Chindia Alert: You’ll be Living in their World Very Soon
aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.
Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.
The POSTs (front webpages) are mainly 'cuttings' from reliable sources, updated continuously.
The PAGEs (see Tabs, above) attempt to make the information more meaningful by putting some structure to the information we have researched and assembled since 2006.
Image copyright PRESS INFORMATION BUREAUImage caption The area has become a hotspot in part because of a road India has built
The armies of the world’s two most populous nations are locked in a tense face-off high in the Himalayas, which has the potential to escalate as they seek to further their strategic goals.
Officials quoted by the Indian media say thousands of Chinese troops have forced their way into the Galwan valley in Ladakh, in the disputed Kashmir region.
Indian leaders and military strategists have clearly been left stunned.
The reports say that in early May, Chinese forces put up tents, dug trenches and moved heavy equipment several kilometres inside what had been regarded by India as its territory. The move came after India built a road several hundred kilometres long connecting to a high-altitude forward air base which it reactivated in 2008.
The message from China appears clear to observers in Delhi – this is not a routine incursion.
“The situation is serious. The Chinese have come into territory which they themselves accepted as part of India. It has completely changed the status quo,” says Ajai Shukla, an Indian military expert who served as a colonel in the army.
China takes a different view, saying it’s India which has changed facts on the ground.
Reports in the Indian media said soldiers from the two sides clashed on at least two occasions in Ladakh. Stand-offs are reported in at least three locations: the Galwan valley; Hot Springs; and Pangong lake to the south.
India and China share a border more than 3,440km (2,100 miles) long and have overlapping territorial claims. Their border patrols often bump into each other, resulting in occasional scuffles but both sides insist no bullet has been fired in four decades.
Their armies – two of the world’s largest – come face to face at many points. The poorly demarcated Line of Actual Control (LAC) separates the two sides. Rivers, lakes and snowcaps mean the line separating soldiers can shift and they often come close to confrontation.
The current military tension is not limited to Ladakh. Soldiers from the two sides are also eyeball-to-eyeball in Naku La, on the border between China and the north-eastern Indian state of Sikkim. Earlier this month they reportedly came to blows.
And there’s a row over a new map put out by Nepal, too, which accuses India of encroaching on its territory by building a road connecting with China.
Why are tensions rising now?
There are several reasons – but competing strategic goals lie at the root, and both sides blame each other.
“The traditionally peaceful Galwan River has now become a hotspot because it is where the LAC is closest to the new road India has built along the Shyok River to Daulet Beg Oldi (DBO) – the most remote and vulnerable area along the LAC in Ladakh,” Mr Shukla says.
India’s decision to ramp up infrastructure seems to have infuriated Beijing.
Image copyright AFPImage caption There have been protests in Nepal against Indi’s new road link
“According to the Chinese military, India is the one which has forced its way into the Galwan valley. So, India is changing the status quo along the LAC – that has angered the Chinese,” says Dr Long Xingchun, president of the Chengdu Institute of World Affairs (CIWA), a think tank.
Michael Kugelman, deputy director of the Asia programme at the Wilson Center, another think tank, says this face-off is not routine. He adds China’s “massive deployment of soldiers is a show of strength”.
The road could boost Delhi’s capability to move men and material rapidly in case of a conflict.
Differences have been growing in the past year over other areas of policy too.
The new federally-administered Ladakh included Aksai Chin, an area India claims but China controls.
Senior leaders of India’s Hindu-nationalist BJP government have also been talking about recapturing Pakistan-administered Kashmir. A strategic road, the Karakoram highway, passes through this area that connects China with its long-term ally Pakistan. Beijing has invested about $60bn (£48bn) in Pakistan’s infrastructure – the so-called China Pakistan Economic corridor (CPEC) – as part of its Belt and Road Initiative and the highway is key to transporting goods to and from the southern Pakistani port of Gwadar. The port gives China a foothold in the Arabian Sea.
In addition, China was unhappy when India initially banned all exports of medical and protective equipment to shore up its stocks soon after the coronavirus pandemic started earlier this year.
How dangerous could this get?
“We routinely see both armies crossing the LAC – it’s fairly common and such incidents are resolved at the local military level. But this time, the build-up is the largest we have ever seen,” says former Indian diplomat P Stobdan, an expert in Ladakh and India-China affairs.
“The stand-off is happening at some strategic areas that are important for India. If Pangong lake is taken, Ladakh can’t be defended. If the Chinese military is allowed to settle in the strategic valley of Shyok, then the Nubra valley and even Siachen can be reached.”
In what seems to be an intelligence failure, India seems to have been caught off guard again. According to Indian media accounts, the country’s soldiers were outnumbered and surrounded when China swiftly diverted men and machines from a military exercise to the border region.
This triggered alarm in Delhi – and India has limited room for manoeuvre. It can either seek to persuade Beijing to withdraw its troops through dialogue or try to remove them by force. Neither is an easy option.
“China is the world’s second-largest military power. Technologically it’s superior to India. Infrastructure on the other side is very advanced. Financially, China can divert its resources to achieve its military goals, whereas the Indian economy has been struggling in recent years, and the coronavirus crisis has worsened the situation,” says Ajai Shukla.
What next?
History holds difficult lessons for India. It suffered a humiliating defeat during the 1962 border conflict with China. India says China occupies 38,000km of its territory. Several rounds of talks in the last three decades have failed to resolve the boundary issues.
China already controls the Aksai Chin area further east of Ladakh and this region, claimed by India, is strategically important for Beijing as it connect its Xinjiang province with western Tibet.
Image copyright GETTY IMAGESImage caption India and China have a long history of border disputes
In 2017 India and China were engaged in a similar stand-off lasting more than two months in Doklam plateau, a tri-junction between India, China and Bhutan.
