China Press Review – February 10, 2020

Press review

China’s GDP growth this quarter will be 0%, according to top economist Ed Hyman
 “Our team has GDP growth at zero for the first quarter,” said Evercore ISI Chairman Ed Hyman. “China is really slowing and that’s worrying people for sure.”  Hyman said the fast-spreading virus will not have much of an impact on the U.S. economy.   “We are so solid,” Hyman said. “It’s not the virus, it’s the trade that matters. People are not going out. They are not shopping, and that’s what’s hurting particularly China.”

China inflation soars as virus triggers buying of essentials
Factory prices rose for first time in six months, although gains are not expected to last even as virus spreads.

podcast : China’s Consumer Inflation Accelerated in January, Beating Forecasts
Cui Li, managing director and head of macro research at CCB International, discusses China’s inflation data for the month of January and what it means for the economy. She speaks on “Bloomberg Markets.” (Source: Bloomberg)

Smaller countries lose in the US–China trade deal
Since the phase one trade deal between China and the United States was inked on 15 January, much of the commentary has focussed on the overly ambitious targets for Chinese purchases of US goods. Critics charge that the deal amounts to ‘managed trade’ or ‘central planning’ that substitutes government diktats for market forces.

China should consider cutting benchmark deposit rates: central bank adviser
China’s central bank should consider lowering its benchmark deposit rate to enable banks to reduce lending rates and help small businesses weather the economic fallout from the fast-spreading coronavirus, a central bank advisor said.

Europe Needs a China Strategy; Brussels Needs to Shape It
Europe’s relationship with China is fraught with disagreements and inconsistencies. Different countries have different approaches, and they are not capitalizing on the collective power of the European Union—all to China’s benefit. Julianne Smith of the German Marshall Fund and Torrey Taussig of the Harvard Kennedy School detail the problems this is causing for Europe and lay out a set of steps that would put Europe in a stronger negotiating position.

China warns France against treating Huawei differently from European competitors for 5G contracts
The Chinese embassy in Paris urged France to establish “transparent criteria and treat all companies in a similar way”   “We do not wish to see the development” in China of Finland’s Nokia and Sweden’s Ericsson being “impacted”, the embassy said

China’s Participation in International Standards Setting: Benefits and Concerns for US Industry
Without continued vigilance by international standards-setting organizations, there is a potential for weaknesses common to the Chinese domestic system to leak in.
China’s key agricultural sector starts to evolve, but can the whole country embrace the new rural economy?
Agriculture has long been the bedrock of China’s political and economic stability as it stands at the heart of the national security strategy    But the rural economy has always lagged behind even as China’s overall economic growth has expanded rapidly over the past 40 years of opening up

In the face of the new coronavirus, China’s economy is more resilient than it was in 2003
While some have pointed out that the global economy is more vulnerable to shocks to China’s economy than during the Sars outbreak, China today has more effective policy levers, deeper resources and better production capacity and technology

What’s the coronavirus’ impact on the world? Economists get creative in finding data to measure the outbreak’s effects
Store closures, flight-tracking websites, factory shutdowns and the latest numbers on infections and fatalities are just some of the high-frequency data points economists are scouring for clues on the hit to growth    The virus has sickened more than 40,000 people around the world, almost 99 per cent in mainland China, killing 910 people with 3,342 recoveries

The coronavirus is already hurting the world economy. Here’s why it could get really scary
Nearly two decades have passed since a coronavirus known as SARS emerged in China, killing hundreds of people and sparking panic that sent a chill through the global economy. The virus now rampaging across China could be much more damaging.  Meanwhile, debt levels have soared in the United States, Japan and key European countries including Italy, limiting the scope for a big fiscal stimulus if the world economy goes into another tailspin. Global debt, including borrowing by households, governments and companies, has jumped to more than three times the size of the global economy, the highest ratio on record, according to the Institute of International Finance.Also critical is whether governments are able to coordinate their response to the outbreak, ideally with help from multinational institutions. This is especially true because, according to the World Bank, preparedness for a potential pandemic is low. But coordination may prove difficult in a increasingly fractured world where nationalism is often prized over cooperation.”It’s quite clear that multinational institutions are under more pressure, and have less teeth on day to day issues than 10 years ago,” Shearing said. “But the optimist in me would like to think that in the face of a global pandemic, global institutions are still in a position to respond.”
Coronavirus outbreak is a new risk to U.S. outlook, Fed report says
Fragility in China’s financial sector may make the world’s second-largest economy vulnerable to adverse shocks

