China Press Review – April 28, 2020

Press review

Will the coronavirus pandemic be the final nail in the coffin for China’s manufacturing dominance?
While some labour-intensive supply chains and those that target the US market may move out of China, sophisticated manufacturing clusters related to electronics and the internet of things are not easy to replicate quickly

Coronavirus: how will China’s role in the global economy change when faced with pandemic backlash?
Beijing is bracing for repercussions following the coronavirus, but it is determined to maintain China’s integral role in the global economy    Realignment of global value chains will speed up post-crisis, but China can leverage its advanced infrastructure and industrial capabilities, experts say

China analysts said unemployment at 20% (vs,. officially at 5.9%) – withdraws their report
A report written by a group of three analysts from Zhongtai Securities put job losses around 70 million people due to the economic fallout from the coronavirus pandemic

The effect of COVID-19 and disease suppression policies on labor markets: A preliminary analysis of the data
Keeping the economy open has not saved countries from severe economic disruption. The disease is inherently dangerous and people are adjusting their behavior and spending in ways to mitigate transmission even in the absence of severe rules. The global economy, of course, is also beyond the control of any one country, and has ground to a near halt. Yet, some countries have managed to both contain the virus and preserve economic relationships. New Zealand, Australia, Denmark, and Germany strike us as the most successful in that respect and worth careful study. The United States has not fared well, with high mortality rate per capita and a massive surge in unemployment claims, despite large-scale spending from the U.S. Congress.  We stress that these are preliminary conclusions. Both on the economic and public health side, the crisis is far from over. The pandemic is still in its early stages and the possibility of a rebound in certain cases is still high. Whether countries have, as for now, avoided the worst of the pandemic or confronted a raging crisis, they can at least lessen the long-term economic harm by investing in the employer-employee relationship.

The Impact of the COVID-19 Pandemic on Financial Inclusion
The dawn of the new decade has seen the world gripped by an unprecedented health crisis, with a pandemic never experienced before in our lifetimes affecting countless individuals, families and communities. To date, almost 2.8 million people have been affected by the coronavirus (COVID-19), with 2.7 billion of the global workforce facing full or partial closures of their workplaces and governments rushing to provide stimulus packages to soften the economic blow from the outbreak.
These restrictions have affected banks as well, with widespread branch closures and opening hours shortened in an effort to curb the spread of the virus. Customers are increasingly being encouraged to use online and mobile banking as customer service phone lines are inundated with a huge volume of calls. With greater restrictions in movement being introduced, access to one’s finances – at least digitally – becomes crucial. The World Bank describes financial inclusion as “access to useful and affordable financial products and services” including “transactions, payments, savings, credit and insurance delivered in a responsible and sustainable way.” This accessibility to financial services, so often taken for granted in developed nations, supports us in our day-to-day living and allows for the planning of longer term goals, which leads to an improvement in our quality of life.

Will $6 Trillion in Global Quantitative Easing Be Enough to Beat the 2020 Recession?
Now that the U.S. Federal Reserve has committed to yet another round of massive asset purchases, it’s important to understand just how much quantitative easing there is in the world. On top of the United States, other central banks are seeing their balance sheets expand rapidly as they have been buying countless amounts of public assets and private assets.    Central banks are greatly increasing their lending to financial institutions to fight against the damage that the coronavirus is having on the economy. According to FitchRatings, quantitative easing asset purchases are likely to hit a total of $6 trillion in 2020. The European Central Bank has purchased roughly 120 billion euro in a four-week period from mid-March through mid-April 2020. As of the end of 2019, its holdings of securities of euro area residents denominated in euro was roughly 2.85 trillion before adding in additional assets held. For monetary policy purposes For context, they had been buying roughly 20 billion euro each month prior to the COVID-219 pandemic. The European Central Bank implemented an additional 870 billion euro for quantitative easing in mid-March in an effort to lessen the economic impact that the shutdowns and deaths are causing on the economy.