This time, too, talks are seen as the only way forward – both countries have so much to lose in a military conflict.
“China has no intention to escalate tensions and I think India also doesn’t want a conflict. But the situation depends on both sides. The Indian government should not be guided by the nationalistic media comments,” says Dr Long Xingchun of the CIWA in Chengdu. “Both countries have the ability to solve the dispute through high-level talks.”
Chinese media have given hardly any coverage to the border issue, which is being interpreted as a possible signal that a route to talks will be sought.
Pratyush Rao, associate director for South Asia at Control Risks consultancy, says both sides have “a clear interest in prioritising their economic recovery” and avoiding military escalation.
“It is important to recognise that both sides have a creditable record of maintaining relative peace and stability along their disputed border.”
US chip giant GlobalFoundries confirms it has ceased operations at its only Chinese facility, with industry experts saying the poorly-planned project was doomed to fail
Closure deals blow to China’s plans to move up semiconductor value chain, amid increasingly hostile tech rivalry with the United States
Beijing boasted that the final total investment in the GlobalFoundries plant could be US$10 billion. The plant was intended to produce 300mm wafers, a key material in making chips, but production never started at the 65,000 square metre facility, which was completed mid-2018. Photo: Weibo
US chip giant GlobalFoundries has halted operations at a joint venture factory in China, the company has confirmed, dealing a potential blow to China’s bid to own a bigger slice of the global semiconductor market.
The closure of the firm’s only China facility comes just three years after it announced plans to make chips in the mainland, and comes amid an escalating tech war with the United States.
The winding down, however, has little to do with the fierce superpower rivalry. It comes after two years of speculation as to what was actually happening at the US$100 million facility, which was hailed as “a miracle” by local media when announced to fanfare in 2017, but which never got off the ground.
Nonetheless, the symbolism is rich.
China is struggling in its efforts to boost its domestic chip research and production in a bid to counter US efforts to block it from American technology.
Last week, the US Department of Commerce upped the ante by banning the sale
of Huawei-designed chips produced outside America if they are made using the US software and technology, adding further pressure to the Chinese telecom giant’s global supply chain.
The GlobalFoundries factory, in a hi-tech park in the southwestern city of Chengdu, was one of China’s major foreign-invested semiconductor projects, for which the local government rolled out the red carpet three years ago.
At the time, Chengdu boasted that the final total investment in the plant could be US$10 billion. The plant was intended to produce 300mm wafers, a key material in making chips, but production never started at the 65,000 square metre facility, which was completed mid-2018.
A spokesperson for California-based GlobalFoundries confirmed that the Chengdu plant had stopped operations and that it had offered staff an “employee optimisation plan”, a commonly-used euphemism for lay-offs.
“The plan is being carried out on the basis of open and transparent communications with the employees and they have been offered various options to choose from based on their personal situations,” a company statement read.
A 2018 annual report from the joint venture, in which GlobalFoundries had a stake of 51 per cent with the rest controlled by an investment vehicle of the Chengdu government, showed that the plant had 320 employees.
A company notice sent to employees dated May 14 and seen by the Post said that after mid-June, the company would only pay 70 per cent of Chengdu’s minimum monthly wage, about 1,246 yuan (US$175.38), while negotiating severance packages with staff.
For some industry analysts who have followed the Chengdu project from its inception, its demise has less to do with the trade war, more to do with poor planning.
There was little detailed research and planning before the project was launched. As far as the Chengdu government is concerned, it lacks a sufficient understanding of GlobalFoundriesGu Wenjun, analyst
“There was little detailed research and planning before the project was launched. As far as the Chengdu government is concerned, it lacks a sufficient understanding of GlobalFoundries, its decision-making mechanism and economic strengths, and it did not get strong support from the central government,” said Gu Wenjun, chief analyst at Shanghai-based semiconductor research firm ICwise.
The idea of establishing a joint venture was first pitched to Chongqing municipality, a neighbouring city of Chengdu, in 2016. Chongqing signed a memorandum of understanding with GlobalFoundries to set up a plant to manufacture 300mm silicon wafers – components for making integrated circuits – using technology from GlobalFoundries’ Singapore factory.
After the deal to open a Chongqing plant fell through for unclear reasons, Chengdu moved in to cut a deal with GlobalFoundries in late-2016. A 2017 blueprint stated that 3,500 employees could be working at the site, according to Wallace Pai, then GlobalFoundries’ general manager for China.
But production never started. Initially the project was supposed to have two phases: using mainstream technologies to manufacture 300mm wafers from 2018, then transferring to more advanced technologies in late-2019.
However, in October 2018, the two partners decided to “bypass” the phase one manufacturing stage, partly because of China’s increasing demand for more advanced products and GlobalFoundries’ own financial stress. The project has since stalled.
Comparing official announcements from the Chengdu government and GlobalFroundries back in 2017, Gu from ICwise said the two had different focuses, which might explain the plant’s derailment. The government clearly wanted to bring in mainstream, lower-risk technologies to boost the city’s brand, while the company aimed for Chinese capital and government support to invest in more advanced technology, Gu said.
The joint venture will continue after the factory’s demise, with GlobalFoundries still expecting to expand sales in the Chinese market, the company said in its statement. It now has five factories, three in the US and one each in Singapore and Germany.
When The Post contacted the office of the joint venture partner within the Chengdu government, the person answering the phone said they did not know anything about the closure nor future plans, before hanging up without giving their name.
“Our focus in China is on developing and growing our partner ecosystem including creating local technology infrastructure and bringing more intellectual property vendors and electronic design automation partners to better serve the local market,” the company said.
