29/04/2020
BEIJING (Reuters) – China announced on Wednesday that its parliament will open a key annual session on May 22, signalling that Beijing sees the country returning to normal after being reduced to a near-standstill for months by the COVID-19 epidemic.
During the gathering of the National People’s Congress in the capital, delegates will ratify major legislation, and the government will unveil economic targets, set defence spending projections and make personnel changes. The ruling Communist Party also typically announces signature policy initiatives.
The session was initially scheduled to start on March 5 but was postponed due to COVID-19, which has infected nearly 83,000 people and killed more than 4,600 on the mainland after emerging late last year in the central city of Wuhan.
As the epidemic has subsided, economic and social life gradually returned to normal, making it possible for the congress to convene, the official Xinhua news agency quoted the standing committee of the NPC, the legislature’s top decision-making body, as saying.
The committee also appointed Huang Runqiu as the new minister for ecology and environment, a post vacated when predecessor Li Ganjie became deputy Communist Party chief for Shandong province earlier this month, Xinhua reported.
Tang Yijun was also named as the new justice minister to replace Fu Zhenghua, who has reached the retirement age of 65 for ministers.
The Chinese People’s Political Consultative Conference (CPPCC), an advisory body to parliament, has proposed starting its annual session a day before the parliamentary session opens.
Analysts expect China to roll out additional fiscal stimulus in order to cushion the blow from COVID-19, which has developed in to a worldwide pandemic that some fear will trigger a severe global recession.
China’s economy contracted for the first time on record during the January-March period, when the government imposed severe travel and transport restriction to curb the spread of the epidemic.
Parliament is also expected to discuss the anti-government protests in Hong Kong, amid growing speculation that Beijing take steps to strengthen its grip on the city.
It is unclear how long parliament and its advisory body will meet for this time, and people familiar with the matter have told Reuters that this year’s annual sessions could be the shortest in decades due to COVID-19 concerns. Usually more than 5,000 delegates descend on Beijing from all over China for at least 10 days.
Beijing city plans to ease quarantine rules as early as Thursday, two sources familiar with the situation told Reuters, ahead of the key political meetings.
People arriving in the capital from other parts of China will no long have to be quarantined for two weeks unless they come from high-risk areas such as Heilongjiang in the north and some parts of Guangdong in the southeast, the sources said.
Source: Reuters
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28/04/2020
SHANGHAI (Reuters) – Apple Inc’s (AAPL.O) discounts on the iPhone 11 in China and the release of a new low-price SE model have put the company in a better position than rivals to weather a coronavirus-related plunge in global smartphone demand.
While China, which accounts for roughly 15% of Apple’s revenue, appears to be a rare bright spot, investors will be keen to get a picture of global demand when the Cupertino, California-headquartered company reports second-quarter results on Thursday.
The iPhone maker has shut retail stores in the United States and Europe following the COVID-19 outbreak, and China is the only major market where it has been able to reopen all shops.
Consumer spending is expected to be muted as the pandemic has crippled economies and Apple, the world’s second-most valuable tech company, is better armed with the launch of its new price-conscious iPhone model, analysts said.
“Apple is better positioned than most to experience a rapid recovery in a post COVID world,” Evercore analyst Amit Daryanani said in a research note. “We see demand as pushed out, not canceled.”
He added that the launch of the $399 iPhone SE suggested that Apple’s supply chain was getting back on its feet after weeks of shutdown earlier this year.
Analysts expect Apple to report a 6% drop in revenue and an 11% fall in net income in its fiscal second quarter, according to Refinitiv data.
On the other hand, Chinese brands such as Oppo and Vivo who have steadily moved to offer high-end models to challenge iPhones, stand to lose marketshare as bargain hunters choose Apple.
Earlier this month, several online retailers in China slashed prices of the iPhone 11 by as much as 18% – a tactic Apple has used in the past to boost demand. And while initial social media reaction to the new iPhone SE was muted, analysts said they were seeing a pick up in demand.
The cheaper iPhone SE could tempt iPhone owners to opt for a newer device, something they might have otherwise delayed in a weak economy, said Nicole Peng, who tracks the smartphone sector at research firm Canalys.
“People want to avoid uncertainty in a downturn,” she said. “Having a brand like Apple that can showcase quality and make people less worried about breakdowns or after-sales service can bring in buyers.”
CHEAP IS GOOD
Early data suggests that the Chinese smartphone market is recovering rapidly in the aftermath of the virus, and Apple has emerged relatively unscathed.
