China Press Review – May 4, 2020

Press review

The coronavirus won’t kill globalisation, but might just change global business for the better
Look out for changes to industrial policies as governments realise the need to prioritise sectors such as medical supplies, to meet domestic needs in time of crisis   While companies will push to diversify supply chains and pay more attention to ESG factors, their preference for globalisation – and the profits it brings – won’t change

Post-coronavirus, expect manufacturing to make a mass exodus from China
Firms across the world are rethinking their supply chains as they discover that links to the world’s factory are more fragile than they bargained for     Drugs are a particularly sensitive area: no nation wants to depend on supplies from a potential adversary that can use delivery as a strategic weapon

China’s economic bounceback can be a model for world economies
While West unleashes massive stimulus, Beijing looks to structural policies  China’s rebound, however, is still uncertain.      Another issue is China’s strong state. By making it possible to enforce a drastic lockdown and strict quarantine measures, government power helped China immeasurably in quickly bringing the pandemic under control within its borders. As a result, the country experienced fewer illnesses and deaths than countries with lower populations including the U.S., Italy and Spain.

Why China Could Lead the Global Economic Recovery After COVID-19
With the global economy in turmoil due to the COVID-19 coronavirus pandemic, China is in a unique position to lead the subsequent recovery.    Like other countries hit by COVID-19, China’s economy suffered greatly over the course of the outbreak. China’s GDP contracted by 6.8 percent year-on-year during the January-March period, including an enormous 39.2 percent drop in Hubei province, the epicenter of the outbreak.     Now, however, China has largely gotten COVID-19 under control and the economy has mostly re-opened, at a time when much of the rest of the world is facing the worst of the virus. While many governments are in crisis management, the Chinese government is now looking ahead towards putting the economy back on track for the rest of 2020 and beyond.  Due to the size of China’s economy, its success will be instrumental in revitalizing the global economy as a whole – and with the virus under control and ambitious economic policies set to be released, China appears well-positioned to accomplish just that.

Europe is worried about Chinese corporate takeovers tied to Covid-19
As Europe enters a recession induced by the spread of the novel coronavirus, officials are bracing for another possible wave of takeovers and acquisitions by Chinese companies, much like they saw after the 2008 financial crisis.

Coronavirus: China exports outlook dims as US and EU economies tank in first quarter of 2020
The American economy contracted by 4.8 per cent in the first quarter of the year, while the EU economy shrank by 2.7 per cent   Growth in China’s second and third largest export markets expected to fall at faster rate in second quarter adding to Beijing’s economic woes

China’s ‘reopening’ has been rocky, and China Beige Book thinks the Beijing party line may start to change
Nearly all executives surveyed are worried about a flare-up of the coronavirus in the next few months

China Spends $600 Billion To Trump America’s Economy
Ten years from now, when economists mull the exact moment the U.S. ceded the future to China this week’s events are sure to top the list of time-stamp candidates.    This was the week, after all, when Chinese President Xi Jinping tossed another 4 trillion yuan, or $565 billion, at an economy taking devastating coronavirus blows. The 4 trillion-yuan figure will sound familiar to students of 2008 and 2009, back when Beijing threw exactly that amount at plunging demand amid the “Lehman stock.

Trump says he will kill phase one trade deal if China US$200 billion spending promise falls short
Slowdown in Chinese economy due to coronavirus pandemic may have affected Beijing’s ability to keep the deal but US president says ‘they have to buy’      Also suggests China let the virus spread beyond its borders intentionally, while staying away from Wuhan lab theory

Big Tech’s earnings triumph belies the economic pain ahead
Apple, Amazon, Facebook, Google and Microsoft offered investors no clear guidance of what lies ahead amid the Covid-19 pandemic   The tech giants proved, however, that they remain essential services for millions of people and they have strong enough financial footing

Investors have not seen the back of the Covid-19 market crash, if history is any guide
The rebound in stocks may seem reassuring, but a look at the biggest bear markets of the past century warns of the likelihood of a ‘post-crash crash’. Given the extent of the contractions all round, it may be prudent to hold out for another market fall

Goldman Sachs outlines ‘useful lessons’ from China’s reopening following the coronavirus outbreak
The coronavirus was first discovered in the Chinese city of Wuhan before spreading to the rest of the country and all over the world.   That makes China the first country to be affected by the pandemic — and it appeared to be among the first to contain the virus spread, as far as official data showed.   China started lifting lockdown measures on Wuhan last month when new cases were still surging in many countries, but its experience so far showed that a full economic recovery