According to the China Semiconductor Industry Association, China’s integrated circuits sales rose 15.8 per cent in 2019 from a year earlier to 756.2 billion yuan (US$106.44 billion), while sales in the global semiconductor market dropped by 12 per cent to US$412 billion.
Last week, Dutch company ASML Holding, a key supplier of chip-making equipment, set up a plant in Wuxi, in Jiangsu province, in a boost to China’s efforts to attract foreign semiconductor investment.
Test in Xiong’an, the new city being built south of Beijing, will focus on everyday goods and services for the first time
American food outlets to be included in the digital currency tests, conducting small transactions with local firms
American chains Starbucks, McDonald’s and Subway were named on the People’s Bank of China’s list of firms that will test the digital currency in small transactions with 19 local businesses. Photo: Bloomberg
China’s central bank has accelerated the testing of its new sovereign digital currency and, for the first time, will include some foreign consumer brands in the programme.
American chains Starbucks, McDonald’s and Subway were named on the People’s Bank of China (PBOC)’s list of firms that will test the digital currency in small transactions with 19 local businesses.
The global names will be joined by local hotels, convenience stores, a stuffed bun shop, a bakery, a bookstore and a gym, according to details revealed at a promotional event in the Xiong’an New Area, a city being built south of Beijing, news portal Sina.com reported.
The inclusion of businesses providing everyday goods and services marks an expansion of the PBOC’s testing. It follows a previous disclosure that last week in Suzhou the digital currency was used to pay half public sector workers’ travel subsidies for May.
Is China a currency manipulator?
Wednesday’s promotional event was organised by the local branch of the National Development and Reform Commission, the powerful planning agency, and attended by representatives of the Big Four state-owned banks and two of the country’s internet giants – Alibaba and Tencent.
China has not released a timetable for launching the digital yuan, but last week’s reports on new testing have fanned speculation that it could be imminent.
The tests were reportedly accelerated after Facebook launched its Libra project in June last year, an attempt to create a global digital currency pegged to a basket of currencies and backed by global commercial giants.
The Libra Association, the consortium managing the project, announced changes last week in an attempt to win regulatory approval and pave the way for an official launch sometime later this year. The consortium said it would create multiple digital units tied to existing currencies such as the US dollar or the euro, rather than a single token based on a basket of currencies.
China’s official digital currency, known as Digital Currency Electronic Payment (DCEP), came into the public spotlight last week when a screenshot of a test version of an app developed by the Agricultural Bank of China circulated online.
The digital currency app has several basic functions, similarly to other Chinese online payment platforms such as Alipay and WeChat Pay – the country’s two most popular online payment tools – allowing users to make and receive payments, and transfer money.
“It’s certain that the DCEP is now in its final testing stage and should be officially launched,” BlockVC, an investment firm, said in a research note.
The PBOC’s digital currency research institute confirmed last Friday that testing was being conducted in four cities: Shenzhen, Suzhou, Xiong’an and Chengdu. In addition, venues for the 2022 Winter Olympics in Beijing and Zhangjiakou will join the testing programme in the future.
What is the Hong Kong Dollar Peg?
The institute, which was inaugurated in 2017, said that the test versions and applications of the currency had not been finalised.
The project testing is based on two principles: the central bank issues the virtual money to commercial banks who then pass it on to consumers, and that is aimed at replacing cash in all transactions.
China is the first major economy to publicly announce plans for a sovereign digital currency, aiming to better control the rapid rise of digital payments worldwide.
The PBOC has, however, cracked down on the trading of other digital currencies and banned banks from accepting cryptocurrencies, which it views as a risk to financial stability.
Documentary puts China’s literary hero into context: there is Dante, there’s Shakespeare, and there’s Du Fu
Theatrical legend Sir Ian McKellen brings glamour to beloved verses in British documentary
A ceramic figurine of Du Fu, a prominent Chinese poet of the Tang dynasty. Du is the subject of a new BBC documentary, thrilling devotees of his poetry. Photo: Simon Song
The resonant words of an ancient Chinese poet spoken by esteemed British actor Sir Ian McKellen have reignited in China discussion about its literary history and inspired hope that Beijing can tap into cultural riches to help mend its image in the wake of the coronavirus pandemic.
The BBC documentary Du Fu: China’s Greatest Poet has provoked passion among Chinese literature lovers about the poetic master who lived 1,300 years ago.
Sir Ian Mckellen read works of ancient Chinese poet Du Fu in Du Fu: China’s Greatest Poet. Photo: BBC Four / MayaVision International
The one-hour documentary by television historian Michael Wood was broadcast on television and aired online for British viewers this month but enthusiasm among Chinese audiences mean the trailer and programme have been widely circulated on video sharing websites inside mainland China, with some enthusiasts dubbing Chinese subtitles.
The documentary has drawn such attention in Du’s homeland that even the Communist Party’s top anti-graft agency has discussed it in its current affairs commentary column. Notably, Wood’s depiction of Du’s life from AD712 to 770 barely mentioned corruption in the Tang dynasty (618-907) government.
“I couldn’t believe it!!” Wood said in an email. “I’m very pleased of course … most of all as a foreigner making a film about such a loved figure in another culture, you hope that the Chinese viewers will think it was worth doing.”
Often referred to as ancient China’s “Sage of Poetry” and the “Poet Historian”, Du Fu witnessed the Tang dynasty’s unparalleled height of prosperity and its fall into rebellion, famine and poverty.
Writer, historian and presenter Michael Wood followed the footsteps of the ancient Chinese poet Du Fu in Yangtze River gorges. Photo: BBC Four / MayaVision International
Wood traced Du’s footsteps to various parts of the country. He interviewed Chinese experts and Western sinologists, offering historical and personal contexts to introduce some of Du’s more than 1,400 poems and verses chronicling the ups and downs of his life and China.
