China Press Review – May 7, 2020

Press review

How Chinese consumers are changing shopping habits in response to COVID-19
An analysis of point-of-sale data for over 100 million shoppers shows four key trends that are likely to persist postcrisis.   China is ahead of the curve in its recovery from the recent COVID-19 outbreak, with many provinces slowly returning to normal levels of activity. Factories are restarting production and consumers are beginning to spend again. However, the crisis has had a dramatic and lingering impact on the nation’s shopping habits, with implications for brands in China and globally. McKinsey worked with MIYA, a leading mobile payment solutions provider, to analyze point-of-sale (POS) data from 31,000 stores and 500 million+ transactions, covering 150+ cities, including Wuhan and Hubei, and 100 million+ shoppers. The data reveals four key shifts that are persisting even as the peak impact of the virus abates.

Coronavirus: China’s exports in surprise jump in April, but imports tumble
China’s exports grew by 3.5 per cent in April and imports fell by 14.2 per cent, presenting a mixed picture of the economic recovery    Demand shock from coronavirus containment efforts around the world did not appear to place great strain on world’s second largest economy in April

Coronavirus: China’s medical supply boom, lockdown backlog sparked surprise April exports rise
A boom in overseas sales of medical supplies, including masks and coronavirus testing kits, are likely to have helped spur a surprise 3.5 per cent rise in exports     But analysts warned the return to growth will be short-lived, with global demand set to collapse, amid an expected recession this year

Fast-forward China: How COVID-19 is accelerating five key trends shaping the Chinese economy
Events expected to play out in the Chinese economy over the next several years have been compressed into a short few months.

US-China trade chiefs to have call as Donald Trump and coronavirus threaten phase one deal
Vice-Premier Liu He and US Trade Representative Robert Lighthizer will hold a call as early as next week, Bloomberg reported     First call since phase one trade deal was signed in January comes after US President Donald Trump threatened to scrap the accord

Escalation in US-China tensions is ‘the last thing’ anyone needs, JPMorgan says
With the world already reeling from the economic impact of the coronavirus pandemic, a reignition in U.S.-China trade tensions would be the “the last thing” anyone needs, according to JPMorgan Asset Management’s Alexander Treves.  Those comments came on the back of data released Thursday which showed China’s exports besting expectations in April, a statistic Treves told CNBC’s “Street Signs” was “very, very surprising.” The rhetoric between Washington and Beijing has been dialed up in recent days, with U.S. Secretary of State Mike Pompeo going as far as to say that there was “a significant amount of evidence” suggesting that the virus emerged from a state laboratory in Wuhan, where the earliest cases were reported.

podcast : China needs a growth target to guide its stimulus measures: Citi
China should still set a growth target this year for the authorities to design a “sensible” stimulus package, says Liu Li-gang, Citigroup’s chief economist for China, who adds that the country’s unemployment rate risks exceeding 10% without aggressive fiscal stimulus.

China’s economy peeps through Covid-19 rubble
Boost for exports but imports and services sector bomb as virus pandemic ravages global growth

US Commerce Department said to be drafting rule to let Huawei, US firms work together on 5G standards
Engineers in some US technology companies stopped engaging with Huawei to develop standards after the Commerce Department blacklisted the company last year     In standards setting meetings, the Chinese company gained a stronger voice as US engineers sat back in silence, industry and government officials say

South Korea to make 5G and AI centrepieces of economy’s ‘New Deal’ in post-coronavirus era
The initiative by newly re-elected South Korean President Moon Jae-in is expected to involve large-scale projects to boost jobs and innovation   Plans include creating a fund to foster AI development, build sites for robot testing and support the roll-out of a nationwide 5G network

Huawei’s HiSilicon division enters the top 10 global semiconductor ranking
Huawei’s HiSilicon chips are getting increasingly popular these days and it shows. According to the most recent market analysis, the fabless chipmaker entered the top 10 global semiconductor rankings and it’s actually the first Chinese company ever to do so.