Sales of iPhones in China jumped 21% last month from a year earlier and more than three fold from February, government data showed, meaning March-quarter sales in the country were likely to have slipped just 1%.
To be sure, a recovery in Chinese demand won’t offset sales lost in the United States and Europe. And the company is yet to launch a smartphone enabled with 5G wireless technology like those offered by Asian rivals, a disadvantage for Apple so far.
But those same expensive 5G models may not sell well in the current climate of frugality, analysts said.
“If there are no massive subsidies (in China), I doubt there will be many smartphone users who will be eager to upgrade to 5G,” said Linda Sui, who tracks the smartphone sector at research firm Strategy Analytics.
Sui expects iPhone shipments in 2020 to be down 2 percentage points at the most, versus double digit declines at Chinese firms.
Apple also has revenue from its services business to fall back on. It has leveraged its large iPhone customer base to boost services revenue from music, apps, gaming and video.
“Apple’s Services segment should remain resilient in today’s work-from-home environment, thereby demonstrating the durability of Apple’s model,” Cowen analyst Krish Sankar said.
Source: Reuters
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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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26/04/2020
- City at centre of outbreak finally able to declare itself clear of disease after months in lockdown and thousands of deaths
- Risk of infection remains, however, with some patients testing positive for coronavirus that causes disease without showing symptoms
Ferries and other public transport services resumed in Wuhan last week. Photo: Xinhua
The city of Wuhan, the initial epicentre of the coronavirus pandemic, no longer has any Covid-19 patients in hospital after the last 12 were discharged on Sunday.
Their release ended a four-month nightmare for the city, where the disease was first detected in December. The number of patients being treated for Covid-19, the disease caused by a new coronavirus, peaked on February 18 at 38,020 – nearly 10,000 of whom were in severe or critical condition.
“With the joint efforts of Wuhan and the national medical aid given to Hubei province, all cases of Covid-19 in Wuhan were cleared as of April 26,” Mi Feng, a spokesman for the National Health Commission said on Sunday afternoon.
The announcement came only one day after the city discharged the last patient who had been in a severe condition. That patient also was the last severe case in Hubei province.
The last patient discharged from Wuhan Chest Hospital, a 77-year-old man surnamed Ding, twice tested negative for Sars-CoV-2, the virus that causes Covid-19, and was released at noon on Sunday.
“I missed my family so much!” Ding told Changjing Daily.
Another unidentified patient exclaimed as he left the hospital: “The air outside is so fresh! The weather is so good today!”
Wuhan faced a long journey to bring its patient count down to zero.
The city of 11 million, the capital of Hubei province and a transport hub for central China, was put under a strict lockdown on January 23 that barred anyone from entering or exiting the city without official approval for 76 days until it was officially lifted on April 8.
Coronavirus: Wuhan, Los Angeles officials discuss getting back to work after lockdown
22 Apr 2020
Residents were ordered to stay in their apartments as the city stopped public transport and banned private cars from city streets. As the epidemic worsened, more than 42,000 medical staff from across the country were sent to the city and to Hubei province to help ease the burden on the local health care system.
Wuhan was the hardest hit city in China, accounting for 50,333 of the 82,827 locally transmitted Covid-19 cases recorded in China. More than 4,600 died in the country from the disease.
On March 13, the city reported for the first time that there were no new suspected cases of the infection, and five days later there were no confirmed cases.
The number of discharged patients bottomed out at 39.1 per cent at the end of February, gradually climbing to 92.2 per cent by last Thursday.
“Having the patients in the hospital cleared on April 26 marks a major achievement for the city’s Covid-19 treatment,” the Wuhan Health Commission said in a statement.
However, having no severe cases in hospital does not mean all the discharged patients will require no further treatment as they may still need further care.
“Clearing all the severe cases marks a decisive victory for the battle to safeguard Wuhan,” health minister Ma Xiaowei told state broadcaster China Central Television on Saturday.
“Some patients who have other conditions are being treated in specialised hospitals. It has been properly arranged.”
Coronavirus: Chinese writer hit by nationalist backlash over diary about Wuhan lockdown
Ten patients aged between 42 and 85 who have been declared coronavirus-free are still in intensive care at the city’s Tongji Hospital where they are being treated for kidney problems and other complications arising from Covid-19. Some still need ventilators to help them breathe.
These 10 patients are under 24-hour care, with 190 nurses on four-hour rotations. There are other patients in a similar condition in two other hospitals in Wuhan, according to the Hubei Broadcasting and Television Network.
