China Press Review – May 15, 2020

Press review

Coronavirus ‘could cost global economy $8.8tn’ says ADB
The coronavirus pandemic could cost the global economy between $5.8tn and $8.8tn (£4.7tn-£7.1tn), according to Asian Development Bank (ADB).  That’s more than double last month’s prediction and equates to 6.4%-9.7% of the world’s economic output.

Expect post-coronavirus economic recovery to be slow, bumpy and prone to relapse, in China and everywhere else
As lockdowns ease and economic activities resume for China, to be followed before long by Europe and the US, there is little hope that life will go on as before. The impact of lost jobs and numerous business and personal decisions will ripple out for months to come  The slow opening of Europe and the probably premature opening of the US look like they might come at the same time, in June, leading to a sudden surge in demand, causing a massive relief recovery globally and a booming third quarter. There won’t be enough planes or ships to carry everything. Expect oil prices to jump. This will finally provide a geared tailwind for the Chinese economy.The dominant financial narrative will be recovery and growth as people get back to work. Stock market participants already feel they have looked over the valley and survived.They will ignore what happened in March and price up the surge. The unthinkably monstrous US$10 trillion of stimulus liquidity will slosh round the economy for a while, extending the bull run, even if only a proportion of the pledged funding is printed.

How growth can help Europe’s companies face the coming economic crisis
CEOs can draw on the region’s spirit of innovation to recover revenues, and even grow, after COVID-19. It’ll take some big bets. The great social imperative of the COVID-19 human crisis is the need to both save lives and protect livelihoods. The threat to both has become increasingly clear: too many people are still suffering and dying—though, at this writing, according to the European Union Centre for Disease Prevention and Control, “the initial wave of transmission has passed its peak.”1 For businesses, however, the threat still looms large. The longer doors are shuttered and workers remain locked down, the greater the risk of severe economic distress. The question for business leaders is how to emerge from the crisis with fortitude, recover revenues, and accelerate growth.

Coronavirus: China’s economic recovery path uncertain after mixed industrial production, retail sales data
Industrial production, a measurement of output in China’s manufacturing, mining and utilities sectors, grew by 3.9 per cent from a year earlier in April, reversing a 1.1 per cent contraction in March. As China’s economy comes back to life following the coronavirus lockdowns, debate has intensified over how quickly growth will rebound.China’s latest economic data for April, including the likes of China’s industrial production and retail sales, released on Friday remained mixed, rekindling the debate over the outlook for the recovery.   The debate is often expressed in terms of the shape of the recovery, with a V-shaped recovery describing an economy that rebounds quickly. A U-shaped recovery is deep and more prolonged, while a L-shaped recovery is slower.Industrial production, a measurement of output in China’s manufacturing, mining and utilities sectors, grew by 3.9 per cent from a year earlier in April, reversing a 1.1 per cent contraction in March. Analysts debate V-shaped, U-shaped L-shaped and W-shaped recoveries for the world’s second largest economy

Coronavirus stimulus is needed now, despite the risk to the post-pandemic financial landscape
The Federal Reserve has made a momentous decision to purchase the debt of companies, including the bonds of junk-rated firms. Such aggressive stimulus measures are shoring up asset prices, but storing up trouble for the financial system

Amid coronavirus-driven volatility, three reasons the rennimbi has remained stable
The renminbi is backed by a Chinese economy that is recovering faster than others, an improving current account balance and a central bank not keen on devaluation     However, an escalation of US-China trade tensions could trigger a weakening of the currency

Coronavirus: China’s uneven economic recovery continued in April, as industrial engine returned to growth
In April, China’s industrial output grew by 3.9 per cent, retail sales fell by 7.5 per cent and fixed asset investment fell by 10.3 per cent, suggesting an uneven recovery     Data suggests demand weaknesses remain, while for industrial engine overseas shutdowns will hamper growth before long

Unemployment ticks higher in China as coronavirus shock to economy persists
 “The pressure on employment is rather large,” bureau spokeswoman Liu Aihua told reporters at least three times during Friday’s press conference. That’s according to a CNBC translation of her Mandarin-language remarks.  China’s official urban unemployment rate rose to 6.0% in April, from 5.9% in March, according to figures released Friday by the National Bureau of Statistics. “The pressure from unemployment could be the main reason for stimulus escalation later this year,” Larry Hu, chief China economist at Macquarie, said in a note Friday.