Stocks decline amid warnings China virus still a threat
Global stock markets slid Monday after China reported an uptick in new virus cases and analysts warned optimism the disease is under control might be premature.  Indexes in London and Frankfurt were lower in midday trading and Tokyo, Hong Kong and Seoul closed lower. Shanghai edged up after spending most of the day in negative territory.   A decline last week in daily Chinese reports of new virus cases fed investor optimism the disease and its economic impact might fade. But economists and industry analysts warn the outbreak still is weighing on retailing, tourism, electronics, shipping and other fields.

Factories in China remain shuttered as some regions extend shutdowns amid coronavirus quarantine efforts
Last week, more than 20 provinces and other regions told businesses not to resume work before Feb. 10 at the earliest.   Some provinces and districts have now told companies not to resume work till March 1, according to officials.“That … is a major blast to the global value chain, not only for China, but the world,” said Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis.

China struggles to get back to work
Beijing decided over the weekend against officially extending the Lunar New Year holidays for another week, however today was marked by a muted return to work in the world’s most populous nation with many conglomerates deciding to keep their factories shut for the time being, and tens of millions of workers being told to work from home.    Beijing’s metro system, by way of example, had less than half the normal passengers it would expect on a typical Monday.

Virus fears will slow China’s factories despite a long holiday finally ending
If Chinese businesses cannot resume normal production levels soon, the global manufacturers who rely on China would have to source their supplies elsewhere. The slowdown in production creates more severe damage than an additional 10% tariff on Chinese goods, Renaud Anjoran, chief executive of quality assurance and engineering firm Sofeast, told the Wall Street Journal.  Chinese health officials say people with the Wuhan virus can be infectious before showing symptoms, and that the disease has an incubation period of up to 14 days. That means the first two weeks post-holiday pose a great risk of the disease spreading as workers come back to the city, take busses and subways, eat out together, and hold meetings in small rooms.  Despite its utmost urgency, then, restarting production is still a difficult decision for businesses to make.

Coronavirus: Much of ‘the world’s factory’ still shut
A large number of China’s factories remain closed today even as millions of people return to work after the Lunar New Year holiday was extended due to the coronavirus.

Hardcore’ Quarantine Measures Risk Fracturing Social Cohesion
As China battles the novel coronavirus outbreak, regions across the country are sealing themselves off. But we should be wary of the consequences of local protectionism.   Sooner or later, more than 200 million migrant workers will eventually filter back into China’s cities, and the gargantuan machine that is our country will gradually stutter back to life. When that happens, appropriate and reasonable epidemic prevention measures will still be necessary. We cannot, however, resort to “hardcore” tactics that will exacerbate conflicts between local and migrant populations; widen the divide between rural and urban China; and destroy the integrated domestic market. And once the epidemic is under control, there will be much work to do to restore social order, solidarity, and trust.  Population mobility is conducive to the spread of disease, but it is also a source of social dynamism. We must strike a balance between economic growth and social stability — or risk losing both.

China says to expand imports of meat, other goods to tackle shortages
China will expand imports of meat and other goods key for the public’s livelihood in order to address shortages, an official at its commerce ministry said on Monday, amid a coronavirus outbreak that has disrupted the country’s economy.

How coronavirus toll will spread from China to the global economy
With closures also affecting manufacturing, multinational companies already reassessing their supply chains might reduce their production footprints in the country as a result of the outbreak, as Prasad observed.
Don’t Expect China to Rebound Quickly From Coronavirus
Cascading spillovers in trade, supply and demand, and the movement of goods are difficult to reverse rapidly.
Global consumers reel from China’s coronavirus containment as stop-work orders disrupt supplies of iPhones, Hyundai cars and toilet paper
South Korean carmakers are the first of China’s global customers to feel the impact of the Chinese government’s efforts to contain the spread of the coronavirus  Three of South Korea’s five carmakers halted their production because they could not get crucial components from their Chinese suppliers, whose factories are sitting idle amid the outbreak in China
Xi says China can certainly score “full victory” in epidemic fight
Xi Jinping, general secretary of the Communist Party of China Central Committee, on Monday said China can certainly score a full victory in the fight against the novel coronavirus pneumonia epidemic. “Wuhan is a heroic city and people of Hubei and Wuhan are heroic people who have never been crushed by any difficulty and danger in history. As long as our comrades work together, fight bravely and overcome difficulties, we certainly can score a full victory in the fight against the epidemic

