China Press Review – May 13, 2020

Press review

Even as coronavirus-related barbs fly, it’s crucial that the US-China phase one trade deal holds fast
While it will be tough for Beijing to meet its overall purchasing commitments under the trade deal within two years, it is in the interest of both China and the US to avoid economic decoupling

Coronavirus: US-China blame game prompts Beijing hawks to ramp up criticism of phase one trade deal
Ahead of China’s crucial ‘two sessions’ policy meetings next week, criticism of the US-China trade deal has grown from state-backed news and social media outlets     Analysts suggest Beijing is still committed to phase one, but the gloves are off with regard to how the deal and the US handling of it is discussed in official organs

China Releases Follow-Up Tariff Exclusion List for US$60bn Worth US Imports
According to the Notice, a list of 79 US imports will be eligible for waivers from China’s retaliatory tariffs, including products like medical disinfectants, rare earth ores, silver and gold ores, concentrates, some nickel, aluminum alloy products etc. The tariff waiver will take effect from May 19, 2020 to May 20, 2021.

China-EU summit on investment deal, Covid-19 likely to start next month, sources say
European Commission President Ursula von der Leyen, Chinese Premier Li Keqiang and other senior officials to discuss key issues via series of online meetings, according to insiders  Brussels and Beijing have expressed their desire to conclude a comprehensive investment agreement by year’s end but clashes over coronavirus may hamper negotiations

The meaning of systemic rivalry: Europe and China beyond the pandemic
Beijing’s handling of the pandemic has changed long-standing European assumptions about its reliability as a crisis actor and its approach to the European project. Europe’s immediate medical-supply needs and dire economic situation will limit the scope of shifts in its China policy – for now. But, on issues ranging from supply chains to ideological competition, European governments have rebalanced their view of what dynamics with China should look like in the aftermath.The crisis is also intensifying demands from European parliaments, media outlets, and citizens for Europe to puts its China policy on a more open, accountable, and values-based footing.Governments’ pursuit of a “business as usual” approach to Beijing is growing harder to sustain.

China’s Economic Recovery Might Be Slower Than Expected
The National Bureau of Statistics is reporting 3.3% growth year-on-year for April in its consumer price index (CPI). Meanwhile, the producers price index (PPI) fell to -3.1% from -1.5% in April  China reported two monthly indices today that are shedding some light on just how quickly China’s economy is recovering. The short answer? Slower than expected.  The National Bureau of Statistics is reporting 3.3-percent growth year-on-year for April in its consumer price index (CPI), which is a 1-percent drop from March’s CPI growth. Meanwhile, the producers price index (PPI) fell to -3.1 percent from -1.5 percent in April, indicating weaker demand, which has led to producers asking a lower gate price than normal.

How Much Will the Chinese Economy Be Damaged by COVID-19?
Early economic policies focused on ensuring logistics for emergency supplies. This was followed by measures to manage social and economic issues, including labor, taxation and business financing. Since February, the government has turned its attention to restarting the economy. Financial authorities announced various measures to meet firms’ financing needs, and other policies were issued to facilitate business operations and reduce costs. These include measures to ensure smooth and affordable transportation, value-added tax reduction, relaxation in land use policy, reducing the cost of utilities and reduction and exemption of insurance premium payments by firms.   Support is also provided by some local governments, such as financial assistance for firms to buy masks and other supplies for business resumption, transportation for returning migrant workers and subsidizing firms’ rent payments.  We believe that recovery is on the way, and the Chinese economy will likely fare better than many of its neighbors and achieve an annual growth of 2%-3% this year.

Restarting China’s economy?
China’s economy is now gradually recovering from COVID-19 and is entering a reopening phase. But reopening the economy carries the risk of a second wave of outbreaks. While the reopening of China’s economy is positive news for the world economy, the global economic slowdown still poses a great challenge for China’s return to normalcy.  Small and medium-sized enterprises (SMEs) are the backbone of job creation in China. Over 5 million workers lost their jobs and the urban unemployment rate rose to 6.2 per cent in February, the highest since 2002. Nearly 9 million students will also be graduating from universities and entering the job market. Employment is the top priority for the Chinese government and should be the focus of its policy response. To effectively reopen the economy and create jobs, four important steps must be taken.