The programme used many Western reference points to put Du and his works into context. The time Du lived in was described as around the as the Old English poem Beowulf was composed and the former Chinese capital, Changan, where Xian is now, was described as being in the league of world cities of the time, along with Constantinople and Baghdad.
Harvard University sinologist Stephen Owen described the poet’s standing as such: “There is Dante, there’s Shakespeare, and there’s Du Fu.”
The performance of Du’s works by Sir Ian, who enjoyed prominence in China with his role as Gandalf in the Lord of the Rings movie series, attracted popular discussion from both media critics and general audiences in China, and sparked fresh discussion about the poet.
“To a Chinese audience, the biggest surprise could be ‘Gandalf’ reading out the poems! … He recited [Du’s poems] with his deep, stage performance tones in a British accent. No wonder internet users praised it as ‘reciting Du Fu in the form of performing a Shakespeare play,” wrote Su Zhicheng, an editor with National Business Daily.
A stone sculpture at Du Fu Thatched Cottage in Chengdu city, China. Photo: Handout
On China’s popular Weibo microblog, a viewer called Indifferent Onlooker commented on Sir Ian’s recital of Du’s poem My Brave Adventures: “Despite the language barrier, he conveyed the feeling [of the poet]. It’s charming.”
Some viewers, however, disagreed. At popular video-sharing website Bilibili.com, where uploads of the documentary could be found, a viewer commented: “I could not appreciate the English translation, just as I could not grasp Shakespeare through his Chinese translated works in school textbooks.”
Watching the documentary amid the coronavirus pandemic, some internet users drew comparisons of Du to Fang Fang, a modern-day award-winning poet and novelist who chronicled her life in Wuhan during the Covid-19 lockdown.
Shanghai pictured in April. Devastation wrought by the coronavirus pandemic has brought about a new suspicion of China. Photo: Bloomberg
The pandemic has infected more than 2.5 million people and killed more than 170,000. It has put the global economy in jeopardy, fuelling calls for accountability. British Foreign Secretary Dominic Raab last week called for a “deep dive” review and the asking of “hard questions” about how the coronavirus emerged and how it was not stopped earlier.
Steve Tsang, director of the SOAS China Institute at University of London, said the British establishment and wider public had changed its perception of Beijing as questions arose about outbreak misinformation and the political leverage of personal protective gear supply.
“The aggressive propaganda of the Chinese government is getting people in the UK to look more closely at China and see that it is a Leninist party-state, rather than the modernising and rapidly changing society that they want to see in China,” Tsang said.
On Sunday, a writer on the website of the National Supervisory Commission, China’s top anti-corruption agency, claimed – without citing sources – that the Du Fu documentary had moved “anxious” British audience who were still staying home under social distancing measures.
“If anyone wants to put the fear of the coronavirus behind them by understanding the rich Chinese civilisation, please watch this documentary on Du Fu,” it wrote, adding that promoting Du’s poems overseas could help “healing and uniting our shattered world”.
English-language state media such as CGTN and the Global Times reported on the documentary last week and some Beijing-based foreign relations publications have posted comments about the film on Twitter.
Wood said he had received feedback from both Chinese and British viewers that talked about “the need, especially now, of mutual understanding between cultures”.
“It is a global pandemic … we need to understand each other better, to talk to each other, show empathy: and that will help foster cooperation. So even in a small way, any effort to explain ourselves to each other must be a help,” Wood said.
He said the idea for producing a documentary about Du Fu started in 2017, after his team had finished the Story of China series for BBC and PBS.
Du Fu: China’s Greatest Poet first aired in Britain on April 7 on BBC Four, the cultural and documentary channel of the public broadcaster. It is a co-production between the BBC and China Central Television.
Wood said a slightly shorter 50-minute version would be aired later this month on CCTV9, Chinese state television’s documentary channel.
The film was shot in China in September, he said.
“I came back from China [at the] end of September, so we weren’t affected by the Covid-19 outbreak, though of course it has affected us in the editing period. We have had to recut the CCTV version in lockdown here in London and recorded two small word changes on my iPhone!” Wood said.
Israeli medical equipment firm IceCure Medical, with an initial US$4 million sales and marketing effort, will open its first Chinese office in Shanghai
English shopping outlet company Value Retail sees the chance to lure consumers who have been under lockdowns aimed at halting the spread of the coronavirus
Foreign firms, including Israeli medical equipment maker IceCure Medical and English shopping outlet company Value Retail, still see opportunities in China despite the coronavirus. Photo: AFP
Not only has the coronavirus pandemic not watered down one company’s expansion plans for China, it has given it even greater reason to push forward into the Chinese market.
Israeli company IceCure Medical is forging ahead with opening its first Chinese office in Shanghai, with plans to spend up to US$4 million for the initial sales and marketing effort for its non-surgical breast cancer treatments.
Chief executive Eyal Shamir said he has seen an uptick in Chinese interest in the company’s ProSense product, which allows the freezing of tumours outside a hospital environment, because it can free up facilities badly needed for Covid-19 patients.
The government approval of the company’s Chinese subsidiary is now only days away following a successful product console registration, according to Shamir, and it has already sold two units to the Fudan University Shanghai Cancer Centre for a clinical study.
World Health Organisation warns the ‘worst still ahead’ in coronavirus pandemic
“We are planning a full launch of the product in China for both breast cancer and breast benign tumours as well as other organs,” Shamir said.
“Post Covid-19, there will be a backlog of many surgeries and not only for breast cancer patients.”
IceCure Medical, though, is not the only foreign company eyeing expansion into China despite the risk of secondary outbreaks of coronavirus.