Coronavirus row won’t kill US-China trade deal, even as tensions rise, one of phase one’s top US negotiators says
Kelly Ann Shaw, until recently Larry Kudlow’s deputy at the National Economic Council, said phase one tensions are yet to reach a tipping point     Comments come as pressure piles on the nascent accord from both sides, amid speculation that US President Donald Trump will walk away

podcast audio -Missing in Action: U.S.-China Cooperation on Coronavirus
The coronavirus outbreak has highlighted the many issues in the U.S.-China relationship. Why can’t Washington and Beijing better coordinate a response to the pandemic, replicating their cooperative efforts during the 2008 financial crisis and 2014 Ebola outbreak? Paul Haenle spoke with Evan Feigenbaum, Vice President for Studies at the Carnegie Endowment for International Peace, on the dynamics preventing bilateral cooperation and the implications for a post-coronavirus world.

‘Billions of dollars’: Trump withdraws US pension fund from China investments
Meanwhile, China is mulling actions against US lawmakers who have introduced a legislation in the Senate proposing sanctions against China for its handling of the coronavirus outbreak, according to news reports.

The Great Decoupling
Washington is pressing for a post-pandemic decoupling from China. But the last big economic split brought on two world wars and a depression. What’s in store this time?

Digital divide narrows between Chinese youth in urban and rural areas
This development expands the number of connected users in the world’s biggest internet market    About 93.9 per cent of young Chinese internet users preferred using a smartphone to go online

The COVID-19 recovery will be digital: A plan for the first 90 days
The rapid migration to digital technologies driven by the pandemic will continue into the recovery. Here’s how to accelerate your organization’s digital capabilities to keep pace. By now, most C-suite executives have led their companies to digitize at least some part of their business to protect employees and serve customers facing mobility restrictions as a result of the COVID-19 crisis. As one CEO of a large tech company recently stated, “We are witnessing what will surely be remembered as a historic deployment of remote work and digital access to services across every domain.” Finally, many organizations have shifted to remote-working models almost overnight. A remote-first setup allows companies to mobilize global expertise instantly, organize a project review with 20—or 200—people immediately, and respond to customer inquiries more rapidly by providing everything from product information to sales and after-sales support digitally. In effect, remote ways of working have, at least in part, driven the faster execution drumbeat that we’re all experiencing in our organizations. And this step change in remote adoption is now arguably substantial enough to reconsider current business models.

Zoom suspends Chinese individuals users from hosting meetings due to ‘regulatory demand’
Popular video-conferencing app Zoom has suspended individual users in China from hosting meetings on the platform. One of the company’s Chinese resellers announced the changes earlier this month.  US-based Zoom has become one of the most popular choices for Chinese business professionals working from home to host meetings amid the Covid-19 pandemic. It is also widely used by individuals to host webinars and give online courses. active customers increased by 25% to 387 million in Q1 2020 net revenues for Q1 2020 were 146.2 billion yuan (US$120.6 billion), an increase of 20.7% from Q1 2019, according to its unaudited financial results.’s annual active customer accounts increased by 24.8% to 387.4 million

Coronavirus halts wealth creation for world’s richest, tech to be significant source of fortunes, report says
Outbreak also threatens a sharp correction in global asset markets and increases risk of intensifying rivalries: Wealth-X      Wealth clearly shifted to much of Asia in past decade, driven mainly by China

China unveils financial plan for Hong Kong, Macau to spur tighter embrace of Greater Bay Area master plan
Beijing explore wealth management connect, the first in bay area    Insurers hope to set up services centre in bay area