Xi Jinping appears in public as China returns to work after holiday
President greets workers in Beijing as WHO chief warns cases could be ‘tip of iceberg’

Chinese Coronavirus Solution: More Government Control Trumps More Medicine
The above means uncertainty of information in China will increase, distrust of the government will grow, and the general hysteria in the Chinese public will increase. These things will likely exacerbate the paralysis of transportation throughout China that we are already seeing. making the planned return to work scheduled for February 10 very uncertain. Prepare for a bumpy ride.    Tomorrow we will talk about why we are pessimistic about foreign companies getting their products manufactured in China and shipped for delivery.

UK declares coronavirus a ‘serious and imminent threat’ to public health
The UK health secretary declared on Monday that the new coronavirus was a serious and imminent threat to public health, a step that gives the government additional powers to fight the spread of the virus. China’s death toll has jumped to 908, with 40,000 confirmed infections. Another 60 passengers on the stricken Diamond Princess cruise ship in Japan have tested positive for coronavirus, taking the total number of infections on the ship to 130.Tens of millions of Chinese have gone back to work today after the extended lunar new year break. The World Health Organization has sent a team of international experts to Beijing to help combat the epidemic.  The WHO boss has warned that confirmed cases of coronavirus being transmitted by people who have never travelled to China could be the “tip of the iceberg”. A memorial has been held in New York for the whistleblower doctor, Li Wenliang, who died last week from coronavirus.China’s food prices spiked by 20.6% in January. A citizen journalist in Wuhan, Chen Qiushi, who has been reporting on the coronavirus epidemic, has been missing since Thursday.

‘It does not look good’: Wuhan doctors press on in dire conditions after coronavirus whistle-blower’s death
Another doctor says he was questioned by police for alerting colleagues to outbreak late last year  Medical personnel struggle to treat flood of patients with dwindling supplies of protective equipment

The coronavirus and Xi Jinping’s worldview
The coronavirus crisis represents the single biggest challenge for Xi Jinping since he became general secretary of the Communist Party of China (CCP) in 2012. Individuals and families across China are living in fear. Multiple Chinese provinces are under virtual lockdown. The virus has brought significant parts of the economy to a grinding halt, as firms instruct their employees to work from home. Politically, the blame game bounces between local authorities in Wuhan, the epicenter of the outbreak and the central government in Beijing, with both sides mindful of the eternal principle of Chinese politics: When disaster strikes, someone must be seen to pay the price.     In this context, Xi’s management of the coronavirus crisis at home and of politically totemic projects such as 5G expansion abroad, assumes a critical new significance.

Shanghai building new infectious disease hospital for coronavirus patients
City is the latest of more than a dozen in China racing to open facilities to treat growing number of cases    It will be an extension of public health clinic and will have negative pressure wards, where air flows in but not out, and 200 beds

Coronavirus: Taiwan broadens travel ban on Hong Kong and Macau as global deaths reach 910
97 new deaths reported, while number of infections passes 40,000    WHO team of international experts heads to China to help investigate the outbreak

For tech world’s China manufacturers, the coronavirus ‘nightmare’ may be just beginning
As Chinese-based manufacturers begin to restart factories Monday, no one knows for sure when they’ll be back at full-speed — or what sort of chaos may ensue.  Tech producers led by Foxconn, which makes the majority of the world’s iPhones from Zhengzhou a few hundred miles from the coronavirus outbreak’s epicenter, had begun preparing investors for the potential bedlam when hundreds of thousands make their way back to factories.    Apple Inc.’s most important partner warned investors of the daunting task of securing enough workers despite widespread transport blockades, quarantining thousands, and the “nightmare” scenario of an on-campus epidemic that could shut down production altogether. Last week, it took the unprecedented step of warning workers to stay away from its Shenzhen headquarters till further notice as government inspectors vet its containment procedures, Bloomberg News reported.