Global smartphone market suffers worst contraction in history amid Covid-19 crisis
Total shipments of smartphones fell at the fastest rate on record in the first quarter  Analysts expects consumer demand to remain suppressed through the rest of the year because of the global economic downturn

China’s young spenders say #ditchyourstuff as economy sputters
There are some signs that a similar trend will take hold in China, where some upscale malls are starting to get busy, although luxury firm Kering SA – which owns Gucci, Balenciaga and other fashion brands – has said it is hard to predict how or when sales in China might come back.     A recent McKinsey & Co survey showed that between 20% and 30% of respondents in China said they would continue to be cautious, either consuming slightly less or, in a few cases, a lot less.

China’s Vanishing Trade Surplus
As part of China’s rebalancing of demand toward domestic consumption, even China’s famously high household savings rate — at 23 percent of GDP, 15 percentage points higher than the global average — seems likely to trend down. One main reason for China’s high rate of household savings has been that China has only a sketchy and poorly financed system for pensions and health care for the elderly. Add to this the reality that one unintended consequence of China’s one-child policy (only abandoned in 2015) is that the elderly will not be able to rely on younger generations for support. After all, the one-child policy means that four grandparents will have, at most, one grandchild between them. But China’s population is aging, and the generation of older people who have been saving at a breakneck pace will be shifting toward more spending as retirees. China’s working- age population peaked about five years ago, and the total population seems likely to peak in the next few years. Births in China have been falling; in fact, the 14.6 million babies born in 2019 was the lowest number since 1961.

Electric cars take the spotlight in China’s post-coronavirus stimulus plans
As China tries to recover from the impact of the coronavirus, making sure its plans for electric vehicles stay on track is one priority.   While consumer confidence may take time to recover, government and commercial purchases are expected to drive the electric vehicle market in China this year as well.   China’s electric vehicle start-ups have pressed ahead with getting production back online and launching new products. Some have also reported growing sales.

China’s Robotics Spending to Reach $121 Billion in 2024
Spending on robots, drones and related services in China is likely to exceed $121 billion in 2024, accounting for 44% of the global total, a new report predicts, as the past three months have provided a golden opportunity to show their usefulness in the fight against the coronavirus pandemic.

‘Behaviour is even worse’: China steps up protection of intellectual property in courts, but foreign firms still wary
Rulings in favour of Michael Jordan and New Balance seen as encouraging sign, but many companies are still limiting involvement in Chinese market    Economic pressure from coronavirus pandemic could bring more infringements, according to lawyer

Corporate debt in China, Singapore and South Korea is rising fast as coronavirus hits revenue
Companies in those countries had already been rapidly chalking up debt in the past few years, said the report by ANZ Research.   But the coronavirus situation has hurt revenues and in turn, affected their ability to service their debts.    The energy sectors in Singapore and South Korea are of concern, while in China, the real estate sector is “over-extended.”

Three Ways the COVID-19 Crisis has Affected Corporate Travel and Entertainment Expense Claims
In a few short weeks, COVID-19, also known as the coronavirus, has permeated every aspect of our lives and completely changed how (and which) businesses operate. Business travel and entertainment have come to a standstill. Many companies have switched almost entirely to working from home to enforce social distancing or comply with mandatory shelter-in-place mandates. As the economic landscape becomes increasingly uncertain, many companies have been forced to take difficult actions to cut spending as they endure a severe downturn of unknown length.    As the crisis progressed, the scale and nature of expense claims have changed drastically. As expected, trip cancellations and work-from-home expenses increased dramatically, while business travel expenses dropped.

Coronavirus lockdowns show real-time logistics data is key to make-or-break business contingency decisions, say executives
Its proven efficiency during the Covid-19 pandemic may speed up the digitalisation of logistics processes across industries   The ‘ability to track and trace allows us to take counter measures immediately to mitigate the impact’, says a director at chemicals manufacturer Covestro

Why US-China decoupling is a dangerous mistake and tantamount to self-harm
The World Bank expects Covid-19 to impact commodities like oil and platinum, and even the Opec cartel itself   Its report shows how central China is to commodity trade, and why the US would inflict more harm on itself by decoupling

Coronavirus: Hong Kong’s economy slumps 8.9 per cent in worst contraction on record
Finance chief says city is deep in recession but if people work and unite, the situation will stabilize   Preliminary figure is worse than in the third quarter of 1998 when GDP tumbled 8.3 per cent, as the city reeled from effects of Asian financial crisis

Coronavirus pushes Hong Kong economy into deepest contraction on record in first quarter
Hong Kong’s economy recorded in the first quarter its deepest annual contraction since at least 1974, as the coronavirus pandemic dealt a heavy blow to business activity, already in decline following months of anti-government protest last year.