Greater Bay Area offers opportunity Hong Kong cannot afford to ignore, business leaders tell Post’s China Conference
With China ‘moving faster than anywhere else in the world’, Hongkongers must ask ‘can we afford not to change?’    City well-placed to connect foreign investors keen to do business in Bay Area, creating openings for financial and tech professionals

Chinese airlines may see a U-shaped recovery in air travel, as global carriers slog through 2023 to see the earliest glimpse of hope
Passenger level of global airlines will return to 2019 levels until 2023, IATA said    China passenger traffic may pick up after legislative meetings next week, led by the resumption of business trips, analysts said

Class and the coronavirus: as China’s wealthy cut back on life’s luxuries, the nation’s poorest are in a fight for survival
Migrant workers and the residents of rural areas are bearing the brunt of the employment crisis in China caused by Covid-19     And while many factories in the nation’s industrial heartland have reopened, a slump in global demand for Chinese goods has dimmed hopes of a swift end to their problems

Coronavirus: How ‘overreaction’ made Vietnam a virus success
Despite a long border with China and a population of 97 million people, Vietnam has recorded only just over 300 cases of Covid-19 on its soil and not a single death.

Wuhan Opens Psychiatric Clinic for COVID-19 Survivors
It often takes months for a trauma patient’s mental health symptoms to surface and be recognized, staff say.    The first psychiatric clinic for COVID-19 survivors, as well as people facing mental health issues related to the pandemic, opened Thursday in Wuhan, as the central Chinese city attempts to heal the widespread psychological trauma caused by the infectious disease and a monthslong lockdown.

Are we witnessing the end of the golden age of Chinese diplomacy?
By allowing its diplomats to publicly criticise governments and threaten companies and people with retribution, Beijing has abandoned the diplomatic practices that propelled its rise to a global power    In the long run, this will only drive investment from China and undermine the economic development that underpins the Communist Party’s legitimacy

China should prepare for more vitriol from Donald Trump after threat to sever ties, observers say
President’s comments in interview with Fox News, in which he said US would be US$500 billion better off without China, reflect the escalating tensions between the two nations, university professor says    Beijing should not worry too much about Trump’s words, but be wary they could turn into actions, CASS researcher says

Coronavirus: New Zealand lockdown eased as businesses reopen
New Zealand has eased its coronavirus restrictions after moving to Level 2, described as a “safer new normal”.The country has reported no new cases of the virus in the past three days and thousands of businesses have reopened.  People are allowed to start seeing their friends and families again, with a limit of 10 people.

How New Zealand beat the coronavirus
The isolated island nation enters the post-pandemic future.

Tesla is facing 10 civil lawsuits in China
US electric vehicle maker Tesla is facing at least eight civil lawsuits by Chinese individuals and one possible class-action lawsuit over “disputes in sales contracts,” according to information released recently on the Shanghai city court system. Only five months after delivering its China-made Model 3 vehicles, Tesla has drawn growing criticism that has turned into lawsuits due to lack of transparency, too-often price changes, and alleged deceptive sales pitches.

Car Sales Gloom Likely To Continue, Warns Bosch China
The impact of the Covid-19 pandemic on China’s automobile industry will probably last until the end of the first half, Bosch China’s president Chen Yudong told the company’s annual press meeting Thursday.

China’s stay-at-home economy to thrive post-pandemic: Morgan Stanley
China’s stay-at-home economy will be its “new normal” in a post-pandemic world, where Chinese outbound travel demand may not be back until 2021, says Robin Xing, Morgan Stanley’s chief China economist.

Hitting the road again: How Chinese travelers are thinking about their first trip after COVID-19
The global travel sector has taken a catastrophic hit as a result of the COVID-19 pandemic, which continues to keep most of the world in lockdown, and away from resorts and tourist hotspots. As China’s economy emerges from the stasis engendered by coronavirus containment measures, it is important to understand how long it will take for consumers to regain the confidence to leave their homes for leisure travel. With this in mind, we surveyed 1,600 travelers in eight Chinese cities about their attitudes to leaving home for leisure, as the first wave of a broader COVID-19 Travel Sentiment Survey.

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