Only 43% of Japanese companies to resume in China on Monday
Poll shows many still cautious as outbreak throws wrench into supply chains

China’s first-quarter smartphone sales may halve because of coronavirus crisis
The outbreak has resulted in retail shops being closed for an extended period and delayed smartphone production

British universities face long shutdown of Chinese campuses as virus spreads
Colleges must close until next month, while UK firms in the country face dramatic losses

HSBC to provide US$3.9 billion in additional relief to Hong Kong businesses hit by coronavirus outbreak
Taxi and public light bus operators will be able to make interest-only payments, as will property-secured commercial borrowers    Trade finance customers will be able to access up to US$1.3 million in overdraft facilities
Xi Jinping security protégé to bolster China’s coronavirus task force
Former Wuhan Communist Party chief Chen Yixin could play role in maintaining social stability, observer says    Tensions mount in aftermath of death of Wuhan doctor Li Wenliang
Clinical Characteristics of 138 Hospitalized Patients With 2019 Novel Coronavirus–Infected Pneumonia in Wuhan, China
In this case series in Wuhan, China, NCIP was frequently associated with presumed hospital-related transmission, 26% of patients required intensive care unit treatment, and mortality was 4.3%.
Megacities put up coronavirus entry barriers as China goes back to work
Guangdong and Shenzhen go into partial lockdown to contain the spread of the illness as the extended Lunar New year holiday ends   Housing compounds close the gate to all but residents
The coronavirus threatens the Chinese Communist Party’s grip on power
Authoritarianism has made this outbreak worse, not better. The state’s strength in controlling information and suppressing dissent is a weakness in fighting disease
Coronavirus: China’s state media calls for police to explain charges brought against ‘rumour-mongers’
Newspaper under People’s Daily questions why five medical workers were detained, fined for sharing information about deadly outbreak   Police in southwest city of Wenshan issue vague statement saying group’s actions created ‘bad effects’
Coronavirus brings China’s surveillance state out of the shadows
When the man from Hangzhou returned home from a business trip, the local police got in touch. They had tracked his car by his license plate in nearby Wenzhou, which has had a spate of coronavirus cases despite being far from the epicenter of the outbreak. Stay indoors for two weeks, they requested.
‘It does not look good’: Wuhan doctors press on in dire conditions after coronavirus whistle-blower’s death
Another doctor says he was questioned by police for alerting colleagues to outbreak late last year  Medical personnel struggle to treat flood of patients with dwindling supplies of protective equipment
WHO to send mission to coronavirus-hit China
World Health Organisation chief Tedros Adhanom Ghebreyesu says team leader will leave on Monday or Tuesday and rest of experts will follow   Top health emergency expert says there has been stabilisation in number of new cases reported from Hubei province, the epicentre of the outbreak
Coronavirus: scientists race to develop vaccine as death toll surpasses Sars
Efforts being led by the Coalition for Epidemic Preparedness Innovations, a body set up in 2017 to finance biotech research in the wake of the Ebola outbreak in Africa that killed more than 11,000 people   Australian scientists hope their vaccine could be ready in six months
China Says It Has Spent $4.5 Billion to Fight Virus Outbreak
China has spent 31.6 billion yuan ($4.5 billion) to control the outbreak of the new coronavirus, Finance Minister Liu Kun said. About 71.9 billion yuan of fiscal funds have been allocated to the epidemic, including ensuring medical care and outbreak control measures are in place, Liu said on Sunday. The central government’s fiscal authorities will continue to offer favorable policies to curb the spread of the virus, Liu said in remarks posted on the finance ministry’s website. He said local fiscal departments should support the resumption of factory production, and help small and medium-sized firms that may face difficulties after the Spring Festival.

China’s tax and fee reductions to continue in 2020, fiscal spending up 8.1 per cent in 2019
China’s fiscal revenues rose 3.8 per cent, the finance ministry said on Monday   Tax and fee cuts exceeded 2.3 trillion yuan (US$328 billion) in 2019, the ministry said, adding that it will continue to implement tax and fee reductions in 2020

China’s aviation industry plays roles in fighting epidemic
China’s fast-growing aviation industry is playing its part in facilitating the prevention and control of the novel coronavirus outbreak.    China’s civil aviation authorities are active in directing and coordinating the country’s airliners and aviation enterprises to join efforts in fighting against the virus, according to the Civil Aviation Administration of China (CAAC).