How bad is COVID-19’s impact on Asian developing economies?
In its April World Economic Outlook the International Monetary Fund (IMF) predicts a baseline case of negative 3 per cent global ‘growth’ in 2020, rebounding to 5.8 per cent in 2021. But it warns that things could get a lot worse.

How can the economies of emerging Asia respond to COVID-19?
The world now faces an inflection point. Governments, policy makers, and the private sector will be judged by their response to this moment of crisis. The informal, cash-based economies of emerging Asia and the unique vulnerabilities of its populations make resolute action more essential now than ever. The well-being of millions of people and of the societies where they live is at stake.

The dangerous disconnect between bullish stock markets and a weak global economy
Central bank liquidity injections are providing huge support for markets. But do these measures show our ability to control the ups and downs of the global economy, or are we just storing up trouble, in the form of a mega correction, for later on?

Hang Seng Index takes hard tumble on US-China tensions over coronavirus, trade
Casinos, new economy stocks hammered     Expect Hong Kong stocks to be punched about until US elections are over in November, analyst Kenny Wen says

How Global Luxury Can Reach Homebound Chinese Shoppers
With Chinese spend turning inwards and a reduction in outbound travel, brands are challenged to connect digitally with shoppers in China. Digital agency ASAP+ works with clients like leading sneaker marketplace GOAT to strengthen their China strategy.   “Under the current COVID-19 climate, brands need to adapt to reach the shoppers at home who would otherwise be overseas.”

Donald Trump threatens tariffs over coronavirus as US and Beijing trade laboratory accusations
Asked about claim that US could opt to default on debt to China, Trump says he could put on tariffs   Trump and head of US intelligence suggest Wuhan lab warrants investigation, while Chinese state newspaper asks US to explain bird flu experiment

Trump administration mulling how to punish China over coronavirus pandemic
US president has shown increasing frustration with Beijing as American economy slumps amid outbreak, hurting his re-election chances   A range of retaliatory measures are being discussed but efforts are still in early stages, US official says

Trumplomacy: What’s behind new US strategy on China?
Tensions between the US and China are longstanding but the pandemic and a looming presidential election have amplified the rivalry, and this week the war of words hit a new peak. What’s the US strategy?

100,000 dead Americans: Trump revises US coronavirus toll forecast
Only two weeks ago, the president was predicting 50,000 or 60,000 Americans might die. But on Sunday, he acknowledged the parameters had changed     White House coronavirus coordinator Dr Deborah Birx said the toll could rise as high as nearly a quarter-million deaths

Coronavirus: in a pop-up lab in Beijing, this firm is trying to clean up China’s murky face mask industry
Smart Air launched as an air purifier provider and tested masks for the notorious Beijing smog, but the Covid-19 pandemic changed that    After coronavirus hit, the firm opened a makeshift lab in Beijing to test the 2020’s hottest commodity: face masks

US intelligence says coronavirus was not man-made but theory it leaked from Wuhan lab needs more investigation
Office of the Director of National Intelligence says it has not ruled on theory virus leaked from lab   Donald Trump is making China’s handling of outbreak a major issue in his re-election campaign

Amazon says it risks loss on spending rise for pandemic
The online retail giant projected its operating income to range from US$1.5 billion to a loss of US$1.5 billion in the second quarter  Its coronavirus efforts include increased spending on personal protective equipment as well as enhanced cleaning of warehouses and stores

China Business Digest: Gilead’s Covid-19 Drug Gets Temporary Approval; Global Smartphone Shipments Tumble
China exported 71.2 billion yuan ($10.1 billion) worth of medical supplies in March and April, according to the General Administration of Customs (link in Chinese). That included 27.8 billion face masks, 130 million protective suits and 73.4 million Covid-19 test kits.