Leveraging e-commerce in the fight against COVID-19
E-commerce—defined broadly as the sale of goods and services online—is emerging as a key pillar in the global fight against COVID-19. Online grocery shopping and telemedicine, for instance, are helping to avoid in-person contact and reduce the risk of new infections. Video chats, movie streaming, and online education make physical distancing measures more bearable. In China, e-commerce companies played a key role in keeping the residents of Wuhan supplied during their two-month lockdown earlier this year.

10 technology trends to watch in the COVID-19 pandemic
The COVID-19 pandemic has accelerated 10 key technology trends, including digital payments, telehealth and robotics.  These technologies can help reduce the spread of the coronavirus while helping businesses stay open.    Technology can help make society more resilient in the face of pandemic and other threats.

China’s new cybersecurity rules could hit foreign service providers
Regulations will come into force in June requiring national security review of critical information infrastructure purchases There are concerns the new rules may deter Chinese companies from using overseas suppliers

After COVID 19: Asian Countries and Investing in the US
COVID 19 will change trade relations among Asian countries themselves, as well as between the U.S. and Asia.

For Chinese contractors, Belt and Road Initiative rewards come with heightened risks in a changing world
Chinese contractors snared almost a quarter of global construction revenue in 2018 as the Belt and Road Initiative took flight     Their rise in global stage brings multiple risks across many projects and various jurisdictions

These countries effectively contained the coronavirus, and their currencies are surging in response
As Australia, New Zealand and South Korea gradually re-open their economies and lift lockdown measures, their currencies have also jumped significantly compared to earlier this year, when the outbreak ravaged the Asia Pacific region.  “New Zealand and Australia have been very effective in controlling COVID-19 and are ready to restart their economies,” Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, wrote in a note.   “There is also a notion that Asia has controlled the virus more effectively than the US and Europe,” added Tapas Strickland, director of economics and markets at the National Australia Bank.

HSBC increases bad loan reserves to highest level in nine years, profit misses estimates on credit losses
HSBC added US$3 billion to its provisions for loan losses and impairments in the first quarter as pandemic weighed on clients   Bank warns credit losses could rise to between US$7 billion and US$11 billion for the full financial year amid fears of a global recession

Korea’s April consumer sentiment hits the lowest since 2008 financial crisis
South Korean consumers in April have become as pessimistic about the economy and income as in the wake of 2008 global financial meltdown upon witnessing devastating economic damages from the coronavirus outbreak at home and across the globe.

Bank of Japan expands easing measures, cuts growth forecast
TOKYO: The Bank of Japan on Monday ramped up its emergency monetary easing and cut growth forecasts for the world´s third largest economy, as the coronavirus pandemic ravages the globe.

How can India end the lockdown?
The lockdown has been a long haul and the end may not be in sight yet. But, the future does not look as bleak.

Japan’s timid COVID-19 response
The world is facing a major pandemic, the scale of which we have not seen in at least a century. There has been a sharp contraction of economic activities across the globe as countries successively shut down schools, business establishments and public gatherings. There is talk of relaxing strict lockdown measures in some places, but the full resumption of economic activities will not occur until a vaccine is developed or an effective treatment is found. A silver lining is that the economy’s productive capacity and financial sector remain unimpaired. To ensure that recovery is robust— when it does take place — the government must keep the hibernating economy unimpaired. This is why Abe should not be so timid in providing support to viable firms and adversely affected individuals. If he wants to hold on to the legacy of economic success, he must take bold measures — paradoxically — to shut down the economy and engage in uninhibited fiscal spending. Such spending, consisting of loans to businesses to be paid out of future profits and cash transfers to households financed by future progressive income taxes, is what Japan needs to secure a vigorous economic recovery, hopefully in the not too distant future.

