China Press Review – April 3, 2020

Press review

Coronavirus: China’s unemployment crisis mounts, but nobody knows true number of jobless
As many as 205 million Chinese workers cannot find jobs or are unable to return to their previous posts, according to one analyst   Debate over China’s unemployment reality amid coronavirus heats up, with holes picked in official government statistics

Growth in Emerging Asia to Rebound in 2021 – Asian Development Bank
The Asian Development Bank has stated that growth in Asia is expected to rebound next year following a significant drop in 2020 due to the Coronavirus (COVID-19). In global terms, according to the gloomiest scenario presented by the bank, the impact of the “worst pandemic in a century” will be as high as US$4.1 trillion, or 4.8 percent of global gross domestic product (GDP). However, even this forecast could turn out worse given the impact of the outbreak on global supply chains and how long it will take to contain the virus

Covid-19 Drives Huge Jobless Bounce, Wrecks Consumption
With a global recession all but certain, the Covid-19 pandemic is expected to jack up world unemployment to its highest level in recorded history and batter global consumption, according to a wide and almost-unanimous range of analysts, with Moody’s Investor Service, for instance, warning on March 25 that the virus “will cause an unprecedented shock to the global economy.”  The global GDP growth of zero projected for the whole of this year will be the second weakest rate in almost 50 years, Oxford Economics noted. Oxford Economics does not rule out a worse scenario, where the global economy suffers a contraction of 1.3 percent in 2020 with severe recessions in all major economies. A global recession is certain, including in China, said a report on March 20 by Enodo Economics, an economic think tank headquartered in London. “But the Communist Party is set on a mission to get China back to normal, snatching victory from the jaws of defeat.” China’s mountain of bad debt makes the Chinese Communist Party’s job way harder than it was after the global financial crisis, said Enodo. But looking out on a 12- to 18-month horizon, it is not an impossible task, Enodo added.

Infections are down, pollution is back. But China’s post-coronavirus economic recovery is a long way off
With a quarter of the world’s population still in lockdown and their economies at a standstill, China appears to be rebounding at speed. The worst, though, is yet to come, and investors should not expect business as usual any time soon

Coronavirus: global trade braces for ‘tidal wave’ ahead, as shutdown batters supply chains
A series of data points show where world trade is going, and the picture for air and sea freight is not a pretty one   Supply and demand crises are coalescing on the high seas, as more countries shut their borders

China to Recover Production in 2021, US and EU Face Sluggish COVID-19 Rebound
Regional economic growth in developing Asia will decline sharply in 2020 due to the effects of the novel coronavirus (COVID-19) pandemic, before recovering in 2021, according to the Asian Development Outlook (ADO) 2020, the Asian Development Bank’s (ADB) annual flagship economic publication.
The report forecasts regional growth of 2.2 percent in 2020, a downward revision of 3.3 percentage points relative to the 5.5 percent ADB had forecast in September 2019. Growth is expected to rebound to 6.2 percent in 2021, assuming that the outbreak ends, and activity normalizes. Excluding the newly industrialized economies of Hong Kong, China, South Korea, Singapore, and Taiwan, developing Asia is forecast to grow 2.4 percent this year, compared to 5.7 percent in 2019, before rebounding to 6.7 percent next year. Readers can review our comments and ADB’s predictions for the ASEAN region in our article today on ASEAN Briefing titled Growth in Emerging Asia to Rebound in 2021. Concerning China, the ADB stated that the slowdown is most prominent in China, where the global health crisis first emerged. Recession in Hong Kong and China caused by separate stressors at home and abroad in 2019 will deepen in 2020 but begin to ease as fiscal responses and stronger exports bring recovery, probably beginning in 2021

Coronavirus: China central bank to free up US$57 billion for small lenders in latest effort to help economy
The People’s Bank of China set to cut the required reserve ratio for rural and regional banks to free up 400 billion yuan (US$57 billion)  But the central bank still in no hurry to cut benchmark deposit rate, which would affect hundreds of million Chinese deposit holders

Will COVID-19 bring recession and debt shock to developing Asia?
Developing Asia is famous for engineering V-shaped recoveries following the 1997 Asian financial crisis and the 2008 global financial crisis, as well as emerging as a key engine of global growth. The severity of the COVID-19 pandemic has sparked concerns about what shape global growth recovery will take and what it means for developing Asia.

