China Press Review – March 6, 2020

Press review

Economists Keep Downgrading Their Forecasts for China’s Economy
The outbreak of the coronavirus and China’s efforts to stop its spread mean economists are again revising their estimates for output this quarter, with the median forecast for year-on-year growth to be 4.0%, the weakest in 30 years.     Nomura Holdings Inc. is the latest to change, cutting its growth forecast for the first quarter to 0%, citing a slower-than-expected business resumption rate. Similarly, Pantheon Macroeconomics has lowered its forecast “close to zero” on record-low February factory data. Bloomberg Economics expects the economy to expand by 1.2% in the quarter.

Why the Coronavirus Could Threaten the U.S. Economy Even More Than China’s
If people stop traveling and going to the dentist, the gym or even March Madness basketball games, the impact could be enormous, an economist says.

Coronavirus: China’s trade economy slowly coming back to life, but US$190 billion export hit expected
China’s seaborne imports and exports are close to returning to normal, data shows, but other metrics suggest more pain lies ahead for its trade economy   Report predicts a US$320 billion hit to global trade in the first quarter, with US$190 billion of that for China, as the coronavirus ravages production and logistics

Coronavirus has potential to shake up China trade more than tariffs
“There’s no better time right now to get the Chinese to play ball with you,” said one economist. The coronavirus epidemic is having more of an effect on U.S.-China trade than President Donald Trump’s long-fought trade war, some economists say.

China’s first-quarter economic hit from coronavirus looking more severe: Reuters poll
The coronavirus likely halved China’s economic growth in the current quarter compared with the previous three months, more severe than thought just three weeks ago and triggering expectations for earlier interest rate cuts, a Reuters poll found.  So far, the virus outbreak has spread from China to more than 80 countries, infecting more than 95,000 people and killing more than 3,000. It has also doused expectations for a global economic rebound and triggered an unscheduled U.S. interest rate cut this week, the biggest since the global financial crisis.

COVID-19 just one of a few ‘white swans’ that could trigger next global economic crisis
The COVID-19 outbreak, upcoming US elections, geopolitical tensions and more all portend a tumultuous year ahead, says Nouriel Roubini.

China still faces hurdles in making sure its factories can send goods to warehouses
The latest China Logistics Prosperity index released this week showed the key business volume component dropped to a record low of 26.2 in February, down from 49.9 in January. The recovery of production-related logistics is relatively “weaker” due to its more spread-out nature, Gao Gao, deputy secretary general of the National Development and Reform Commission, said Friday at a press conference. However, the general expectation is that operations at these warehouse and logistics businesses should be closer to normal in the next few weeks.

China invokes ‘force majeure’ to protect businesses — but the companies may be in for a ‘rude awakening’
According to the China Council for the Promotion of International Trade, China has issued 4,811 force majeure certificates as of Mar. 3 due to the epidemic, state media Xinhua reported. Those contracts were worth 373.7 billion Chinese yuan ($53.79 billion), according to the report. While such documents will help entities claiming against one another in the Chinese domestic markets, most claims will not hold up internationally, said international law firm Holman Fenwick Willan.

Coronavirus sends China’s aviation industry into free fall, damaging hopes of becoming global hub
Coronavirus outbreak has been hammer blow to travel worldwide, with more than 70 countries or territories putting restrictions on flights from China  Chinese government expected to step up support for ailing aviation sector, but China’s long-term plans for global dominance could be damaged

Nio raises another $235 million in convertible debt
Chinese electric vehicle maker Nio on Thursday announced the sale of $235 million in convertible bonds to fund its operations. Its shares fell 3.9% by market close during a tumultuous week for global markets.   Proceeds from the offering will relieve near-term cash flow pressures. The company continues to operate in the red even as it nears a major investment from a city-level government.

China Is The Largest Market In With 40% Share Of Global App Spending
The global mobile app spending and usage hit a record high of 2019 with China dominating the market. According to data gathered by, the Chinese market accounted for almost half of the global mobile app spend at 40%.   In general, the Chinese consumer spend was US$92 billion followed by the United States at US$50 billion while Japan comes third at US$32 billion. South Korea is fourth with US$10 billion while the UK closes the top five categories with US$5 billion.

