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.
Pou Chen makes footwear for the likes of Nike and Adidas, but says it has suffered from a lack of orders as global value chains strain under the impact from the virus
Chinese workers moved to Vietnam to help set-up new factories as the company expand its production, but have now become expendable
With the likes of Nike and Adidas closing retail stores around the world to comply with social distancing requirements, analysts also said orders plummeted 50 per cent in the second quarter, although the company declined to comment on the media reports. Photo: Bloomberg
A group of 150 Chinese workers believe the world’s largest maker of trainers used the coronavirus as an excuse to fire them, having helped Taiwanese firm Pou Chen successfully expand its production into Vietnam for more than a decade.
Pou Chen, which makes footwear for the likes of Nike and Adidas, informed the group in late April that they would no longer be needed as they were unable to return to
from their hometowns in China due to the coronavirus lockdowns.
“We believe we contributed greatly to the firm’s relocation process, copying the production line management experience and successful model of China’s factories to Vietnamese factories,” said Dave Zhang, who started working for Pou Chen in Vietnam in 2003.
“Now, when the factories over there have matured, and there is a higher automation level in production, our value has faded in the management’s eyes and we got laid off, in the name of the automation level.”
Rush hour chaos returns to Vietnam’s streets as coronavirus lockdown lifted
The group claims the firm began to fire Chinese employees several years ago, with the total number dropping from over 1,000 at its peak to around 400 last year.
“We 150 employees were the first batch of Chinese employees to be laid off this year. We are all pessimistic and expect more will be cut,” added Zhang.
In its email on April 27, Pou Chen said it was forced to terminate the contracts of the Chinese employees across five of its factories due to an unprecedented decline in orders and financial losses.
The Chinese employees, many of whom have been working for the shoemaker for decades, said the compensation offered was unfair and below the levels required by labour law in both Vietnam and China.
In a further statement to the South China Morning Post, Pou Chen stood by the move as the coronavirus pandemic had reduced demand for footwear products and so required an “adjustment of manpower.”
“[The dismissals were] in accordance with the relevant labour laws of the country of employment … and employee labour contracts,” added the statement from Pou Chen, which employs around 350,000 people worldwide.
Company data showed Pou Chen’s first quarter revenues tumbled 22.4 per cent year-on-year to NT$59.46 billion (US$1.99 billion), the weakest in six years.
With the likes of Nike and Adidas closing retail stores around the world to comply with social distancing requirements, analysts also said orders plummeted 50 per cent in the second quarter, although the company declined to comment on the media reports.
Last month, the company was also mulling pay cuts and furloughs that would affect 3,000 employees in Taiwan and officials based in its overseas factories, according to the Taipei Times.
Andy Zeng, who had worked for the firm since 1995, said the group were “very upset” when they received the news last month as the impact of the coronavirus pandemic began to reverberate around the world, disrupting global value chains.
“Most of us joined Pou Chen in the 1990s when we were in our late teens or early 20s, when the Taiwan-invested company started investing and setting up factories in mainland China. Now more than two decades have passed,” he said.
Zeng was among the first generation of skilled workers in China as Pou Chen developed rapidly, enjoying the benefits of cheap labour, although the workers themselves were rewarded with regular pay rises.
The company needed a group of skilled Chinese workers to go to its new factories in Vietnam. I said yes because I thought it was a good opportunity to see the outside world – Andy Zeng
“I worked at the Dongguan branch of Pou Chen for 11 years from 1995.” Zeng added “In the 1990s and early 2000s, the company expanded rapidly in Dongguan with a growing number of large orders, and every worker had to work hard around the clock. I remember I earned 300 yuan (US$42) a month in 1995, and my monthly salary rose to 1,000 yuan (US$141) in 1998.”
Zeng’s salary eventually rose to over 3,000 yuan in 2005 as China’s economy boomed, leading Pou Chen to seek alternative production sites in Vietnam and Indonesia where labour and land were even cheaper. However, in the early 2000s, the new locations lacked skilled shoe manufacturing workers like Zeng.
“The company needed a group of skilled Chinese workers to go to its new factories in Vietnam. I said yes because I thought it was a good opportunity to see the outside world and the offer of US$700 per month was not bad.” Zeng said.
“We actively cooperated with their plans. Over the past decade, we have been away from our families and hometowns, and followed the company’s strategy to work hard in Vietnam.
With no deaths and cases limited to the hundreds, Vietnam’s Covid-19 response appears to be working
“In 2005, the company sent me to its newly-built factory in Vietnam. This year was my 14th year in Dong Nai in Vietnam. I have witnessed the company’s production capacity in Vietnam become larger and larger. When I arrived, there were only a few production lines, and now there are at least dozens of them, employing more than 10,000 workers in each factory.”