West of Shanghai, English shopping outlet company Value Retail is also expanding its retail space, banking on Chinese shoppers re-emerging from lockdowns to begin
After being cooped at home for weeks, people want to be outdoors to enjoy the beautiful spring weather – Value Retail
Value Retail is proceeding with plans to enlarge its Suzhou Village shopping centre from 35,000 square metres (378,000 sq ft) to over 50,000 square metres, while also increasing the number of shops from 120 to 200, which will make it the largest of the 11 venues its controls globally.
It is working closely with the Yang Cheng Lake Peninsula government on a date for construction to start, after seeing a surprising increase in retail sales at its centres in early April. The company’s Chinese subsidiary, Value Retail China, attributed the rise to an increasing number of consumers wanting to “get outside” of their homes after being isolated for several weeks.
Suzhou Village sales have increased 40 per cent each week since the start of April, the company said.
“Thanks to the positive recovery [in spending] over the past several weeks, we are going ahead with the Suzhou Village expansion,” the company said in a statement. “After being cooped at home for weeks, people want to be outdoors to enjoy the beautiful spring weather. We provide a shopping experience for guests in an outdoor environment … the motivation for such an experience after isolation is huge. [Being] outdoors is seen as a luxury now.”
In addition, customers are flocking to both its Suzhou and Shanghai Village centres as a form of domestic tourism because of the curb on overseas travel, Value Retail China said.
Despite the economic destruction that the coronavirus pandemic has caused in China, it also is opening up expansion opportunities for entrepreneurial firms in several industries, such as e-commerce and online delivery, life sciences and infrastructure construction, said EY Asia-Pacific transaction advisory services leader Harsha Basnayake.
However, while businesses within Asia-Pacific expressed a desire for opportunistic expansions, most companies still held a pessimistic view of economic recovery that would drag on into 2021.
American companies already operating in China were even less optimistic with over 70 per cent of businesses surveyed by the American Chamber of Commerce in March saying they were reluctant about expanding in the coming year.
Although it is too early to say if retail property will rise – particularly when we are seeing new habits forming, going from shopfronts to online and how far this new behaviour will stick. China will gives us lots of lessons on this. – Harsha Basnayake
“We are expecting opportunities in real estate, particularly in commercial property and logistics, and we think industries in life sciences, some parts of health care and infrastructure will be interesting,” Basnayake said.
“Although it is too early to say if retail property will rise – particularly when we are seeing new habits forming, going from shopfronts to online and how far this new behaviour will stick. China will gives us lots of lessons on this.”
The Chinese government’s move to increase infrastructure spending to boost the economy will also benefit certain industries, such as cement production.
Despite suffering a 24 per cent drop in sales in the first quarter due to virus-related delays in construction activities, China’s largest cement manufacturer, Anhui Conch Cement, is likely to move forward with plans to expand in part due to its participation in the Belt and Road Initiative, according to analysts at S&P Global.
Though no one would be able to tell exactly what will happen when the Covid-19 uncertainties are not completely gone, signs of recovery in China have brought encouragement to us – Justin Channe
Desires to expand are also not limited to these industries, and even the hard-hit hotel industry is starting to show green shoots.
International hotel chain IHG said that the coronavirus would not derail its new Regent-branded hotel project in Chengdu, which is expected to start construction later this year.
“Though no one would be able to tell exactly what will happen when the Covid-19 uncertainties are not completely gone, signs of recovery in China have brought encouragement to us,” said Regent Hotels & Resorts managing director Justin Channe.
“While we saw business pickup across China over the past Qing Ming Festival holiday, Chengdu and its nearby destinations were among the leading ones. In the long run, we stay confident of the outlook for the China hotel industry, including the luxury segment.”
Analysing how coronavirus broke China’s historic economic growth run
Beyond the crisis, there will be ample opportunities for new merger and acquisitions (M&A) amid business restructures and failures, particularly in China, Basnayake added.
A new EY survey found 52 per cent of Asia-Pacific businesses planned on pursuing M&A in the next year.
“While the crisis is having a severe impact on M&A sentiment, there’s evidence from the survey that M&A activity intentions remain steady in the long term. There are many who recognise this is a time where valuations will be reset, and there will be stressed and distressed acquisition opportunities,” Basnayake said.
“For example, from our interviews with corporations in China, a majority said that Covid-19 has not impacted their M&A strategies, noting that the situation has not led to any cancellations or withdrawals from deals, but only in delays in closing deals.”
Around two thirds of the total number of flights scheduled every day in February were cancelled, placing huge financial pressure on airlines and airports
China’s aviation industry has also been affected by a series of restrictions by other countries and airlines, with British Airways extending its suspension until mid-April
The cancellation of around 10,000 flights a day, or around two thirds of the total number of flights scheduled every day in February, has placed huge financial pressure on airlines and airports. Photo: Kyodo
A one-way air ticket from the coastal economic hub of Shanghai to the inland municipality of Chongqing, a journey of over 1,400km (870 miles), now costs less than a cup of coffee, with Chinese airlines slashing prices in a bid to boost weak domestic demand amid the coronavirus outbreak.
The cancellation of around 10,000 flights a day, or around two thirds of the total number of flights scheduled every day in February, has placed huge financial pressure on airlines and airports.
The Civil Aviation Administration of China said in a notice on Tuesday that flights should resume gradually as part of the country’s efforts to return economic and social life back to normal, but passengers are still reluctant to fly with the deadly outbreak still not fully under control.
The one-way flight from Shanghai to Chongqing is being offered for just 29 yuan (US$4.10) by China’s biggest low-cost carrier, Spring Airlines, as a special offer for its frequent flyer club members, while a tall caffe latte at Starbucks in China costs 32 yuan (US$4.5).