European business activity craters as Brussels races to find a ‘credible’ funding plan – CNBC
The coronavirus pandemic is hitting European economies sharply, with the latest economic data showing massive falls in services activity across the region.   To overcome, to some extent, the ongoing divisions, the European Commission proposed Thursday a 100 billion euro ($108 billion) fund to support Italy, Spain and other countries hit by the pandemic. The idea is to tap financial markets and use that money to prevent high levels of unemployment in the region. In the meantime, the EU has also scrapped its fiscal rules, to allow countries to spend more during this crisis; it has set up a 37 billion euro ($40 billion) investment fund to support businesses all over Europe, and relaxed state aid rules.  However, the biggest financial help has been from the European Central Bank. The institution is buying 750 billion euros ($813 billion) in European bonds until the end of the year – an announcement that has lowered the costs for European governments in financial markets.

Coronavirus: How Are Countries Responding to the Economic Crisis?
The coronavirus pandemic is slowing global commerce to a crawl, but many of the world’s largest economies are taking extraordinary actions to propel them through the crisis and, hopefully, into a rapid recovery.

More China stimulus coming but ‘no big guns’ yet
The country’s financial markets are starting to lag behind global peers, after initially outperforming on optimism that officials would take more muscular stimulus. The yuan has fallen for seven days versus a basket of 24 trading partner currencies, while the CSI 300 Index of shares trailed MSCI’s global benchmark by the most since 2015 last week.

Alibaba,, Pinduoduo help revive sales of farm goods from Hubei after coronavirus lockdown
China’s three biggest e-commerce companies have launched programmes to revitalise Hubei’s agriculture sector  These initiatives back Beijing’s effort to revive economic activity in the landlocked province and across the nation

Alibaba news roundup: Taobao Live brings businesses online
The Alibaba News Roundup is a weekly digest of events, initiatives and happenings across the company. This week’s coverage looks at Taobao Live’s plans to help more industries in China digitize their operations. Also covered is Cainiao’s logistics solutions amid the Covid-19 outbreak as well as new developments in Ant Financial’s strategic partnerships.

Apple tells staff US stores to remain closed until early May amid Covid-19 pandemic
US technology giant Apple will make reopening decisions based on guidance from local governments and public health experts   About 270 Apple Stores across the US have been closed since March to help curb the spread of the coronavirus

Chinese SOEs should help fund China’s response to pandemic
Despite Beijing’s recent signal that it is ready to launch a larger-scale fiscal stimulus to help battle the economic fallout from the coronavirus pandemic, its fiscal space is running tight. For the Chinese government to control its growing deficit—estimated by the International Monetary Fund to be 9 percent of GDP in 2019, including both on-budget fiscal deficit and off-budget spending—it has to find a way to collect more nontax revenue. One rightful way to do so is to make its state-owned enterprises (SOEs) pay their fair share.    In 2019, only 2.4 percent of the after-tax profits of the central SOEs—those under the direct control of Beijing—in the nonfinancial sector went into China’s central general public budget used to fund social programs (figure 1). If 30 percent had been turned over, as was the goal set by the Chinese leaders in 2013, at least another RMB450 billion (US$63.5 billion)[1] would have been added to the general public budget. This would have eased the government’s fiscal constraints greatly. China therefore must ramp up its long overdue campaign of raising more dividends paid by its SOEs.

American firms selling sensitive tech to China must wake up to possible Communist Party seizure: US official
A US State Department official has given American companies a “wake-up call” on China’s military-civil fusion strategy, as Washington plans further steps to limit China’s access to sensitive US technology.
Christopher Ashley Ford, assistant secretary for International Security and Non-Proliferation, called for the US government and companies to step up the vetting of Chinese firms buying from American companies to ensure the technology could not be used to strengthen China’s military.

Coronavirus: Five Severe Hits to the Automotive Industry
As the coronavirus pandemic is engulfing the world, it is adversely affecting the very structure of our society across the globe in a hitherto unprecedented way. The countries and international organizations around the world are trying hard to halt the progress of this pandemic. The people with infection need urgent medical care, and the people who do not have infection yet are isolating in their own homes.