China, BRI Countries Confront Covid-19
The ties that bind are likely to get more binding The global economic fallout of Covid-19 can be expected to strengthen China’s ties to countries involved in Beijing’s Belt and Road Initiative, leaving some debt-strapped economies in worse shape and increasing their need for Chinese bailouts – a “make-or-break for the increasing globalization of the BRI,” said Andre Wheeler, chief executive officer of Asia Pacific Connex, an Australian consulting firm focusing on business in the Asia Pacific.   The Belt and Road Initiative (BRI) is Chinese President Xi Jinping’s ambitious project to link China with regions including Africa, Southeast Asia, Central Asia and Europe through infrastructure projects like railway and ports.  Indeed, according to Yigal Chazan, the head of content at Alaco, a UK-based risk consultancy, some heavily-indebted BRI countries including Central Asian countries like Kyrgyzstan and Tajikistan, may be forced to call on Beijing to renegotiate loan repayments.

Wall Street is too optimistic as economies start reopening, Stephen Roach warns
Stephen Roach warns the market is misjudging the coronavirus’ impact on economy
One of the world’s leading authorities on Asia is worried Wall Street is miscalculating China’s efforts to reopen its economy.  While it’s going relatively smoothly on the supply side, Yale University senior fellow Stephen Roach warns the demand side is struggling, and that’s a bad sign for the U.S. economy as it begins reopening. “Chinese consumers remain fearful of going out in public, shopping, going to movies and enjoying activities that put them in close proximity with their neighbors,” the former Morgan Stanley Asia chairman told CNBC’s “Trading Nation” on Wednesday. “Consumer behavior is not all that dissimilar in populations subjected to an unprecedented shock in their health security.”

As the coronavirus crisis ravages the US, what accounts for its stock market outperforming the rest of the world?
The US stock market is dominated by tech firms that have benefited from trends such as remote working and online shopping    Meanwhile, the economic prospects for other regions are even worse

Hong Kong stocks fall on weak confidence, as US-China tension and coronavirus toll weigh on sentiment
HKEX falls 2.8 per cent as it reports a 13 per cent decline in net profit    China stocks slip as well, as trade friction between world’s biggest economies flare up again

Tesla abruptly suspends car production at Shanghai Gigafactory
The reason for the abrupt halt was because of component shortages, according to a report by Chinese technology news site 36kr    Tesla, however, has indicated that it was just conducting normal maintenance work at the factory

Behind Tesla’s stunning suit against Xpeng
Court documents show that Tesla is asking for an awful lot of Xpeng’s information

China car sales set to rise 0.9 per cent to 2.0 million in April, industry body predicts
Car sales are set to rise 0.9 per cent year-on-year to 2.0 million in April, according to the China Association of Automobile Manufacturers  Sales between January and April in China are expected to fall 32.1 per cent year-on-year to 5.67 million

Didi boss Jean Liu says core business profitable, as China’s ride-hailing market recovers from Covid-19
Didi’s ride volume in China has reached 60 to 70 per cent of pre-coronavirus levels and is five times its February low, president Jean Liu Qing says   The global ride-hailing industry has been hit by lockdowns and travel restrictions since the start of the pandemic, but China’s market may be recovering

Trade Protectionism Won’t Help Fight COVID-19
Germany, the US, and Switzerland supply 35 percent of medical products sold worldwide.   The World Trade Organization (WTO) reports that tariffs remain stubbornly high on protective medical gear.   The untold story of China is that it depends on Germany and the United States for nearly 40% of its medical products

Coronavirus: China’s ‘sober-minded’ officials urged to focus on domestic recovery, not international disputes
Outspoken former Chongqing mayor Huang Qifan says China should ‘find new opportunities from the crisis’ to aid its domestic recovery    Issues over the origin of the virus, compensation claims by the United States and decoupling worries have all appeared in the wake of the outbreak