Many Chinese carriers do receive subsidies for operating key domestic routes, so this also skews the economics as well Luya You
A one-way ticket from Shanghai to Harbin, the capital of the northern Heilongjiang province, a distance of over 1,600km (994 miles), costs just 69 yuan (US$9.80).
Shenzhen Airlines, a division of state-owned carrier Air China, is also running special offers to Chongqing, with a one-way ticket for the 1000km (621 miles) journey from Shenzhen costing just 100 yuan (US$14), around 5 per cent of the standard price of 1,940 yuan (US$276).
Chengdu Airlines, a unit of Sichuan Airlines, which counts China Southern Airlines as a shareholder, is also offering cheap one-way flights from Shenzhen to Chengdu, a distance of over 1,300km (808 miles), for just 100 yuan.
“Considering lower average costs of operating in mainland China, carriers could potentially offer deeper discounts while making slim profits or just breaking even,” said Luya You, an aviation analyst with Bank of Communication International. “As outbreak numbers stabilise or even decline, carriers will likely adjust their fares as well, so these low fares will not last if the situation quickly turns for the better.
“Many Chinese carriers do receive subsidies for operating key domestic routes, so this also skews the economics as well. If it is a key route, for example, the carrier may choose to continue operating regardless of fares or loads as the route constitutes a major link in the domestic network infrastructure.”
China’s aviation authority confirmed earlier this month that between January 25 and February 14, which included the Lunar New Year holiday, the average daily passenger traffic in China was just 470,000, representing a 75 per cent drop from the same period last year.
China’s aviation industry has also been affected by a series of restrictions by other countries and airlines, with British Airways last week extending its suspension of flights to China until after the Easter holiday in mid-April following travel advice from the British government.
The novel coronavirus, which causes the disease officially named Covid-19, has infected more than 78,000 people and killed 2,700 in China. In recent days, South Korea, Italy and Iran have all reported a surge in new cases, raising fears over the spread of the coronavirus.
“The flight suspensions will track the outbreaks, but not likely lead them. If there are more outbreaks, expect more flight suspensions,” said Andrew Charlton, managing director of Aviation Advocacy.
State-owned carrier’s chief says it wouldn’t be ‘morally acceptable’ to stop flying to the country, and it will stand with its ‘Chinese brothers and sisters’
Dozens of airlines have cancelled or reduced services to the nation amid the virus outbreak, including two East African rivals
Ethiopian Airlines says it will continue flying to China. The routes are among its most profitable. Photo: Shutterstock
Ethiopian Airlines, Africa’s largest and most profitable carrier, will continue flying to China despite growing pressure for it to suspend services to the country as
Dozens of airlines around the globe have cancelled or reduced their services to cities in the world’s second-largest economy amid fears over the outbreak. Its East African rivals Kenya Airways and RwandAir have both suspended flights to China until the outbreak is contained.
But Ethiopian Airlines chief executive Tewolde GebreMariam said the carrier would not abandon the routes, which are among its most profitable.
Tewolde told media over the weekend that the airline had been flying to China since 1973 and it would not be ethical to suspend flights to the country.
“It will not be morally acceptable to stop flying to China today because they have a temporary problem,” he said, adding that the airline would stand with its “Chinese brothers and sisters”.
His remarks came days after Kenyan President Uhuru Kenyatta put pressure on the Ethiopian government – which wholly owns Ethiopian Airlines – to halt flights to China, citing the need to curb the spread of the virus into the East African region.
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The airline has bucked a trend that has seen major airlines – from the United States to Europe and Asia – staying away from Chinese airspace as governments around the world move to keep the deadly virus from their borders. The pneumonia-like illness has so far
in mainland China since the outbreak began in Wuhan in December, with cases reported in more than 20 other countries worldwide.
Speaking during a visit to Washington last week, Kenyatta – who is keen to court both China and the US – insisted that Kenya’s decision to suspend flights from Guangzhou to Nairobi was not political.
He said most African countries had weak health systems that would make it harder to handle the outbreak, so preventing its spread – even if through extreme measures such as grounding flights – was the only option.
“Our worry as a country is not that China cannot manage the disease. Our biggest worry is diseases coming into areas with weaker health systems like ours,” Kenyatta said while addressing members of US think tank the Atlantic Council.
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But Ethiopian Airlines said it would continue flying to Beijing, Shanghai, Guangzhou, Chengdu and Hong Kong and was taking measures to protect staff and passengers. Ethiopia receives about 1,500 visitors from mainland China every day.
According to Tewolde, if the airline halted its Chinese services, China and Africa would be completely disconnected.
“No one in Ethiopian Airlines would like to see this,” he said. “We have to take maximum precautions, but stopping flights is not one of them.”
He added: “Even if we stop flying, people will continue to come to Ethiopia through Singapore, Malaysia, Europe. The transmission of the disease will be dangerously hidden … British Airways stopped flying to China for its economic reasons. But Chinese carriers are flying to the UK.”
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In a separate statement, the carrier said China was “one of the strongest and one of the oldest markets for Ethiopian Airlines”.
“We have been connecting the great Chinese nation with the entire continent of African for almost half a century and it is our growth strategy,” the airline said, adding that it would continue operating in the five cities in compliance with international aviation and health guidelines.
Aside from seeking to shore up revenues, analysts noted that the airline was under tight state control, and Ethiopia would be reluctant to do anything that might harm its strong bilateral ties with China.
Ethiopia is among the nations on the continent with the highest number of Chinese immigrants. Most of them are workers involved in the construction of infrastructure projects including ports, railways, dams, bridges and malls. Those projects have been financed with billions of dollars in loans from China – Ethiopia is reportedly among the biggest recipients of Chinese lending in Africa.
