China Press Review – March 12, 2020

Press review

European shares set for worst ever day after ECB underwhelms and U.S. travel curbs
European shares were on track for a record loss on Thursday, hitting a near seven-year low after the ECB held off on a rate cut, further upsetting markets reeling from U.S. travel restrictions to halt the fast-spreading coronavirus.  The ECB approved additional asset purchases and temporarily dropped banks’ capital requirements to help the euro zone cope with the shock of the coronavirus pandemic.  However, the central bank kept interest rates on hold, contrary to what markets had been pricing in.

Coronavirus and markets: Why it pays to understand the viral stories that move prices
Economists have long been aware of the power of narratives that try to explain or justify what is happening in financial markets. But now we have the quantitative tools to properly study it and model their economic impact, just as the world is in the grip of a global pandemic

China has bigger role to play in global fight against coronavirus, says country’s top expert
Zhong Nanshan, a leading respiratory disease specialist, says the country can start to help others after entering new stage in its fight against Covid-19  WHO has declared the disease a pandemic but Zhong said that if the rest of the world takes the fight seriously, the tide could start to turn in June

Three ways the coronavirus could trigger a global financial crisis – and why central bankers are to blame
Heavily leveraged tourism-related companies such as airlines, the commercial real estate sector and the residential property market are all vulnerable pressure points    Cutting interest rates will not help these sectors, but it will boost speculation

Halting China’s Economy Was Hard. Restarting It Is Harder.
Beijing brought the world’s No. 2 economy to a halt to quell the coronavirus epidemic. Its difficulties in reviving business offer a potential lesson for other countries.

China boasts massive car and aviation markets. Both collapsed in February
China’s automotive and aviation industries suffered historic drops in activity in February as the government locked down cities and restricted travel to contain the spread of the novel coronavirus pandemic. Car sales in China collapsed 79% compared to a year ago, according to data released by the China Association of Automobile Manufacturers on Thursday. It was the biggest ever monthly decline, according to Reuters. Only 310,000 vehicles were sold

As the coronavirus outbreak advances, expect more rate cuts and more economic turbulence
Fears about the global economic outlook are intensifying, with the release of a set of weak Chinese data. These numbers could be a harbinger of more pain to come for other economies, if the spread of the virus is not contained quickly

Value of US$50 trillion global assets in doubt as coronavirus sucks out US Treasury liquidity
Yields in the world’s largest debt market, which have been on a roller-coaster ride, fell below 1 per cent for the first time ever    The level of volatility and lack of clarity in Treasuries makes it much harder to make sense of the value of all other assets, says Joshua Younger of JPMorgan Chase

Why Angela Merkel Is Wrong On Her Coronavirus Infection Prediction
German Chancellor Angela Merkel just fired a bazooka at her economy and local stock market.  She said today that two-thirds of Germany could become infected by the new coronavirus COVID-19, according to the New York Times. It’s beyond the worst case scenario. It’s not even a severe case scenario. It’s an apocalyptic scenario and assumes no actions by governments and individuals. It also assumes the virus in Germany lasts longer than it’s even lasting in China, the virus’ home.

Oil price war between Saudi Arabia, Russia set to offer China’s coronavirus-hit economy welcome relief
China imported 72 per cent of its oil in 2019, with Saudi Arabia and Russia, who are now locked in a price war, its largest suppliers   Oil prices again fell on Wednesday, with Brent crude down to US$36 a barrel as Saudi Arabia moved to boost output capacity in an escalation of its price war with Russia

China’s Economy Hinges On A Low-Carbon Life For Future Smart Cities
When Deng Xiaoping became China’s president in 1979, he loosened government controls and freed-up market forces. Four decades later, China has become the world’s second-largest economy while realizing high growth rates.   Bloomberg NEF says that China will be the globe’s largest market for wind and solar, which will grow from 8% of the international fuel pie today to 48% by 2050. The main factor will be falling prices coupled with the pressures to reduce emissions and to meet climate goals. The research firm says that the Chinese are investing more in renewables than are most other countries — an effort to diversify its energy portfolio while appealing to urban dwellers.  China is committed to Deng Xiaoping’s quest to provide free-market incentives for both domestic and foreign companies. To incentivize new ventures and to attract to elite brainpower, leaders know they must create vibrant cities, which entails building a cutting-edge infrastructure and minimizing coal use. It’s the new “battlefield” and one with which other nations will be forced to compete.