US coronavirus study says suppressing body’s initial immune response may help in fight against Covid-19
‘A short regimen of a proper immunosuppressant drug applied early in the disease process may improve a patient’s outcome,’ paper’s co-author says    But immunologist says move would be ‘very dangerous because you’re crippling your body’s ability’ to clear the infection

China backs WHO investigating origin of Covid-19, hits out at US ‘politicising issue’
Global health body says it is talking to Beijing about another mission to the country to look into potential animal source of outbreak   Foreign ministry accuses Washington of ‘untruthful and insincere remarks’ and rejects inquiry with ‘presumption of guilt’

Coronavirus may have jumped to humans as early as October, study says
Researchers looked at 7,000 genome sequence assemblies collected from around the world to determine their most recent common ancestor   Results suggest the global health crisis may have started at some point between October 6 and December 11

Corona beer’s brewer Budweiser APAC posts net loss of US$41 million in first quarter as coronavirus forced bars, nightclubs, to close
The regional arm of Anheuser-Busch InBev Group, which owns brands such as Corona and Stella Artois, said its quarterly revenue dropped 39 per cent to US$956 million in the first three months Revenue from the Chinese market declined 45.4 per cent after restaurants and bars were abruptly closed in January and February to contain the spread of Covid-19

China’s coronavirus soft-power push will fail if it cannot defend freedoms – at home and abroad
The backlash against the popular Wuhan Diary shows that the Chinese government struggles to allow people the freedom to express basic human emotions    On a global scale, how China deals with Africa’s debt could determine how it is viewed

New Zealand ‘halfway down Everest’ as Ardern plans big easing of Covid lockdown
PM says bars, hairdressers and domestic travel could be opened up next week along with gatherings of up to 100 people

New Zealand’s winning virus tactics spell election risks for Ardern
Popular PM vulnerable to attacks over lockdown’s economic damage

China, Australia decoupling labelled ‘zombie economic idea’ amid coronavirus fallout
Debate about Australia’s over-dependence on China has ramped up recently, triggered by interruption of supply chains during China’s January Covid-19 shutdowns     Report by Australia-China Relations Institute at the University of Technology Sydney questions the need for Australia to decouple from its main trade partner

COVID-19 batters Bangladesh’s already struggling economy
Author: Fahmida Khatun, Centre for Policy DialogueThe novel coronavirus (COVID-19) hit Bangladesh at a point when its economy was already under stress. Except for remittance income, all major economic indicators were underperforming during the first few months of the 2020 fiscal year (FY2020).

Reopening India: Implications for economic activity and workers
In the past six weeks, India’s economy has functioned at 49 to 57 percent of its full activity level, by our estimates. That economic cost, though unavoidable in the early stages of a lockdown, might not be sustainable in the longer term. It is becoming increasingly clear that COVID-19 will not disappear immediately; the economy will need to be managed alongside persistent infection risks, possibly for a prolonged period. After reopening, some countries have needed to resume lockdowns in response to rising infection rates, and India may be no exception.

State-run China Daily newspaper censors opinion article by European Union ambassadors
The US has been putting pressure on Beijing to reveal the origin of the virus      The top Chinese diplomat overseeing operations at the World Health Organisation rejects the idea of arranging an international investigation mission to Wuhan

Coronavirus: US-China rivalry hampering global efforts to fight Covid-19, EU ambassador to China says
Tensions between Washington and Beijing ‘not conductive to the cooperative spirit we need today’, Nicolas Chapuis says    But EU, China working hard to reschedule a bilateral summit – on hold since February – ahead of a planned leaders’ meeting in September, envoy says

Airfares could rise by 50 per cent if social distancing leads to empty middle seats
Airlines could increase fares by 54 per cent in Asia-Pacific if flight capacity is capped under social distancing rules     Talks between governments and aviation bodies are under way to see what standardised rules could be adopted to protect public health in a post-Covid-19 era

Viral Youth Day Video Gets Lukewarm Reception Among Young Chinese
Many say the campaign is high on style and low on substance, and does not faithfully represent the young generation.

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