next stage of the coronavirus crisis.”

Safeguarding Europe’s livelihoods: Mitigating the employment impact of COVID-19
Our analysis, based on occupation-level data, estimates that the COVID-19 crisis could leave up to 59 million jobs at risk1 in Europe—a staggering 26 percent of total employment in the 27 member countries of the European Union (EU-27), plus the United Kingdom (EU-28). Naturally, the level of risk will vary greatly among occupations and industries, depending on whether they are system relevant or not, how closely they are performed in physical proximity to others, how much of the work can be done remotely through technology, and potential changes in demand as the crisis evolves.

China may be heading for a real recession unless it comes up with a forceful policy response
China’s industrial activity is recovering from the Covid-19 shutdown, but consumer spending is not. If a lack of demand is indeed slowing China’s economic recovery, Beijing must act fast to avoid a technical recession

China’s economic prospects call for stimulus
China’s annual GDP growth has been gradually falling since 2010 from over 10 per cent to nearly 6 per cent by 2019. Last November I argued it was time for China to stem its economic slowdown with expansionary monetary and fiscal policies. But China’s economic growth has since faced the COVID-19 challenge and now stimulus is more important than ever.

China’s economy expected to recover in Q2
China’s economy is expected to recover in the second quarter after shrinking in the first quarter amid the COVID-19 pandemic, experts said Tuesday. “China rapidly responded to the COVID-19 outbreak with fiscal and monetary stimulus packages, leading to a rapid rebound in the financial market,” Piao Renjin, an analyst at NH Investment & Securities in Seoul, told Xinhua.

As the coronavirus batters economies around the world, the odds of China meeting its US trade deal obligations are slim
Even if Beijing is able to get its industries back on track quickly, other countries may no longer be in a position to buy goods as they did before the pandemic
China may meet its targets for agricultural purchases, but doing so in other areas will be challenging

Trump administration urged to pressure China on promise to buy US$52 billion worth of US energy products
Producers warn administration that China is falling behind in its commitment while increasing purchases of Russian and Saudi crude   Crude oil prices had an unprecedented fall into the negative territory because of depressed demand from the pandemic

China to increase social welfare, help small and micro enterprises
China will enhance support to those living in poverty, living on minimum subsistence allowances or unemployed, and ramp up financial services for micro and small firms, according to a statement released after a State Council executive meeting chaired by Premier Li Keqiang.

Coronavirus impact: China’s first-quarter bad loans climb as businesses suffer amid nation’s worst economic slump in decades
The non-performing loan ratio rose to 2.04 per cent at the end of March, up 0.06 percentage point from December    China’s biggest banks will release first-quarter earnings on Tuesday next week

China’s bad loan risks under control: regulator
China’s non-performing loans in the banking industry are expected to slightly increase in the second quarter, but the risks are controllable, the country’s banking regulator said Wednesday. China’s bad loans inched up amid the outbreak and may continue to rise in the second quarter, said Xiao Yuanqi, chief risk officer of the China Banking and Insurance Regulatory Commission, adding that the country has taken measures to mitigate these risks.  The non-performing loan ratio of China’s banks stood at 2.04 percent in the first quarter, up 0.06 percentage points from the beginning of this year. The rise was faster in some small and micro businesses as well as the catering and accommodation industries, which have been hit hard by the coronavirus outbreak

Pinduoduo doubles down on rural China, with five-year, US$7.1 billion e-commerce campaign
The investment is projected to help grow the online penetration of agricultural goods to about US$113 billion within five years    It will also foster development of 1 million rural online shops on Pinduoduo

Coronavirus: Commission announces exceptional measures to support the agri-food sector
The Commission is taking swift action and proposes additional exceptional measures to further support agricultural and food markets most affected. The EU agri-food sector is showing resilience in these unprecedented times, following the outbreak of the coronavirus. Still, some markets have been hit hard by the consequences of this public health crisis. Today’s package includes measures for private storage aid (PSA) in the dairy and meat sectors, the authorisation of self-organisation market measures by operators in hard hit sectors and flexibility in fruits and vegetables, wine and some other market support programmes.

Flattening the curve won’t lead to coronavirus turning point, study finds
Projections by Chinese and US team indicate that South Korea and New Zealand among the best performers in the global crisis in balancing economics with disease controls  China effective in suppressing epidemic quickly but the strategy comes at too high a cost, researchers say

COVID-19 Virus Likely Came From Animals in China, WHO Says
The global health body appears to reject conspiracy theories that the novel coronavirus came from either a bioweapons lab in the U.S. or an infectious diseases lab in Wuhan, where the first infections were detected.