The post-pandemic world could be more sustainable and inclusive. The choice is ours
The talk everywhere is about decoupling and bringing supply chains home, but the retreat from hyper-globalisation need not mean trade wars. It is possible to envisage a more sensible, less intrusive model of economic globalisation

New tech infrastructure will help economies recover after COVID-19
Companies can seize the opportunity offered by new infrastructure by being flexible and open-minded.
Accelerating the development of the “new infrastructure” – including the deployment of 5G networks and data centres – has become a top priority for China’s central government. Industry experts and academics have now shifted focus accordingly, and it is clearly the time to move in-step with this overall development focus.

Opinion: Exiting the Covid-19 Crisis Will Require More, Not Less, Integration
Global markets begun the new year with cautious optimism that world economic growth could be sustained, following progress in January on a trade deal between the U.S. and China, the two economic powerhouses of our time. By March, as concern of a sharp downturn resulting from Covid-19 led to one of the worst quarters for equities in

Chart of the Day: Chinese Banks’ Bad Debt Level Reaches 11-Year High
The nonperforming loan (NPL) ratio of China’s commercial banks climbed to 1.91% at the end of March, up 0.05 percentage points from the end of December and marking the highest level since March 2009, official data (link in Chinese) showed Tuesday.

How Chinese department-store chain Intime survived Covid-19, online and offline
It’s Labor Day weekend in China and customers in masks have been trickling into Intime’s Hangzhou West Lake branch incessantly since 10 a.m. Shoppers floated from counter to counter, determined to snatch the best deals the long holiday has to offer. Since the widespread outbreak of Covid-19 across the country at the start of the year, this is the first time that the five-story department store has been able to operate at normal capacity.

Alibaba digital economy Covid-19 supports efforts
Alibaba Group has taken a wide range of business initiatives to support consumers, partners and merchants as they retool, rebuild and recover during this challenging time. For details on philanthropic efforts undertaken through the Alibaba Foundation and the Jack Ma Foundation, please click here.

Is China’s e-payments tech ready for the rest of Asia?
E-payment options like WeChat Pay & AliPay have taken China by storm, making up nearly 90 percent of the local market   As the home market becomes saturated, Chinese mobile payments look to broaden their business around Asia, with Southeast Asia showing promise

Leave China? No thanks, some Japanese firms say to Tokyo’s cash incentives
Toyota is among the firms who say they have no plans to change their strategy in China, as Tokyo offers subsidies to encourage supply chain diversification   Analysts say the companies are being careful with their comments. But leaving the world’s second biggest economy isn’t going to be that easy or desirable

Hong Kong, Asia stocks weighed down by US top coronavirus expert warning of risk of opening businesses too soon
Tencent slips ahead of first-quarter earnings coming after market close    Virus, US-China tension driving markets; companies issue fresh profit warnings

Malaysia’s Q1 GDP unexpectedly expands, seen contracting this quarter
Malaysia’s economy recorded growth in the first quarter, confounding expectations for a contraction even as the COVID-19 pandemic took a toll on exports and domestic demand.

China’s local officials under pressure amid coronavirus pandemic to address rise in unemployment
Chinese leadership prioritises keeping unemployment numbers down as soaring jobless rate threatens social stability     Policies include incentives aimed at those most at risk – graduates, migrant workers and the small business sector

China recognises scientists and medical experts on front line of coronavirus pandemic
Awards for innovation will be given to teams who treated patients in the initial epicentre of Wuhan and scientists on the ground   Observers see it as a way to boost morale and support for Communist Party, as Beijing seeks to ‘show the world it can bring a solution to the crisis’

China seeks to make coronavirus testing part of the new normal
Country does not keep a daily tally of how many tests are being carried out but its capacity is far greater than other nations    Industry ministry said in April that China had the ability to produce 5 million test kits a day

How technology helped Asian countries cope in the coronavirus pandemic
Technology has helped some countries in Asia respond quickly to disruptions caused by the coronavirus pandemic, allowing them to cope a little better, according to Mckinsey & Company’s regional chairman, Oliver Tonby.  The consultancy released a report that outlined six areas where policymakers and companies in Asia relied on technology to safeguard people’s health and their livelihood, in light of severe disruptions to the global economy. Technology has allowed a thorough way for governments to track potential infection cases, trace their close contacts, and quarantine affected individuals to stop the virus from spreading in the community, according to the report.