Coronavirus: China consumers, small firms shy away from borrowing even as Beijing readies more support
People’s Bank of China (PBOC) is expected to again cut banks’ reserve requirement ratio (RRR) in the coming days as its continues to try to boost loans    Households in China reduced debt in February because of fear over the outlook due to the impact of the coronavirus on the economy

The Chinese Cities That Are Recovering Fast
With spring coming earlier than usual, China is hoping for a full recovery from the coronavirus and a return to normalcy. According to local health commissions, four provinces had lowered their emergency response levels as early as February 22: Yunnan, Guangdong, Shanxi, and Guizhou. Decisions about the four emergency response levels rest with the government. Level I, for instance, requires supervision from the state council and immediate action (control softens as the levels descend.)  National statistics show that new infection cases have plateaued, and local trends show a similar story, including infection case numbers in the province of Hubei, where the virus originated.

E-Commerce Upstart Pinduoduo Warns of Short-Term Virus Fallout
Pinduoduo expects the Covid-19 outbreak to take a toll on first-quarter results, the Chinese e-commerce company said as it reported a 91% jump in fourth-quarter revenue.     “The disruption caused by the outbreak will have a negative impact on our results for the first quarter of 2020, but our expectations for the long run remain unchanged and even more positive,” Chief Executive Officer Colin Huang Zheng said Wednesday in a conference call.

Coronavirus: China should not rely on massive stimulus to overcome ‘unprecedented’ economic slowdown
In response to the 2008 global financial crisis, China pumped a 4 trillion yuan (US$575 billion) into its economy but it led to a mountain of local government debt    Various early indicators suggest China’s economy will slow in the first quarter of 2020, with some suggestions it will suffer a first contraction since 1976

Huawei bets big on European 5G patents despite Trump’s pressure
Two-thirds of Huawei’s applications were in the field of digital communications, which includes 5G   US efforts at blacklisting Huawei have not stopped the company from growing its business in Europe

China’s car sales post biggest monthly drop ever as coronavirus hits demand
Car sales in China plunged 79 per cent in February, the biggest ever monthly decline, as demand was hit by the coronavirus outbreak   Sales of new energy vehicles, which include battery-electric cars, contracted for an eighth month in a row

Coronavirus: China to push ahead with Canton Fair despite pandemic threat
China will push ahead with its largest trade fair despite the outbreak of the new coronavirus, says Premier Li Keqiang    The Canton Fair will be an important part of Beijing’s efforts to ‘stabilise’ the global economy, Li says

Coronavirus: China’s mask-making juggernaut cranks into gear, sparking fears of over-reliance on world’s workshop
China is now making more than 100 million masks a day, up from 20 million before the coronavirus outbreak, and may start to export more to other countries   Mask shortages elsewhere once more raise the debate about an over-reliance on China, with critics pointing to a lack of US industrial policy

Chinese businesses are facing a liquidity squeeze as Covid-19 ravages economy with Premier Li calling for monetary easing ‘soon’
More than half of 480 corporate bosses are grappling with cash crunch after sales dwindled amid viral outbreak: Hurun Report survey    Nine in every 10 respondents saw lower sales in February, one-third of them has lost half of their business volume

China to Slash Subsidies for Renewable Energy
The move affecting solar plants and offshore wind farms is part of a government drive to wean such industries off state support.

Here are the major China retail trends under quarantine
Across China, people have been cooking at home rather than venturing into public to dine out. In fact, most restaurants had already closed during the Spring Festival holiday, but as the outbreak spread, fears of contagion kept food and beverage venues from reopening, prompting a surge of interest in both recipes and kitchenware from home cooks. For the online group-buying platform Pinduoduo, egg poachers were included in the “Top Ten Best Selling Product List” for the period of Jan. 24 to Feb. 14.   According to Meituan, China’s largest local services platform, online searches for baking goods jumped a hundredfold during the Lunar New Year holiday. Sales of condiments also increased more than eight times during the same period. Instant noodles were the most popular food on Meituan among consumers born after 1990, with a sales volume of 15.9 million.