COVID-19 in China: Businesses Lose Less, Work Resumes Faster Than Expected
The impact on businesses operating in China, and the resumption of China factory deliveries, has been less of a problem than initially appeared would be the case during the first two months of 2020. Dezan Shira & Associates, with 300 China staff and 12 mainland China offices, have reported just a 3 percent drop in revenues for the January-February 2020 period, compared with the same period last year.

Coronavirus: vaccines ‘on track for emergency use’ in April
Chinese health official says progress being made on five vaccine fronts but difficulties expected   An analysis of cases in the southern Chinese city of Shenzhen found no significant difference between rates of infection for under-10s and general population

Stay or go? Tough call for Chinese in Italy as coronavirus crisis hits
Thousands of migrants from China’s eastern seaboard are questioning their future in the euro zone’s third-biggest economy as Covid-19 takes hold   Business is taking a battering and some wonder if they are welcome

Coronavirus: China’s huge migrant worker population bearing the brunt of economic shutdown
Migrant workers could lose a combined US$115 billion in wages as factories struggle to resume output and many services businesses remain closed    Nearly impossible for them to make up lost wages by working longer hours, analysts say, since earnings largely supplemented by commission Per capita disposable income in China’s poor rural areas rose by 11.5 per cent in 2019 to 11,567 yuan. Most of this income comes from farming, rentals and government subsidies, with wage increases rising 12.5 per cent to just 4,082 yuan last year, according to Chinese official data. Across the whole country, rural per capita income rose by 9.6 per cent to 16,021 yuan, of which 6,583 yuan was in form of wages and salaries, or just over 40 per cent of the total.

China has been overstating the role of private investment in its economy
As shown in the table below, the estimated share of private investment in 2019, based on the new data, is 44.2 percent, compared to the 48.5 percent in 2017 that can be calculated from officially reported data. The estimated share of state investment in 2019 is 42.4 percent, compared to the 37.0 percent in 2017 that can be calculated from official data.

China could face decade-high bad loan ratio as coronavirus slams small businesses, DBS says
Overall bad loan ratio may reach 2 per cent this year as coronavirus businesses in sectors hardest hit by coronavirus outbreak    Postal Savings Bank has the highest loan exposure to central China where the viral outbreak originated, DBS says

Asia must brace for short-term volatility as Covid-19 hits China and South Korea harder than expected
The surge in infections in South Korea is dampening economic activity even as China struggles to return to work, hurting demand for exports from the rest of Asia    Governments are rolling out accommodative measures but if Covid-19 continues to spread, expect uncertainty to remain in the near term

Coronavirus outbreak will cause a national crisis in South Africa, President Cyril Ramaphosa says
Epidemic will have a ‘huge impact’ on travel and hurt country’s already precarious economy, leader says    A 38-year-old man who recently visited Italy became South Africa’s first confirmed case on Sunday

Samsung to shift some smartphone production to Vietnam due to coronavirus
The company’s plant in the southern city of Gumi makes the new Galaxy S20 and the Z Flip foldable smartphones  Gumi is near the city of Daegu, the epicentre of South Korea’s novel coronavirus outbreak

Confusion as small Chinese city in coronavirus zone eases lockdown
Chibi in Hubei says it is removing internal checkpoints but residents say it is still a struggle to get around    No new infections reported in the province, with the exception of in Wuhan, where the epidemic began

Chinese schools reopen as coronavirus cases rise rapidly in Europe
No new cases in Hubei province outside Wuhan as number worldwide approaches 100,000  Qinghai, a north-western province in China that had reported no new infections for 29 days as of 5 March, said it would stagger the start date of different school days from 11 March to 20 March, according to a notice posted on an official website on Friday.   The south-western province of Guizhou, which reported no new infections for 18 days, had said at the end of February that schools would reopen from 16 March.

Coronavirus Impact: Lessons From China And South Korea For The U.S.
The U.S. has two good examples in how to tackle the onslaught of the new coronavirus: one is in China. The other is in South Korea.    If China’s numbers are to be trusted, the coronavirus COVID-19 is winding down on the mainland. As it does, it seems to be just getting started in the United States.