New Zealand, Thailand Report Zero New Coronavirus Cases
New Zealand and Thailand each reported no new coronavirus cases Wednesday as the governments prepared to further ease lockdown restrictions.

Indonesia Gambles on Reopening Economy
Ongoing outbreaks pose potential for disaster  Facing a severe economic dilemma from rising poverty and unemployment and stalled infrastructure projects, the Indonesian government, over the objection of epidemiologists on a second wave before the first one is finished, plans to open up business and social activity starting June 1 despite the rising number of positive cases and deaths from Covid-19.

Coronavirus: India targets small businesses in economic bailout
India has announced plans to spur small and medium businesses as part of a $264bn (£216bn) economic package.

Hong Kong restaurants back in busy mode as social distancing measures are eased, but recovery still a long way off
Restaurants do roaring business over the weekend as malls and food and beverage operators launch Mother’s Day promotions    The worst for the retail sector is over as sentiment is starting to pick up, says Cusson Leung of JPMorgan

China’s coronavirus aid is not motivated by a desire for global leadership
Contrary to what some others may think, Beijing does not seek to replace Western powers or become a ‘global saviour’ in the fight against Covid-19   Humanitarian aid can be China’s contribution to the world, as befits its capability and in accordance with its foreign policy principle of non-interference

China’s Disinformation Campaign Targets Virus, Researcher Says
An army of bot accounts linked to an alleged Chinese government-backed propaganda campaign is spreading disinformation on social media about coronavirus and other topics, including an exiled businessman, according to a London-based researcher.

Coronavirus: China’s new army of tough-talking diplomats
In the short term, the research, testing, development and distribution of a Covid-19 vaccine will require international co-operation including China. In the longer term, most analysts expect some kind of global collective action to repair the world economy. But the chances of that are looking slim. Bonnie Glaser, director of the China Power Project at the Centre for Strategic and International Studies in Washington, said: “If the US and China did not set aside their differences in order to work together to fight a global pandemic, it is hard to believe they are going to find a way to work together to bolster their economies.” Some strategists argue that while the West will have to increase its strategic independence from China after the pandemic, it will also have to find a new framework for co-operation.

China’s Oz Beef Ban Part of a Larger Assault on Rivals
Dispute plays into Washington’s eclipse against Beijing

China’s meat import suspension a reminder of Beijing’s ability to inflict economic pain
The issue had nothing to do with China’s increasingly sour relationship with Australia, he insisted. The Chinese Government was merely “safeguarding the health and safety of Chinese consumers”.But this assertion ignores history and stretches credulity.   The reality is Beijing has a long track record of economic coercion, and the pattern is strikingly similar across the globe: countries caught in a dispute with Beijing suddenly find their flagship industries hit with obscure regulatory roadblocks.

China has alternatives for beef, barley imports but trade dispute could ‘kill Australian farmers’
China is set to impose a devastating 80 per cent tariffs on Australia’s barley imports, while it has also banned imports from four major Australian meat processing plants     Chinese importers are looking for alternatives in Canada, Brazil, Germany, Denmark, and Russia, although they are not as worried about the short term impact

Focus on Covid-19 battle, France tells China after Taiwan warning
France dismissed Chinese warnings on Wednesday about selling arms to self-ruled Taiwan, saying it was implementing existing deals and that Beijing should focus on battling the Covid-19 pandemic.

Coronavirus: China’s navy gets back on training track with extensive drills
PLA to make up for lost time with an 11-week exercise off the country’s northern coast    The Shandong aircraft carrier expected to be put through its paces as pandemic eases

US tactics to deny China a role in the Arctic are welcomed by no one but itself
Washington’s mischaracterisation of Beijing’s intentions is the basis for moves to increase US’ presence in Arctic and lean on allies to undermine China’s    However, public opinion in the region largely welcomes Chinese participation in scientific endeavours and infrastructure development

Coronavirus: German companies plan charter flight to send workers back to China
Talks are under way for ‘a fast-track procedure’ allowing employees of German companies to re-enter China on the special flight, says a business leader   In March, China cut most flights in and out the country, and imposed a ban on most foreigners, even those with valid residence visas

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