Last year, China was forced to restructure Ethiopia’s debt after the latter edged closer to defaulting on a loan from Beijing for its standard gauge railway.
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Ethiopia, Algeria, Angola, Nigeria and Zambia together accounted for nearly 60 per cent of all Chinese workers on the continent at the end of 2017, according to a study by Johns Hopkins University.
Ethiopia is also a major recipient of direct foreign investment from China.
(Reuters) – Airlines have been suspending flights to China or modifying service in response to the coronavirus outbreak.
Below are details (in alphabetical order):
AIRLINES THAT HAVE CANCELLED ALL FLIGHTS TO MAINLAND CHINA
** American Airlines – Extends suspension of China and Hong Kong flights through April 24
** Air France – Said on Feb.6 it would suspend flights to and from mainland China for much of March
** Air India – Suspends flights to Shanghai, Hong Kong until June 30
** Air Seoul – The South Korean budget carrier suspended China flights from Jan. 28 until further notice.
** Air Tanzania – Tanzania’s state-owned carrier, which had planned to begin charter flights to China in February, postponed its maiden flights.
** Air Mauritius – Suspended all flights to China and Hong Kong
** Austrian Airlines – until end-February.
** British Airways – Jan. 29-March 31.
** Delta Airlines – Feb. 2-April 30
** Egyptair suspended flights on Feb, 1, but on Feb. 20 said it would resume some flights to and from China starting next week.
** El Al Israel Airlines – Said on Feb. 12 it would suspend its Hong Kong flights until March 20 and reduce its daily flights to Bangkok. It suspended flights to Beijing from Jan. 30 to March 25 following a health ministry directive.
** Iberia Airlines – The Spanish carrier extended its suspension of flights from Madrid to Shanghai, its only route, from Feb. 29 until the end of April.
** JejuAir Co Ltd – Korean airline to suspend all China routes starting March 1
** Kenya Airways – Jan. 31 until further notice.
** KLM – Will extend its ban up to March 28
** Lion Air – All of February.
** LOT – Extends flight suspension until March 28
** Oman and Saudia, Saudi Arabia’s state airline, both suspended flights on Feb. 2 until further notice.
** Qatar Airways – Feb. 1 until further notice.
** Rwandair – Jan. 31 until further notice.
** Scoot, Singapore Airlines’ low-cost carrier – Feb. 8 until further notice.
** United Airlines – Feb. 5-April 23. Service to Hong Kong suspended Feb. 8-April 23.
** Vietjet and Vietnam Airlines – Suspended flights to the mainland as well as Hong Kong and Macau Feb. 1-April 30, in line with its aviation authority’s directive.
AIRLINES THAT HAVE CANCELLED SOME CHINA FLIGHTS/ROUTES OR MODIFIED SERVICE
** Air Canada – Extended the suspension of its flights to Beijing and Shanghai until March 27. It also suspended its Toronto to Hong Kong flights from March 1 to March 27, but its Vancouver to Hong Kong route remains active. [bit.ly/39zgmI0]
** Air China – Said on Feb. 12 it will cancel flights to Athens, Greece, from Feb. 17 to March 18
** Air China – State carrier said on Feb. 9 it will “adjust” flights between China and the United States.
** Air New Zealand – Suspended Auckland-Shanghai service Feb. 9-March 29. Reduced capacity on Shanghai route throughout April and Hong Kong route throughout April and May.
** ANA Holdings – Suspended routes including Shanghai and Hong Kong from Feb. 10 until further notice.
** Cathay Pacific Airways – Plans to cut a third of its capacity over the next two months, including 90% of flights to mainland China. It has encouraged its 27,000 employees to take three weeks of unpaid leave in a bid to preserve cash.
** Emirates and Etihad – The United Arab Emirates, a major international transit hub, suspended flights to and from China, except for Beijing.
** Finnair – Cancelled all flights to mainland China and decreased the number of flights to Hong Kong until March 28.
** Hainan Airlines – Suspended flights between Budapest, Hungary, and Chongqing Feb. 7-March 27.
** Korean Air Lines Co. – The national flag carrier suspended eight routes to China and reduced services on nine Chinese routes between Feb. 7 and 22.
** Philippine Airlines – Cut the number of flights between Manila and China by over half.
** Qantas Airways – Suspended direct flights to China from Feb. 1. The Australian national carrier halted flights from Sydney to Beijing and Sydney to Shanghai between Feb. 9-March 29.
** Royal Air Maroc – The Moroccan airline suspended direct flights to China Jan. 31-Feb. 29. On Jan. 16, it had launched a direct air route with three flights weekly between its Casablanca hub and Beijing.
** Russia – All Russian airlines, with the exception of national airline Aeroflot, stopped flying to China from Jan. 31. Small airline Ikar will also continue flights between Moscow and China. All planes arriving from China will be sent to a separate terminal in the Moscow Sheremetyevo airport. Aeroflot reduced the frequency of flights to Beijing, Shanghai and Guangzhou until Feb. 29.
** Nordic airline SAS – Extended its suspension of flights to Shanghai and Beijing until March 29.
** Singapore Airlines – Suspended or cut capacity on flights to Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Xiamen and Chongqing, some of which are flown by regional arm SilkAir.
** UPS – Cancelled 22 flights to China because of the virus and normal manufacturing closures due to the Lunar New Year holiday.
** Virgin Atlantic – Extended its suspension of daily operations to Shanghai until March 28.
** Virgin Australia – Said it will withdraw from the Sydney-Hong Kong route from March 2 because it was “no longer a viable commercial route” due to growing concerns over the virus and civil unrest in Hong Kong.