Containing COVID-19 in Bangladesh
COVID-19 is now in Bangladesh. It is one of the world’s most densely populated countries with poor healthcare infrastructure, weak logistical facilities, widespread poverty, and inadequate safety nets and income transfer mechanisms. It has not faced a crisis of this magnitude in its five decades as an independent country.  Bangladesh cannot rely on international assistance at this time. To meet the huge expansion of spending and the resulting fiscal deficits, the government should be prepared to monetise the debt through the central Bangladesh Bank. Money financing of the deficit is unlikely to generate inflation in the context of huge deflationary pressures from the collapse of household and corporate spending. But this is not a time to worry about fiscal deficit targets or future inflation. This is the time to ensure that the damage and deaths from COVID-19 are contained. Delay and procrastination will be catastrophic. The government must act now and act decisively.

Goldman Sees ECB Policy Boost After Fiscal Plans Fall Short
In the absence of more fiscal support, strategists at Goldman Sachs Group Inc. say the European Central Bank will probably step up its emergency stimulus measures this week. The policy-setting Governing Council will likely increase its Pandemic Emergen

Thailand and Malaysia hesitate to follow Vietnam out of lockdown
Wariness remains despite slowing coronavirus spread in some countries

Restaurants, markets among 8 Bangkok venues tipped to reopen from Friday
Restaurants, markets, sports centres, public parks, salons, pet clinics, medical services and golf courses in Bangkok might have a chance to reopen after the Bangkok Metropolitan Administration decided to ease its lockdown measures from May 1.

China is expanding listing reforms to Chinext startup board
China announced Monday a reform that brings the Nasdaq-style registration-based listing process used by Shanghai’s STAR Market bourse to Shenzhen’s Chinext startup boardChina is stepping up efforts to mobilize private capital to assist companies hit by the coronavirus outbreak and accelerating financial market reforms amid increasing scrutiny of Chinese firms in overseas stock markets

China’s TikTok, Douyin, tests social networking feature as it competes with Tencent’s WeChat
A function called ‘Connection’, which has been available to some Douyin users since late February, matches strangers and allows them to video call each other    Tencent-owned WeChat is still the most popular social networking app in China, but Douyin owner ByteDance has been trying to expand into the area

Coronavirus latest: Trump says ‘we are not happy with China’ as US cases near 1 million, 56,000 dead
US president suggested that he may seek damages from China over the coronavirus outbreak
Next year’s Olympics will be cancelled if pandemic not over: Games chief

US politicians are telling ‘barefaced lies’, China says, after Donald Trump repeats call for coronavirus damages
Foreign ministry spokesman in Beijing says White House is trying to shirk responsibility for the spread of Covid-19     US president repeats threat to demand compensation as polls show Americans are increasingly likely to blame China

Opinion: Covid-19 Offers Way Out of Thucydides Trap
As Graham Allison of Harvard University has warned, “when a rising power like Athens, or China, threatens to displace a ruling power like Sparta, which had been the dominant power in Greece for a hundred years, or the U.S., basically alarm bells should sound.” Nowadays, the alarm bells are sounding so loud that they are drowning out ideas that would allow the United States and China to escape what Allison called the “Thucydides Trap.”

China is overreaching in bid for greater global influence amid coronavirus pandemic, US advisers say
Testimony before the US-China Economic and Security Review Commission in Washington highlights several moves that have tarnished China’s image     The US and other Western countries are also faulted for ceding ground to China and failing to work cooperatively

A Shanghai postcard: life after the COVID-19 economic shutdown
Marketplace’s Jennifer Pak on a hike three hours outside of Shanghai. Before departing, she had to make sure she could return to the city without being quarantined. Jennifer Pak/Marketplace
The Chinese financial capital, Shanghai, has officially been back at work since Feb. 10, after a near economic shutdown due to the COVID-19 virus pandemic. Not everything, however, is 100% back to normal.