Coronavirus vaccine: WHO to issue guidelines on proposed use of human challenge trials
Advocates say tests in which volunteers are deliberately infected with the pathogen that causes Covid-19 will help to speed up the development of a vaccine for it   But some scientists are concerned about the ethical and medical implications of using such methods

China’s race for a Covid-19 vaccine hits a hurdle – no outbreak at home
Various Chinese pharma firms are working on a way to inoculate against the new coronavirus but are struggling to test the potential vaccines under real conditions as the epidemic wanes at home   Looking overseas is one option but brings its own complications

How AI Is Speeding Up the Search for a COVID-19 Cure
An artificial intelligence expert explains how the much-hyped technology is being used to identify promising drug molecules.     The powerful computing capabilities offered by AI can help us significantly broaden our search for potential cures while speeding up the process

Europe leads push for global coronavirus response as China and US trade accusations
A virtual summit of 40 countries hosted by the European Union hopes to raise US$8.2bn to develop vaccines and treatments and ensure they are distributed equally    China will join Monday’s event despite previous focus on blame game with Washington but the US remains reluctant to join coordinated effort

As coronavirus tsunami leaves China, wave of infections may be far from over
China seems to be over the worst while other countries are at different stages, creating challenges for managing lockdowns and reopening     But health experts differ on what point the pandemic is at, with one saying it’s still early days and ‘we don’t really know what the full scope will be’

If you think you have it bad amid the coronavirus, millions of migrant workers have it far worse
Even at the best of times, the world’s 164 million international migrant workers tend to get a raw deal. In a time of coronavirus, many have lost their jobs and are unable to send home remittances that their families and countries rely on

China coronavirus chaos: Beijing enforces new lockdown measures amid fears of second wave
BEIJING has enforced strict new regulations for “promoting civilised behaviour” indicating the nationwide lockdown has only been partially relaxed, amid fears of a second peak of the virus in the country.

Coronavirus: Tokyo to extent state of emergency
A second wave of infections is feared. Hospitals are operating beyond their capacity. For experts, systematic testing is needed to contain the outbreak. In Tokyo, only 11,000 people have been tested. Unemployment is rising, but the worst is yet to come.

Ministers defend Singapore’s handling of Covid-19 outbreak as cases surge past 18,000
Pressed for answers on the spate of infections among migrant workers, ministers said authorities had responded ‘squarely and quickly’ once the situation became apparent   The government has promised a comprehensive review on its approach to the outbreak once the crisis is over

Coronavirus: Hong Kong to relax rules on public gatherings
Number of people per group to be raised to eight     Move comes as other social-distancing rules are loosened and expert says he believes some businesses could reopen soon

Coronavirus: China’s northeast border region accused of mishandling clusters and putting recovery at risk
Cabinet orders Heilongjiang medical teams to step up disease prevention, testing and treatment Team sent to help officials control epicentre of mainland’s second wave of infections

Coronavirus: EU rebuffed attempt to water down report critical of China, diplomat says
Josep Borrell admits Chinese pressure over a report criticising the country’s role in promoting disinformation about the pandemic, but says it was unsuccessful  Several members of the European Parliament say answers from the bloc’s top diplomat fail to address their concerns

Podcast : Coronavirus Politics: Where Does EU Fit in U.S.-China Tensions?
EU Chamber of Commerce President Joerg Wuttke discusses how the coronavirus pandemic impacts international relations with China and the future of global trade. He speaks on “Bloomberg Surveillance.”

China’s coronavirus blues clouds hopes for Labour Day holiday spending spree
The government has extended the annual break to give an extra shot in the arm for the economy after months of lockdowns   But with still more uncertainty ahead, the country’s consumers might not be in the mood to splurge, observers say

Chinese virologist at centre of ‘coronavirus came from a laboratory’ claim denies defecting
‘No matter how difficult things are, there will not be a ‘defector’ situation,’ Shi Zhengli says on WeChat   Dismissal comes amid online rumours she and her family were seeking refuge at US embassy in Paris

How will COVID-19 affect Australia-China business relations?
Cautious optimism for Australia-China business relations after COVID-19

Coronavirus: Australia eyes early lifting of virus restrictions
Health officials say the nation has “pretty convincingly” flattened its virus spread after weeks of strict social restrictions. Officials were due to review freedoms on 11 May but this will now be brought forward to 8 May. Mr Morrison said Australians had “earned an early mark”.  The call came as several states allow their residents new freedoms on Friday.  The Northern Territory became the first to lift major restrictions, re-opening public parks and pools and removing attendance limits for gatherings from midday.