Cathay Pacific is latest to wield axe, while Taiwan’s new restrictions on visitors from Hong Kong is another blow
More cancellations expected in the coming days as spread of deadly virus continues
The air industry in Hong Kong and beyond has been thrown into disarray by the coronavirus outbreak. Photo: Reuters
Hundreds more Hong Kong flights are set to be dropped as the floodgates open on airlines cancelling services during the city’s fight against the coronavirus.
Carriers based in Asia, Australia, South Africa and Middle East revealed on Friday morning and the previous night they would cut all or some of their flights to the city.
Cathay Pacific is the latest to wield the axe, announcing on Friday afternoon new suspensions of major Hong Kong routes to London, New York and across mainland China because of the virus.
Flights running on the busy route between Hong Kong and Taiwan’s capital Taipei are subject to major cuts. Photo: Shutterstock
The contagion, which started in the central Chinese city of Wuhan, has infected more than 31,400 people, mostly in mainland China, killing more than 635. In Hong Kong, 24 people have been infected, one of those fatally, as of Friday afternoon.
Passengers abandoning travel plans en masse have been compounded by the introduction of entry restrictions across the world against recent visitors to mainland China, some targeting those who had been to Hong Kong.
Destinations suspended by Cathay Pacific until March 28 include London Gatwick, Rome, Washington DC, Newark, Male, Davao, Clark, Jeju and Taichung.
All mainland cities with the exception of Beijing, Shanghai, Chengdu and Xiamen would also be dropped over that period. The company said the decision was made “in view of the novel coronavirus outbreak and the subsequent drop in market demand”.
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It followed Cathay Pacific Group revealing earlier this week there would be a 30 per cent reduction of flights across its worldwide schedule, as well as a 90% cut of mainland flights.
Budget carrier HK Express, controlled by Cathay, said on Thursday it would scrap 82 flights between February 12 and March 26, mostly to destinations such as Seoul and Osaka.
Hong Kong Airlines (HKA) at the same time revealed it would gradually impose even deeper cuts to flights it operated in mainland China and the rest of Asia until March 28.
The ailing carrier will suspend 10 routes and reduce flights on a further 15, amounting to an estimated 128 flights a week being axed. HKA has already cut 214 mainland Chinese flights between January 30 until February 11.
As Taiwan’s new restrictions took effect on Friday – ordering the home or hotel quarantine of anyone entering the self-ruled island who had visited Hong Kong or Macau within the previous 14 days – carriers based there slashed their schedules.
China Airlines would go from running 18 daily Hong Kong flights to just two from next week until March 28, according to Airline Route data published on Thursday.
Eva Air would switch from more than 11 daily flights to fewer than four a day for the rest of the month.
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Eighty flights operate between Hong Kong and Taipei every week, a journey that regularly tops tables ranking the world’s busiest. But under the cuts to come more than half have already been scrapped.
Outside Asia, two airlines on Thursday cut ties with Hong Kong. The struggling Virgin Australia blamed the coronavirus and the anti-government protests that have gripped Hong Kong since June.
It concluded that “current circumstances demonstrate that Hong Kong is no longer a commercially viable route”.
The near-bankrupt South African Airways (SAA) has cancelled its route from Johannesburg amid a wholesale restructuring of the state-owned business. SAA had suspended flying to Hong Kong after November 21 last year amid the city’s civil unrest.
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Meanwhile, American Airlines said on Thursday it would restart flights between Dallas Fort Worth and Hong Kong on February 21, while Hong Kong’s Airport Authority extended the cancellation of its Los Angeles flight to the city until March 27.
The US carrier warned its schedules were subject to an ongoing “review”. Currently there is no US carrier flying to Hong Kong International Airport after United Airlines also withdrew all services until February 20.
Among the Middle East carriers, Emirates was halving its four daily Airbus A380 flights to Hong Kong from next week until March 28. Etihad is also making minor adjustments, Airline Route data showed on Thursday.
The decision, which follows a similar move by the US this week, came as the death toll from the outbreak soared to 259
Health officials on Friday confirmed the first cases in the UK after two people tested positive for the virus
A coach carrying British nationals evacuated from Wuhan arrives at the Arrowe Park Hospital in Wirral, near Liverpool in northwest England. Photo: AFP
Britain on Saturday said it was temporarily withdrawing some staff and their families from its diplomatic sites in China, as Beijing struggles to contain the nationwide new
The decision, which follows a similar move by the United States this week, came as the death toll from the outbreak soared to 259 and the total number of cases neared 12,000 within China.
The Sars-like virus has also begun to spread around the world, with more than 100 infections reported in more than 20 countries.
“We are committed to ensuring the safety and well-being of our staff and their families,” a spokesman for the British Foreign Office said.
“We are therefore temporarily withdrawing some UK staff, and their dependents from our embassy and consulates in China.”
He added that Britain’s ambassador in Beijing and staff needed to continue critical work will remain, and that British nationals in China would still have access to constant consular assistance.
The US, which on Friday temporarily banned the entry of foreign nationals, who had travelled to China over the past two weeks, has also made similar changes.
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On Wednesday, it authorised the departure of non-emergency government employees and their family members from its offices in Beijing, Chengdu, Guangzhou, Shanghai, and Shenyang.
And on Friday, it ordered all relatives of staff members under the age of 21 to leave China immediately.
A spokesman for the US Embassy in Beijing said it made the decision “out of an abundance of caution related to logistical disruptions stemming from restricted transportation and overwhelmed hospitals related to the novel coronavirus”.
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British health officials on Friday confirmed the first cases in the UK, after two members of the same family tested positive for the virus.
One of the two individuals is a student at the University of York, a university spokesman said on Saturday.
Also on Friday, 83 British citizens returned on a UK government-chartered flight from Wuhan, the Chinese city at the centre of the epidemic.
They were immediately taken to a hospital in northwest England for a two-week quarantine.
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