From Louis Vuitton’s live streams to Shanghai Fashion Week with Tmall: how the luxury sector in China adapted to the coronavirus pandemic
TikTok, Taobao, Shanghai Fashion Week online, LV’s Little Red Book, and other Chinese platforms showcased luxury items and earned millions of dollars

How China is revolutionising e-commerce with an injection of entertainment
While some sectors of the economy struggle for survival in a sudden, new, harsh reality, e-commerce is again faced with massive demand. With many of us confined to our homes, we have become reliant on online shopping. And while your weekly grocery shop or a book order might seem to have changed little in recent years, there is great innovation in e-commerce. To find it though, look to China. There, the familiar and dull experience of buying online is becoming a thing of the past. Even before people were forced to spend more time at home, there were two key trends in China radically changing e-commerce, by adding entertainment to the mix: social buying and live commerce.

How to Get a Handle on Risk in Uncertain Times: 10 Important Considerations risk
Risk: It’s the operative word on everyone’s mind right now. Whether it’s COVID-19 or oil prices, supply chain impacts or financial market concerns, understanding the impact of macro and micro-events, assessing their impact and putting in place the right action plans to mitigate that risk as best as possible is the priority task at hand.     Here we’ll examine ten steps to consider to ensure you’re being as thoughtful and rigorous as possible in your response to risk.

Coronavirus: China to stage day of mourning on Saturday for thousands killed by Covid-19
People asked to observe three minutes of ‘silence’ from 10am as sirens and vehicle horns blast out across the country     Flags to be flown at half-mast to commemorate the 3,322 Chinese killed by the virulent disease

Politics aside, US relies on China supplies to fight virus
US politicians have voiced fury over Beijing’s handling of the coronavirus crisis but they face a harsh truth — the United States desperately needs China’s supplies.

Coronavirus: US starts to change its thinking on wearing protective masks
California becomes the first state to offer official guidelines acknowledging that wearing a mask could help contain the spread of coronavirus    Many Americans have viewed face coverings with suspicion or as unnecessary

Coronavirus lockdowns must last six weeks to bring pandemic under control: researchers
American academics say their study of 36 countries suggests that 45 days of aggressive intervention required to rein in an outbreak    Other factors include the size of the country, cultural greetings, temperature, humidity, and latitude

Coronavirus immunity: how can we develop it and how long might it last?
While the world uses emergency measures to slow transmission, stopping it also rests on the human immune system’s ability to respond  Recovered patients’ immunity expected to last longer than that for influenza, raising hopes for vaccines to have long-term effectiveness

China-style makeshift hospitals could help coronavirus-hit countries, expert says
Advocate of the facilities in Wuhan suggests that home isolation of mild cases puts families at risk   Big buildings such as convention centres should be designed to be easily converted into temporary medical centres, Wang Chen says

Investors still favour China’s assets amid the coronavirus economic shock – for good reason
Chinese equities and the yuan have fared better than their counterparts elsewhere. Without ignoring the risks, it is safe to say China is likely to lead the rest of the world in the recovery from the Covid-19 outbreak

Coronavirus: Chinese academics’ open letter urges Beijing, Washington to come together to beat Covid-19
‘As two of the great countries on Earth, cooperation between China and the US could, and should, be used to bring a more positive outcome for all humankind,’ academics say     ‘Political bickering does nothing to contribute to the healthy development of Sino-US relations, nor will it help the people of the world to rationally and accurately understand and cope with the pandemic,’ they say

Coronavirus: India’s bailout may not be enough to save economy
India has announced a $23bn (£18bn) relief package to help people like Mr Alam and Mr Kumar who are part of India’s unorganised, informal industry which employs 94% of the population and contributes 45% to its overall output.

China’s coronavirus ‘victory’ and Britain’s threat of a ‘reckoning’ show two countries out of touch with the post-Covid-19 future
If a post-Brexit Britain wants change in China, it needs to think about what that change is – and whether it has enough friends left who share those views    But China, too, should reflect on why a warm relationship has suddenly turned cold

Coronavirus: China advises foreign diplomats to stay away from Beijing until May 15
Envoys may have diplomatic immunity, but they are not immune to Covid-19, foreign ministry says   US embassy says its employees will obey Chinese law but calls on Beijing to ensure their ‘protections and safeguards’ are maintained

Chinese man jailed for breaking quarantine rules and lying about travel history
The man from Henan province had visited Italy and France at the start of March and then went back to work   The 29-year-old is the first case of someone being jailed for breaking China’s quarantine rules

Spousal Distancing: The Chinese Couples Divorcing Over COVID-19
As China eases its virus-control policies, some couples are emerging stronger than ever. Others are sprinting straight to the divorce office.

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