Coronavirus: is Covid-19 task force Duterte’s ‘Rolex 12’ in plan for Marcos-style martial law in the Philippines?
Scenes of army troops flooding the streets to police the lockdown bring back bad memories for Filipinos who lived through the Ferdinand Marcos era   Some critics liken Duterte’s Covid-19 task force – led by former army chiefs – to the ‘Rolex 12’ junta of the former dictator

Is China and Vietnam’s ‘brotherly love’ adrift in the South China Sea?
When it comes to the disputed waterway, both countries are finding that a history of comradeship is not a foundation for national policy   Hanoi may soon find itself outflanked by Beijing – all while the US monitors developments in the region

Coronavirus: How New Zealand got its coffees and fries back
Coffee and fast food seemed to be the first thing on the mind of New Zealanders as the country emerged from almost five weeks of strict lockdown

Coronavirus: Australia calls China’s envoy over ‘disappointing’ remarks
Trade minister says ‘economic coercion or threats of coercion’ won’t change Canberra’s position on the need for an inquiry into the pandemic   Ambassador Cheng Jingye has slammed the move as ‘politically motivated’ and suggested it could have consequences

Hackers have stolen Covid-19 medical data from a Beijing-based AI firm
A Chinese artificial intelligence firm has become the latest victim of Covid-19 cyberattacks, as hackers look to profit off stolen medical data and research in the midst of the pandemic

A decade after Chinese human rights lawyers Tang Jitian and Liu Wei were disbarred, much has changed – for the worse
Despite the coronavirus pandemic, liberal democracies and lawyers around the world must advocate for persecuted human rights lawyers in China, who are subject to arrests, prison sentences, disbarments and enforced disappearances

Back to school with Tencent and friends
Health surveillance goes into schools as some classes resume  With China easing lockdown restrictions, some students’ long breaks from in-person classes are finally coming to an end. But as they return to school, they will need to prove their health to some high-tech security guards. China’s tech companies have been eager to position themselves as health surveillance providers, using QR codes, “smart gates,” and even smart payment devices to mass screen students while minimizing unnecessary human contact. Some health code systems (in Chinese) even claim to text parents when their children enter and leave school.

Will China reinvent the Internet?
In a world where interdependence is increasingly being ‘weaponized’, more attention is being paid to hidden levers of control embedded in transnational technological design and infrastructure. In an environment of growing suspicion towards China, the role of Chinese actors in this regard is increasingly scrutinised. But while the Chinese Party-state has political goals for technological development, these should not be the sole lens through which the actions of Chinese firms are perceived. The case of design for the future Internet illustrates how excessive focus on Chinese political motivations can obscure many other interests and factors involved.

Chinese homebuyers go on ‘revenge spending’ binge as cities emerge from coronavirus lockdowns
Demand was only deferred by lockdowns and did not disappear: Centaline  Rebound is fragile, S&P Global Ratings says, maintains view contracted sales will drop 5 per cent to 10 per cent in 2020

Is this the End of Wholesale?
During the lockdown, many brands are relying on their DTC channels to maintain client relationships and sell products. Does this mean the end for wholesale? P

Coronavirus: Chinese tourist trips during Labour Day weekend to drop by half
Overseas holidays are out but car travel and upscale hotels and resorts in China are main choices for those who do intend to take a break    The five-day holiday which starts on International Labour Day is the first peak travel season of the year for Chinese holidaymakers

China’s COVID-19 Travel Ban: How to Handle Your Foreign Employee’s Work and Residence Permit
Since March 28, 2020, China has suspended the entry of most foreign nationals, citing the temporary measure as a response to the rapid spread of COVID-19 across the world. This means that foreigners who hold the following visas are currently not allowed to enter the country:
Chinese visa; Residence permit; APEC business travel card; and/or Port visa (including various visa-free transit policies).Due to these new travel restrictions, which so far have presented no expiration date, many foreign nationals who hold a residence permit in China for working purposes are stuck outside of China during this time.

Air Belgium, partner of Pharmasimple SA to bring medical equipment from China
Belgian online drugstore Pharmasimple partnered with Air Belgium to bring medical equipment from China.

Alain Gillard
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