28/04/2020
BEIJING (Reuters) – China’s factory activity likely rose for a second straight month in April as more businesses re-opened from strict lockdowns implemented to contain the coronavirus outbreak, which has now paralysed the global economy.
The official manufacturing Purchasing Manager’s Index (PMI), due for release on Thursday, is forecast to fall to 51 in April, from 52 in March, according to the median forecast of 32 economists polled by Reuters. A reading above the 50-point mark indicates an expansion in activity.
While the forecast PMI would show a slight moderation in China’s factory activity growth, it would be a stark contrast to recent PMIs in other economies, which plummeted to previously unimaginable lows.
That global slump, caused by heavy government-ordered lockdowns, as well as the cautious resumption of business in China, suggests any recovery in the world’s second-largest economy is likely to be some way off.
“The recovery so far has been led by a bounce-back in production, however, the growth bottleneck has decisively shifted to the demand side, as global growth has weakened and consumption recovery has lagged amid continued social distancing,” Morgan Stanley said in a note.
“The expected slump in external demand has likely capped further recovery in industrial production.”
The latest official data showed 84% of mid-sized and small business had reopened as of April 15, compared with 71.7% on March 24.
Hobbled by the coronavirus, China’s economy shrank 6.8% in the first quarter from a year earlier, the first contraction since current quarterly records began.
That has left Chinese manufacturers with reduced export orders and a logistics logjam, as many exporters grapple with rising inventory, high costs and falling profits. Some have let workers go as part of the cost-cutting efforts.
A China-based brokerage Zhongtai Securities estimated that the country’s real unemployment rate, measured using international standards, could exceed 20%, equal to more than 70 million job losses and much higher than March’s official reading of 5.9%.
Sheng Laiyun, deputy head at the statistics bureau, said on Sunday migrant workers and college graduates are facing increasing pressures to secure jobs, while official jobless surveys show nearly 20% of employed workers not working in March.
Chinese authorities have rolled out more support to revive the economy. The People’s Bank of China earlier in April cut the amount of cash banks must hold as reserves and reduced the interest rate on lenders’ excess reserves.
Source: Reuters
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22/04/2020
SEOUL/BEIJING (Reuters) – China has allowed 200 employees from South Korea’s Samsung Electronics Co Ltd (005930.KS) to enter the country to work on an expansion of the firm’s NAND memory chip factory, the company said on Wednesday.
The move came after China said on Tuesday that it was in talks with some countries to establish fast-track procedures to allow travel by business and technical personnel to ensure the smooth operation of global supply chains.
China said it has reached a consensus on such an arrangement with South Korea, without elaborating on the terms, including whether individuals entering China will be subject to quarantine.
China, where the virus first emerged late last year, blocked entry last month for nearly all foreigners in an effort to curb risks of coronavirus infections posed by travellers from overseas. After bringing the local spread under control with tough containment measures, it is trying to restart its economic engines after weeks of near paralysis.
A chartered China Air Ltd (601111.SS) plane flew in the Samsung Electronics employees on Wednesday, a company spokeswoman said.
Samsung said its employees will follow the local government’s policy upon arrival, without elaborating.
Shaanxi province, where Samsung’s NAND memory chip plant is located, requires people travelling from overseas to undergo a 14-day quarantine, according to South Korea’s foreign ministry.
“Samsung employees will not be exempted from the 14-day quarantine rule imposed by the Shaanxi province. They will get coronavirus tests at the airport upon arrival and will be transported to a local hotel designated by Chinese authorities,” an official at the Consulate General of South Korea in Xi’an told Reuters.
Samsung Electronics in December increased investment at its chip factory in China by $8 billion to boost production of NAND flash memory chips.
Source: Reuters
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21/04/2020
- 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.”
Source: SCMP
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24/09/2019
- Shanghai’s authorities have doubled the free-trade zone to 240 square kilometres by including part of Lingang, a previously untapped area linked to the Yangshan deep water port
- The expansion reflected the city’s renewed efforts to build a free marketplace that can rival regional business hubs such as Hong Kong and Singapore
Aerial photo taken on March 9, 2017 shows the Shanghai free trade zone (FTZ). Photo: Xinhua
Shanghai’s ambitious plan to turn Lingang into a Hong Kong-style free-trade port has yet to impress European companies due to a slow pace of enforcement with a series of liberalisations subject to Beijing’s approval.