Coronavirus & China tech: Winners and losers
China Tech Talk is an almost weekly discussion of the most important issues in China’s tech. From IPOs to fake data, from the role of WeChat to Apple’s waning influence, hosts John Artman and Matthew Brennan interview experts and discuss the trends shaping China’s tech industry.

Can Hong Kong’s relations with mainland China survive the coronavirus crisis?
The fact that the Hong Kong government has upset people on both sides of the border reflects how problematic everything has become now   The city is crying out for a strong and well-prepared leadership that will free its citizens from fear and panic, while also maintaining healthy cross-border ties

A new strain of resistance? How the coronavirus crisis is changing Hong Kong’s protest movement
Hard-core activists back off but contagion helping to maintain momentum of city’s anti-government movement       Mass strikes threat as new unions emerge ready to wreak havoc during this crisis, or the next

Coronavirus: Sony and Amazon pull out of major tech show
Sony and Amazon are the latest major companies to pull out of one of the world’s largest tech shows because of risks posed by coronavirus.

The road to strategic arms talks with China begins by extending New START
The administration’s goal of engaging the Chinese in a strategic nuclear arms agreement is worthy of support, but it is not something that can be achieved quickly.      Bringing China into a strategic arms limitations agreement will take years of hard work, just like what was needed to produce the original U.S.-Soviet arms control agreements. The Chinese have no experience with such agreements, and it will take time to find the common ground needed to reach commitments that constrain sovereign decisions and require robust on-site inspections to verify their implementation.

China has positioned itself as a leader in the fight against climate change, but is it really prepared for the role?
Following the United States’ withdrawal from the Paris Agreement, China, the world’s second-largest economy, was expected to take the environmental lead

Cyber-Luxury: A.I. is Disrupting Luxury
Today, there’s only one way for brands to get fast, reliable insights on everything from key influencers to emerging crises and that’s through cyber-luxury. The world around us is changing drastically. Cyber-luxury, which represents the use of today’s most sophisticated digital and artificial intelligence tools, will continue to shape and change the world of luxury at unprecedented speeds. It is the most impactful technology I’ve experienced in my many years working with brands. Managers simply can’t compete without it.

Managing The Dragon’s 2020 Predictions
Prediction #1: The Phase One Trade Agreement will be successfully implemented in the New Year, and an agreement on Phase Two will be reached by year-end. Prediction #2: During the first half of 2020, negative news about the coronavirus will cause the renminbi, China’s currency, to trade in the range of 6.75 to 7.2 to the US dollar. In the second half, MTD predicts a trading range of 6.5 to 7.0 to the US dollar. Prediction #3: The Shanghai Stock Exchange Index (“SSE”) will recover somewhat in the second half and end the year at or above 3200, a modest 5 percent increase for the year. Prediction #4: Auto industry sales in China will continue to decline in 2020, falling a further 2.0 to 5.0 percent during the year. Prediction #5: New Energy Vehicle (“NEV”) sales in China will resume growth, with sales increasing by 20 percent in 2020.

Singapore Air Show Moves Forward Even As Novel Coronavirus Causes Historic Airline Capacity Cuts
The Singapore Air Show has opened despite cancellations from 70 exhibitors, including Bombardier, Gulfstream, Textron and Lockheed Martin.   The Air Show’s organizers have cancelled plans for a related aviation leadership summit, and also introduced a no-contact greeting policy for show participants.

Dozens of Asia trade fairs, conferences postponed amid coronavirus fears
More than two dozen large trade fairs and industry conferences in Asia have been postponed because of the spread of the China coronavirus, shuttering events where billions of dollars worth of deals have been signed in the past. The venue of China’s oldest and biggest trade fair, the Canton Fair, has suspended exhibitions until further notice. It was due to hold its spring exhibition at the complex from April 15. Last year, $29.7 billion worth of deals were signed at the event. In Singapore, Food & Hotel Asia’s trade show, which attracted more than 80,000 people in 2018, has postponed the first of two events it had planned in the city-state this year.

MWC cancellations snowball as show implements strict coronavirus precautions
At least four more major participants pulled out of MWC 2020 over the weekend, while restrictions on visitors from China have been tightened.

Alain Gillard
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