However, the discharge of the last batch of Covid-19 patients does not mean that the risk of infection is gone.
The city reported 20 new cases of people testing positive for Sars-CoV-2, the official name for the coronavirus that causes the disease, but who do not yet show symptoms.
There are 535 such carriers under medical observation. Past data shows some of these asymptomatic carriers will develop symptoms, and so will be counted as Covid-19 patients under China’s diagnosis and treatment plan.
China’s coronavirus infection curve has flattened out with about 694 imported cases of Covid-19 on top of about 800 locally transmitted ones now under treatment.
The national health commission spokesman warned that people still need to be on high alert as the virus is continuing to spread around the globe, with no sign yet of a slowdown.
“[We] must not drop our guard and loosen up. [We] must discover cases in time and deal with them quickly,” Mi said, citing the continued pressure from cases imported by people returning from overseas.
“The next step will be to implement the requirements of the central government and continue to guard against imported cases and a rebound of domestic transmitted cases.”
Source: SCMP
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26/04/2020
SHANGHAI (Reuters) – China’s smog-prone northern province of Hebei met its air quality targets by a big margin over the winter after concerted efforts to tackle emissions, a local official said on Sunday, without mentioning coronavirus-related factory shutdowns.
Average PM2.5 concentrations over the October-March period dropped 15% from a year earlier to 61 micrograms per cubic metre, while sulphur dioxide also fell by a third, said He Litao, vice-head of the provincial environmental bureau.
Most experts have attributed the significant decline in air pollution throughout China in the first quarter to the coronavirus outbreak and tough containment measures, which saw cities and entire provinces locked down and sharply reduced traffic and industrial activity throughout the country.
With millions staying at home, concentrations of lung-damaging PM2.5 particles fell by nearly 15% in more than 300 Chinese cities in the first three months of 2020.
Shanghai saw emissions fall by nearly 20% in the first quarter, while in Wuhan, where the pandemic originated, monthly averages dropped more than a third compared to last year.
However, He of the Hebei environmental bureau attributed the local decline in pollution to the “conscientious implementation” of government decisions even in the face of unfavourable weather conditions.
According to a winter action plan published last year, 10 cities in Hebei were expected to cut lung-damaging small particles known as PM2.5 by 1%-6% compared to the previous year.
Despite the decline, average PM2.5 was still much higher than China’s official standard of 35 micrograms, and the recommended World Health Organization level of 10 micrograms.
Source: Reuters
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25/04/2020
- But trade with partner countries might not be as badly affected as with countries elsewhere in the world, observers say
- China’s trade with belt and road countries rose by 3.2 per cent in the January-March period, but second-quarter results will depend on how well they manage to contain the pathogen, academic says
China’s investment in foreign infrastructure as part of its Belt and Road Initiative has been curtailed because of the coronavirus pandemic. Photo: Xinhua
The
coronavirus pandemic is set to cause a slump in Chinese investment in its signature
and a dip in trade with partner countries that could take a year to overcome, analysts say.
But the impact of the health crisis on China’s economic relations with nations involved in the ambitious infrastructure development programme might not be as great as on those that are not.
China’s total foreign trade in the first quarter of 2020 fell by 6.4 per cent year on year, according to official figures from Beijing.
Trade with the United States, Europe and Japan all dropped in the period, by 18.3, 10.4 and 8.1 per cent, respectively, the commerce ministry said.
By comparison, China’s trade with belt and road countries increased by 3.2 per cent in the first quarter, although the growth figure was lower than the 10.8 per cent reported for the whole of 2019.
China’s trade with 56 belt and road countries – located across Africa, Asia,
Europe and South America – accounts for about 30 per cent of its total annual volume, according to the commerce ministry.
Despite the first-quarter growth, Tong Jiadong, a professor of international trade at Nankai University in Tianjin, said he expected China’s trade with belt and road countries to fall by between 2 and 5 per cent this year.
His predictions are less gloomy than the 13 to 32 per cent contraction in global trade forecast for this year by the
World Trade Organisation.
“A drop in [China’s total] first-quarter trade was inevitable but it slowly started to recover as it resumed production, especially with Southeast Asian, Eastern European and Arab countries,” Tong said.
“The second quarter will really depend on how the epidemic is contained in belt and road countries.”
Nick Marro, Hong Kong-based head of global trade at the Economist Intelligence Unit, said he expected China’s total overseas direct investment to fall by about 30 per cent this year, which would be bad news for the belt and road plan.
“This will derive from a combination of growing domestic stress in China, enhanced regulatory scrutiny over Chinese investment in major international markets, and weakened global economic prospects that will naturally depress investment demand,” he said.