The European Union Chamber of Commerce in Shanghai said on Tuesday that the business lobby group was expecting concrete measures to be implemented at the 119.5-square kilometre newly expanded free-trade zone (FTZ), which would whet European companies’ investment appetite, but it also vented dismay towards the slow progress.
It was advisable for the government to carry out planned reforms sooner to convince foreign investors of the golden opportunities inside the zone, said Carlo Diego D’Andrea, the chamber’s Shanghai chairman, who is also vice-president of the EU business chamber in China.
“After so many years [of waiting], we would like to see reform happen soon, not just the talks,” he said in an interview with South China Morning Post.
Shanghai doubled the size of the free-trade zone last month to about 240 sq km by including part of Lingang, a previously untapped area that is linked to the
Yangshan deep water port.
The expansion reflected the city’s renewed efforts to build a free marketplace that can rival regional business hubs such as Hong Kong and Singapore.
Where is China’s Silicon Valley? SCMP Graphics
Hong Kong’s ongoing street protests against a controversial extradition bill have wreaked havoc on the city’s economy and brought an
opportunity to mainland metropolises such as Shanghai and Shenzhen to catch up with the special administrative region.
Shanghai plans to impose zero tariffs on imported goods inside the Lingang FTZ, but the reform measures cannot be implemented unless the General Administration of Customs gives a green light.
Shanghai’s city government had proposed a series of incentives aimed at building Lingang into a world-class investment magnet, the free-trade zone’s deputy director Wu Wei said at a Friday press conference, without elaborating on when the policies might be endorsed by the relevant ministry-level authorities.
Professor Zhou Zhenhua, president of Shanghai Academy of Global Cities, said the central government was still cautious of taking drastic steps in quickly liberalising the Lingang FTZ amid worries of rampant capital and cargo flows.
US bestselling electric vehicle maker Tesla has built its Gigafactory 3 at the Lingang FTZ after it secured an approval from Beijing to establish a wholly owned assembly plant late last year.
The approval for the first wholly-owned foreign car factory on mainland China coincided with a sales drop in the country’s automobile market, the first contraction in nearly three decades.
“Why could not you have opened the market before when the market was booming,” said D’Andrea.
He said that the timing of scrapping the foreign ownership cap amid the first negative growth of the domestic car market in three decades was not enough to show Beijing’s determinations in drawing overseas funds.
Beijing has been harping on its resolution in further opening up the markets to foreign businesses as a way of amid the US-China trade war that began in 2018.
Source: SCMP
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13/02/2019
WASHINGTON, Feb. 12 (Xinhua) — Data from NASA satellites have shown that China and India led the way in greening on land, thanks to ambitious tree-planting programs in China and intensive agriculture in both countries.
The study published in the latest edition in Nature Sustainability on Monday showed that at least 25 percent of the foliage expansion since the early 2000s globally came in China.
The researchers from Boston University found that global green leaf area has increased by 5 percent in the new century, an area equivalent to all of the Amazon rainforest.
“China and India account for one-third of the greening, but contain only nine percent of the planet’s land area covered in vegetation,” said lead author Chen Chi of Boston University.
“That is a surprising finding, considering the general notion of land degradation in populous countries from over-exploitation,” said Chen.
Rama Nemani, a research scientist at NASA’s Ames Research Center and a co-author of the study said: “When the greening of the Earth was first observed, we thought it was due to a warmer, wetter climate and fertilization from the added carbon dioxide in the atmosphere.”
But with data from NASA’s Terra and Aqua satellites, scientists realized that humans are also contributing.
“Humans are incredibly resilient. That’s what we see in the satellite data,” said Nemani.
China’s contribution to the global greening trend comes in large part from its programs to conserve and expand forests, accounting for about 42 percent of the greening contribution, according to the study.
Another 32 percent of the greening change in China, and 82 percent in India, resulted from intensive cultivation of food crops, since the farmland in China and India has not changed much since the early 2000s, while both increased their food production to feed large populations.
However, the researchers rang bells as well. They said that the gain in global greenness did not necessarily offset the loss of natural vegetation in tropical regions like Brazil and Indonesia.
The loss of sustainability and biodiversity in those ecosystems cannot be offset by the simple greenness of the landscape, according to the study.
Source: Xinhua
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CHINDIA ALERT: You'll be living in their world, very soon 