China and Australia: how a war of words over coronavirus turned to threats of a trade war
Canberra’s call for an inquiry into the origins of Covid-19 sparked talk of boycotts from Beijing – but any such move could be harmful to both countries

Coronavirus disrupts China’s diplomatic agenda with global meetings in doubt
Will Chinese President Xi Jinping’s year of face-to-face talks with world leaders go as planned? Pandemic has also forced Beijing on to the defensive amid rising criticism of its handling of the outbreak

Covid-19 trouble brewing behind EU-China ties
EU criticism is mounting over China’s perceived opportunism and propaganda about the global virus crisis

Coronavirus most likely to be passed on in early stages of illness or before symptoms appear, Taiwan study says
Those who came into contact with confirmed Covid-19 cases just before or soon after symptoms appeared were most likely to become infected      Researchers say findings highlight the importance of early contact tracing and tracking as well as social distancing

The geopolitical contours of a post-COVID-19 world
While the impact of the COVID-19 pandemic on the global economy is more dramatic than any other shock in recent history, the consequences of the virus for the geopolitical order could be even more consequential. A radical shift in the global political economy may be imminent in the post-COVID-19 world.

Coronavirus: China gives green light to more domestic travel by unifying its chaotic QR health codes
Codes showing green, yellow or red status determine a person’s right to travel, based on exposure to the virus    Provinces had been operating their own codes and sometimes refusing to recognise those from other authorities

Chinese journalist jailed for 15 years for attacking Communist Party
Chen Jieren, who once worked for party mouthpiece People’s Daily, found guilty of publishing false information on blogs and social media ‘under the guise of providing legal advice’, court says  Chinese Human Rights Defenders says conviction was ‘apparently to punish him for his political speech’

If China wants to use the coronavirus crisis to burnish its global image, it must rethink its Hong Kong strategy
To be seen as a responsible international actor, China must comply with global agreements and develop the rule of law at home   Through its actions in Hong Kong, Beijing is showing the world how thin China’s commitment to the rule of law is

Xi Sees Domestic Enemies Behind Hong Kong Protests
Bo Xilai, Zhou Yongkang directing protests from jail? Chinese General Secretary Xi Jinping may be seeing the specter of his domestic political enemies in the widespread unrest that has gripped Hong Kong for months, according to China watchers. Rather than acknowledging that Hong Kong’s angry residents themselves resent the mainland’s heavy-handed rule, Xi and his mandarins in Beijing appear to believe that disgraced and imprisoned former rival Bo Xilai and others may play some role in fomenting the trouble.

Hong Kong’s business elite are cashing in their luxury villas at a loss as they brace for the city’s worst economic recession
Many company owners and executives are looking to free up much-needed cash to keep their businesses going as pandemic ravages the economy, property agents say
The city’s economy will shrink by 4 to 7 per cent this year, Financial Secretary Paul Chan Mo-po warned this week

Coronavirus journal Wuhan Diary continues to upset Chinese nationalists
At least two academics have been put under investigation for supporting Fang Fang’s work, an English-language version of which is set to be published next month  Backlash comes despite Amazon saying the work praised the ‘courage, resilience and perseverance of Wuhan’s 9 million residents’

A setback to the ‘China Dream’:
 The pandemic has aggravated China’s economic troubles and its social challenges  Critics say, however, that that’s not enough to stave off the Covid-19 crisis as much of the dole has gone to State-owned enterprises. The challenges brought up by Covid-19 are testing the rise of China, and more specifically the rise of the Communist party … the practice of reporting “mass incidents” – Chinese-speak for anti-government protests and riots – has been discontinued, but it is expected that they will rise in the months to come. How much of a setback the pandemic’s effects prove to be for the ‘the ‘China Dream’ and the country’s rise to global power, and whether Xi Jinping will successfully overcome them, remains to be seen.

The surprisingly vital role sister cities play in Chinese diplomacy
Still, the loss of a major cultural link between two far-away countries that are now in a diplomatic standoff is a shame, according to Schwaag Serger. Without cultural interactions, “we leave it to politicians to explain how other countries are working.”     “It sounds cliché, but I really think you can’t underestimate the importance of understanding each other better, and culture is one of the most important means for understanding others, and therefore it fills a very important function.”

Grief in a Fallen City: On Processing the Trauma of COVID-19
COVID-19 killed over 3,800 people in Wuhan. A local grief counselor discusses what it’s like to help the survivors pick up the pieces.

China’s military budget will still rise despite coronavirus, experts predict
Defence spending could show the effect of economic headwinds but is still expected to increase    PLA’s modernisation and strategic priorities demand spending is maintained even after GDP’s first contraction since records began, observers say

South China Sea neighbours uneasy as Beijing expands enforcement actions
Beijing’s recent expansion of domestic law enforcement tools creates new tension in region    Asean official says 10-member group is watching situation closely

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