The development of the Chinese built and operated special economic zone in the Cambodian town of Sihanoukville is reported to have slowed, while infrastructure projects in Bangladesh, including the Payra coal-fired power plant, have been put on hold.
The development of the Chinese built and operated special economic zone in the Cambodian town of Sihanoukville is reported to have slowed. Photo: AFP
Marro said the reduction of capital and labour from China might complicate other projects for key belt and road partner, like Pakistan, which is home to infrastructure projects worth tens of billions of US dollars, and funded and built in large part by China.
“Pakistan looks concerning, particularly in terms of how we’ve assessed its sovereign and currency risk,” Marro said.
“Public debt is high compared to other emerging markets, while the coronavirus will push the budget deficit to expand to 10 per cent of GDP [gross domestic product] this year.”
Last week, Pakistan asked China for a 10-year extension to the repayment period on US$30 billion worth of loans used to fund the development of infrastructure projects, according to a report by local newspaper Dawn.
China’s overseas investment has been falling steadily from its peak in 2016, mostly as a result of Beijing’s curbs on capital outflows.
Last year, the direct investment by Chinese companies and organisations other than banks in belt and road countries fell 3.8 per cent from 2018 to US$15 billion, with most of the money going to South and Southeast Asian countries, including Singapore, Vietnam, Indonesia and Pakistan.
Tong said the pandemic had made Chinese investors nervous about putting their money in countries where disease control measures were becoming increasingly stringent, but added that the pause in activity would give all parties time to regroup.
“Investment in the second quarter will decline and allow time for the questions to be answered,” he said.
“Past experience along the belt and road has taught many lessons to both China and its partners, and forced them to think calmly about their own interests. The epidemic provides both parties with a good time for this.”
Dr Frans-Paul van der Putten, a senior research fellow at Clingendael Institute in the Netherlands, said China’s post-pandemic strategy for the
belt and road in Europe
might include a shift away from investing in high-profile infrastructure projects like ports and airports.
Investors might instead cooperate with transport and logistics providers rather than invest directly, he said.
“Even though in the coming years the amount of money China loans and invests abroad may be lower than in the peak years around 2015-16, I expect it to maintain the belt and road plan as its overall strategic framework for its foreign economic relations,” he said.
Source: SCMP
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23/04/2020
BEIJING, April 23 (Xinhua) — China decided to donate another 30 million U.S. dollars to the World Health Organization (WHO) in support of global efforts to fight COVID-19 and the construction of public health systems in developing countries, a Foreign Ministry spokesperson said here Thursday.
Spokesperson Geng Shuang told a news briefing that the WHO, led by Director-General Tedros Adhanom Ghebreyesus, had actively fulfilled its duties with objective, science-based and fair position and played an important role in assisting countries in responding to the outbreak and boosting international cooperation on COVID-19.
Geng said to support the WHO is to defend the principles of multilateralism and safeguard the status and authority of the United Nations at a crucial time of the battle against the pandemic, adding that the virus is the common enemy of humankind, and the international community can only defeat it through unity and cooperation.
In March, China donated 20 million dollars to the WHO to support the global fight against COVID-19.
The spokesperson said China’s donations to the WHO reflected the support and trust of the Chinese government and people in the organization, and China also made its own contributions to global public health and the fight against the pandemic.
“China will continue to stand in solidarity and render mutual assistance with other countries to jointly overcome the pandemic, safeguard regional and global public health and build a community with a shared future for mankind,” he said.
Surce: Xinhua
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23/04/2020
BENGALURU (Reuters) – The Indian economy is likely to suffer its worst quarter since the mid-1990s, hit by the ongoing lockdown imposed to stem the spread of coronavirus, according to a Reuters poll, which predicted a mild and gradual recovery.
Over 2.6 million people tmsnrt.rs/3aIRuz7 have been infected by the coronavirus worldwide and more than 180,000 have died. Business and household lockdowns have disrupted supply chains globally, bringing growth to a halt.
The April 17-22 Reuters poll predicted the economy expanded at an annual pace of 3.0% last quarter but will shrink 5.2% in the three months ending in June, far weaker than expectations in a poll published last month for 4.0% and 2.0% growth, respectively.
The predicted contraction would be the first – under any gross domestic product calculation, which has changed a few times – since the mid-1990s, when official reporting for quarterly data began.
“The extended lockdown until early May adds further downside risk to our view of a 5% year-on-year GDP fall in the current quarter, the worst in the last few decades,” said Prakash Sakpal, Asia economist at ING.