Inside the Race for a COVID-19 Cure
Scientists across the world are rushing to develop effective treatments for the novel coronavirus. But how soon can they be on the market?

Progress against coronavirus in China as new cases wane in epidemic hot zone
Health official says country pressing ahead with vaccine development and one may be ready for emergency use next month   Special task force member signals that lockdowns could soon be over but stops short of saying when

 China’s Battle Against Coronavirus
In an extensive interview with The New York Times, Dr. Bruce Aylward, of the World Health Organization, described what he learned

Why did a ‘cured’ coronavirus patient die in China? His widow wants answers
Li Liang appeared to have recovered from a mild case of Covid-19 until his condition suddenly worsened at a temporary quarantine facility in Wuhan   Li’s wife held him in her arms as breath faded and his body went cold

Can China’s COVID-19 strategy work elsewhere?
Chinese hospitals overflowing with COVID-19 patients a few weeks ago now have empty beds. Trials of experimental drugs can’t find enough eligible patients. And the number of new cases reported each day in China is dropping precipitously.

Hong Kong researchers join US tech start-up to remotely monitor Covid-19 patients and quarantine cases in world’s first trial of its kind
Researchers at HKU join US tech start-up to conduct a trial to remotely monitor Covid-19 patients and others in quarantine centres   Joint effort aims to engage a majority of confirmed Covid-19 patients and other increasingly larger group under quarantine orders

Wall Street drops more than 3 per cent on coronavirus fears, as travel shares take beating
Plunge comes just a day after market rallied thanks to Joe Biden’s success in Super Tuesday primaries   CBOE Volatility index, Wall Street’s fear gauge, jumped 7.62 points to 39.61

Why the Fed’s latest rate cut is an overreaction and sends the wrong signal to markets
The emergency rate cut, its first since the 2008 global financial crisis, reinforces fears that the world economy is in trouble, and may yet send record low Treasury yields into negative territory. The Fed is misusing its best economic tool

China’s Belt and Road facing delays, disruptions due to virus
China-linked infrastructure projects in Asia are being affected, mainly due to travel restrictions on Chinese workers.

Starbucks predicts a 50% sales drop in China because of coronavirus
Starbucks is expecting significantly lower sales in its Chinese stores in the current quarter because of the deadly coronavirus.

These Events Have Been Confirmed, Postponed or Canceled Due to Coronavirus
A running list of major conventions, meetings and trade shows affected by the spread of coronavirus.

List of Conferences Cancelled, Postponed or Delayed Due to Coronavirus [COVID-19]

The coronavirus is shaking up the world’s art market in unexpected ways
As COVID-19 hits the Hong Kong art market, its repercussions will be felt around the world and not just in Asia. The crisis may upend old business models and jolt the art market further into the virtual realm.

How China’s coronavirus crisis exposes the Achilles’ heel of Communist Party power
The party’s initial mishandling of the outbreak has eroded support among China’s urban middle class   The brief but intense eruption of public criticism is a taste of how such missteps can threaten the social contract on which the party’s legitimacy is built

Coronavirus crisis will ultimately strengthen Xi Jinping and Chinese Communist Party despite economic turmoil, US analyst says
Another prediction: likelihood of China meeting the purchasing goals of the phase one US trade deal this year is ‘somewhere between zero and zero’   ‘The state expands to deal with the crisis and then remains at a new expanded level even after the crisis fades away’

Chinese economy back on track: Changsha as an example
In the previous episode, we examined the Chinese economy amidst the novel coronavirus outbreak. We determined that, despite the effects of the outbreak, China can still expect bright prospects in its economic development. One clear sign for it right now is that businesses around the country have begun to resume work and production.

How Much Does it Cost to Raise a Child in China?
According to a recently released report, the average family living in Shanghai’s central Jing’an District spends more than 800,000 yuan ($115,000) per child from birth to junior high school. Low-income families, defined as those with an annual household income of less than 50,000 yuan, spend an average of 70% of what they earn on their children.

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