Coronavirus: China airline passenger numbers fall 84.5%
Chinese airline passenger numbers slumped by 84.5% last month, highlighting the huge economic impact of the coronavirus outbreak.

Shanghai says travelers from more countries to face quarantine
China’s financial hub Shanghai will from March 13 require travelers from France, Spain, Germany and the United States to undergo a 14-day quarantine upon arrival, the city government said on Thursday.

Keep calm, but take action on COVID-19, economy
Likewise, we can panic in the face of COVID-19 and make things worse. Or we can tackle it united, each doing our part, each an active participant, and avoid what certainly could be a worst-case scenario.

The Price of Beef Is About to Plummet—Thanks to Coronavirus
Is this a good thing?  As novel coronavirus infections officially reach pandemic levels, the social and economic consequences are piling up: huge events cancelled, the stock and oil markets tank, and fears of a recession coalesce. Here’s one that may be surprising: Steak may be about to get a lot cheaper.

World Health Organisation declares coronavirus pandemic as cases soar worldwide
Infections outside China have risen 13-fold, according to the WHO  Officials caution countries to step up containment efforts to prevent Covid-19 from overburdening health care workers

Coronavirus: Donald Trump’s travel ban causes ‘mass panic’, prompting criticism from EU leaders
US president announced sweeping restrictions on travel from Europe on Wednesday, disrupting the travel plans of tens of thousands of people    Trump said he had to act because the EU had failed to take adequate measures to halt the spread of coronavirus

Coronavirus testing in US could face ‘huge’ disruption due to looming shortage of critical lab materials
The slow pace of coronavirus testing could create a major gap in the US public health response, health experts say  Latest problem involves an inability to prepare samples for testing, due to a scarcity of supplies used to extract genetic material from patients

Coronavirus leaves China with mountains of medical waste
More than 20 cities are struggling to dispose of the waste safely with Wuhan, the city at the centre of the Covid-19 outbreak, the worst affected     City is producing more than 240 tonnes a day forcing authorities to deploy mobile treatment facilities

How COVID-19 Sparked a Silver Tech Revolution in China
After cities across China went into lockdown, millions of elderly Chinese turned to mobile apps for food delivery and entertainment. But will they continue using them after the pandemic is over?

Coronavirus Could Send Six Flags Into Its Second Bankruptcy
The coronavirus is a perfect storm for Six Flags. The company could fold because of the unsustainable levels of debt on its balance sheet.

South Korea small businesses, entrepreneurs brace for looming coronavirus crash
The country’s economy, already weakened by regional trade disputes, is being battered by the virus outbreak   And with one of the world’s highest proportions of self-employed people, who have heavy debt burdens, it looks like further pain lies ahead

Italy and South Korea virus outbreaks reveal disparity in deaths and tactics
Italy, millions are locked down and more than 800 people have died from the coronavirus. In South Korea, hit by the disease at about the same time, only a few thousand are quarantined and 67 people have died. As the virus courses through the world, the story of two outbreaks illustrates a coming problem for countries now grappling with an explosion in cases.

China-EU summit to be postponed due to coronavirus – sources
A summit planned for the end of March in Beijing between China and the European Union is set to be postponed due to the coronavirus, two EU officials and two diplomats said, in a blow for the bloc’s efforts to pressure the Chinese over free trade.

South China Sea: Beijing’s ‘dangerous game’ that risks brutal war amid Philippines row
SOUTH CHINA SEA tensions between China and the US as well as other Asian countries have caused many to fear an accidental conflict – and experts are warning Beijing is playing a “dangerous game” which could see hostilities boil over.

How COVID-19 Changed the Conversation About Chinese Journalism
The pandemic has given a shot in the arm to an industry in crisis.

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