Coronavirus: Singapore’s migrant workers ‘living in fear’
A rising wave of infections among Singapore’s massive migrant worker population threatens to derail the city-state’s success in fighting the coronavirus.  About 80% of all cases in Singapore have been linked to the dormitories where low paid migrant workers from South Asia are housed.

Vietnam to ease nationwide coronavirus lockdown
Vietnam, which has reported under 300 cases of coronavirus and no deaths since the first infections were detected in January, said on Wednesday it would start lifting tough movement restrictions as most of Southeast Asia remained in lockdown.

Japan to Block Foreign Acquisitions of Drug and Ventilator Makers Amid Covid-19 Outbreak, Says Report
The Japanese government will add companies that specialise in vaccines, medicine and advanced medical equipment to its list of businesses deemed critical to national security, the Nikkei financial daily said.

View: Erecting a firewall against China will only hurt India
India must woo all foreign investors, including the Chinese. But place strategic cos off bounds for takeovers.

Missing in action: The G20 in the Covid crisis
When they finally convened on 26 March, the G20 leaders promised to do “whatever it takes to overcome the pandemic”, but their communique lacked concrete commitments.

A More Trumpian Europe: China’s Changing Perception in Europe’s Eyes
The examples given here – such as the Bild article or Britain and France’s various responses to the ongoing situation – are just a few of the many ways in which the European public and the policy leaders have been changing their soft views on China and moving towards a more Trumpian approach (except maybe with a more eloquent tone). What will be interesting to watch is how exactly Europe handles their post-pandemic relations with China. If Europe decides to further adopt the tactics and rhetoric that President Trump has been using on China in relation to trade decits, investments, and supply chains, as well as on China’s foreign policy abroad and in the South China Sea, then we might see a strong rapprochement between the United States and the EU. A more Trumpian Europe is the last thing that China wants, and could be a huge gamechanger when it comes to the geopolitics of the wider Eurasian region..

Is WeChat losing its appeal to luxury brand marketers?
The world of WeChat marketing is changing. For years, the super app was the alpha and omega of digital marketing in China, with more than a billion monthly active users and a whole industry’s worth of supporting services. But as user growth plateaus and other social media challenge WeChat’s lock on eyeballs, a report finds that WeChat is morphing from ad platform to a marketing Swiss Army Knife for luxury brands.

Worry-Free Strategies Luxury Brands Can Learn From China
Western luxury brands can learn from the rise of the worry-free narrative in China, helping them better navigate the crisis and connect with consumers

IMF forecast of deep global recession will send investors fleeing the property market, say analysts
The IMF’s recent prediction of a global slowdown worse than anything since the Great Depression will hit demand for real estate, says Knight Frank    The economic downturn brought on by the coronavirus outbreak ‘will have a significant impact on deal volume in 2020’, warns property consultancy Cushman and Wakefield

Coronavirus: Missouri attorney general sues China over pandemic, blaming it for ‘trillions of dollars of losses’
Attorney General Eric Schmitt says the Chinese government lied to the world about the contagion and silenced whistle-blowers    Lawsuit seeks unspecified damages for deaths in the state and the economy impact caused by Covid-19

Coronavirus: China’s US ambassador Cui Tiankai takes veiled swipe at Donald Trump for politicising outbreak
Ambassador Cui says little attention is being paid to scientists while politicians are preoccupied with ‘groundless accusations’    Ambassador also defended Beijing’s handling of the disease, which has drawn fire from US president and others

Australia wants international probe into coronavirus origins, prompting backlash from China
Prime Minister Scott Morrison discussed an investigation during phone calls with other leaders overnight    ‘Certain Australian politicians are keen to parrot what those Americans have asserted and simply follow them in staging political attacks on China,’ embassy statement said

Chinese rescue of Virgin Australia up in air amid HNA debt troubles at home, tighter scrutiny on foreign investment
Rescue plan for Virgin Australia remains in doubt as HNA fights fires at home, Australia reviews foreign investment amid pandemic    Australian government has final say on Virgin’s revival plan after carrier went into administration proceedings: S&P

Record tourist numbers since Covid-19 expected for China’s Labour Day, boosting hopes for domestic tourism recovery
The five-day holiday will be the first “mini peak season” this year, according to a report by

Street by street, home by home: how China used social controls to tame an epidemic
Neighbourhood monitoring system is at the heart of restrictions imposed ‘at the expense of public autonomy and vitality’   Chinese city has eased restrictions, but measures remain in place for community ‘cells’

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