“We don’t consider economic stimulus as strong enough to position the economy for a speedy recovery once the pandemic ends,” he said.
(Graphic: Reuters poll graphic on coronavirus impact on the Indian economy IMAGE link: here)
The Indian government announced a spending package of 1.7 trillion rupees in March to cushion the economy from the initial lockdown, which has been extended until May 3.
In an emergency meeting last week, the Reserve Bank of India cut its deposit rate again, after reducing it on March 27 and lowering the main policy rate by 75 basis points. It also announced another round of targeted long-term repo operations to ease liquidity.
But even with those measures, 40% of economists, or 13 of 32 – who provided quarterly figures – predicted an outright recession this year. Only one had expected a recession last month.
In the worst case, a smaller sample of respondents predicted, the economy would contract 9.3% in the current quarter. That compares with 0.5% growth in the previous poll’s worst-case forecast in late March, underscoring how rapidly the outlook has deteriorated.
The latest poll’s consensus view still shows the economy recovering again slowly in the July-September quarter, growing 0.8%, then 4.2% in October-December and 6.0% in the final quarter of the fiscal year, in early 2021.
But that compares with considerably more optimistic near-term forecasts of 3.3%, 5.0% and 5.6%, respectively, in the previous poll.
“A rebound in economic activity following the disruption is expected, but the low starting point of growth implies a gradual recovery,” said Upasana Chachra, chief India economist at Morgan Stanley.
“Indeed, before disruptions related to COVID-19, growth was slowing, with domestic issues of risk aversion in financial sector … (and) those concerns will likely stay after the COVID-19 disruptions have passed unless the policy response is much larger than expected,” she said.
The unemployment rate has tripled to 23.8% since the lockdown started on March 25, according to the Centre for Monitoring Indian Economy, a Mumbai-based research firm.
The Indian economy was now forecast to expand 1.5% in the fiscal year ending on March 31, 2021 – the weakest since 1991 and significantly lower than 3.6% predicted in late March. It probably grew 4.6% in the fiscal year that just ended.
Under a worst-case scenario, the median showed the economy shrinking 1.0% this fiscal year. That would be the first officially reported economic contraction for a 12-month period since GDP was reported to have contracted for calendar year 1979.
“Unless fiscal policy is also loosened aggressively alongside monetary policy, there is a big risk the drastic economic slowdown currently underway morphs into an annual contraction in output and that the recovery is hampered,” said Shilan Shah, senior India economist at Capital Economics.
All 37 economists who answered a separate question unanimously said the RBI would follow up with more easing, including lowering the repo and reverse repo rates and expanding the new long-term loans programme.
The RBI was expected to cut its repo rate by another 40 basis points to 4.00% by the end of this quarter. Already lowered twice over the past month by a cumulative 115 basis points, the reverse repo rate was forecast to be trimmed by another 25 points by end-June to 3.50%.
Source: Reuters
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23/04/2020
BEIJING (Reuters) – China will cut its subsidies on new energy vehicles (NEV) by 10% this year, and will expand government purchases of NEVs, the finance ministry said on Thursday.
China will in principle cut such subsidies by 20% in 2021 and 30% in 2022, the finance ministry said in a statement. However, it will not cut subsidies on qualified new energy commercial vehicles earmarked for public purposes this year.
Under the plan, China would extend subsidies for NEV purchases to 2022, rather than ending them this year, and extend their purchase tax exemption for two years.
China will slightly lift the requirements for the driving range and power efficiency of cars qualified for the subsidies, the statement said, adding authorities will support the sales of cars with swappable batteries, a technology that has been pursued by Chinese electric vehicle makers Nio Inc (NIO.N) and BAIC BluePark (600733.SS).
Only passenger cars cheaper than 300,000 yuan (34,330.23 pounds) will be offered subsidies, it said. The price is higher than starting price of Tesla Inc’s (TSLA.O) China-made Model 3 sedans.
China also said authorities will give priority to purchase new energy vehicles for government use but did not give further details.
The new policy is effective from April 23. NEVs include battery-powered electric, plug-in hybrid and hydrogen fuel-cell vehicles.
China has set an aggressive goal for NEVs to account for a fifth of auto sales by 2025 compared with the current 5%, as it seeks to reduce pollution and cultivate homegrown champions.
Sales of NEVs, however, contracted for a ninth month in a row in March and were down over 50% from a year earlier, according to data from the China Association of Automobile Manufacturers (CAAM).
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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