According to a report in the Taipei Times on April 14, citing both Reuters and Bloomberg, Pou Chen was ordered to temporarily shut down one of its units in Vietnam over coronavirus concerns, according to Vietnamese state media.
The company was forced to suspend production for two days after failing to meet local rules on social distancing, Tuoi Tre newspaper reported.
“We Chinese employees actually were pathfinders for the company’s relocation from China to Vietnam,” said Zhang, who was in charge of a 1,700-worker factory producing 1.7 million shoe soles per month.
What our Chinese employees have done in Vietnam for more than a decade can be said to be very simple but very difficult – Dave Zhang
“We were sent to resolve any ‘bottlenecks’ in the production lines that were slowing down the rest of the plant, because during the launch of every new production line, Vietnamese workers would strike and get into disputes. As far as I know, there were over a thousand Chinese employees managing various aspects of the production lines in the company’s Vietnamese factories.
“In fact, what our Chinese employees have done in Vietnam for more than a decade can be said to be very simple but very difficult. That is to teach Vietnamese workers our experience of working on a production line, improve the productivity of the Vietnamese workers, and help the factories become localised.”
Overall, Pou Chen says it produces more than 300 million pairs of shoes per year, accounting for around 20 per cent of the combined wholesale value of the global branded athletic and casual footwear market.
“Because of cultural shock and great pressure to expedite orders, Vietnamese workers were not used to the management style of Taiwan factories,” Zhang added.
“Many of our Chinese employees were beaten by Vietnamese workers [due to cultural differences about work]. During anti-China protests in Vietnam, we were still under great pressure to keep the local production lines operating.”
Buffett’s Berkshire posted a record quarterly net loss of nearly US$50 billion
Company sells entire stakes in US airlines, Buffett says ‘world has changed’
Warren Buffett speaks during the virtual Berkshire Hathaway annual shareholders meeting. Photo: Bloomberg
Billionaire investor Warren Buffett said Saturday he’s confident the US economy will bounce back from its pummelling by the coronavirus pandemic because “American magic has always prevailed”.
The 89-year-old made the sanguine prediction about the world’s largest economy as his holding company Berkshire Hathaway reported first-quarter net losses of nearly US$50 billion.
Buffett also announced Saturday that his company had sold all its stakes in four major US airlines last month, as the pandemic clobbered the travel industry.
“It turns out I was wrong,” he said of his acquisitions of 10 per cent stakes in American Airlines, Delta Air Lines, Southwest Airlines and United Airlines.
Berkshire Hathaway had paid US$7 billion to US$8 billion, and “we did not take out anything like that,” he said.
Between the purchases that took place over months, and the sale, “the airlines business I think changed in a very major way” and could no longer meet Berkshire criteria for profitability, he said.
Buffett’s announcement may further hurt airlines already pushed to the brink by coronavirus lockdown measures, now looking to the US government for US$25 billion in relief funds.
Berkshire Hathaway, based in Omaha, Nebraska, called its first-quarter setback “temporary” but said it could not reliably predict when its many businesses would return to normal or when consumers would resume their former buying habits.
Warren Buffett (left) and vice-chairman Charlie Munger at the annual Berkshire shareholder shopping day in Omaha, Nebraska in 2019. Photo: Reuters
“We’ve faced great problems in the past, haven’t faced this exact problem – in fact we haven’t really faced anything that quite resembles this problem,” Buffett said in a lengthy speech on the country’s economic history.
“But we faced tougher problems, and the American miracles, American magic has always prevailed and it will do so again.”
“We are now a better country, as well as an incredibly more wealthy country, than we were in 1789 … We got a long ways to go but we moved in the right direction,” he said, referencing the abolition of slavery and women’s suffrage.
Warren Buffett has traded his old flip phone for Apple’s iPhone
25 Feb 2020
“Never bet against America.”
Buffett is considered one of the savviest investors anywhere. His fortune of US$72 billion is the fourth-largest in the world, according to Forbes, and in normal years, the company’s annual gathering in Omaha is a high-point of the calendar for investors, a “Woodstock for capitalists”.
But the devastating economic impact of the pandemic has hit hard at Berkshire Hathaway’s wide range of investments, and the need for social distancing forced it to hold the annual meeting online.
Buffett addressed his shareholders in a live-stream flanked only by Gregory Abel, who is in charge of Berkshire’s non-insurance operations.
His business partner for six decades, 96-year-old Charlie Munger, did not appear.
China’s first-quarter GDP shrinks for the first time since 1976 as coronavirus cripples economy
Buffett, in a statement, played down his company’s bleak-looking net figure. He said a better measure of the company’s performance was its operating earnings, which exclude investments and are less subject to sharp fluctuations.
By that measure, Berkshire Hathaway saw growth to US$5.9 billion from US$5.55 billion a year earlier.
The brutal drop in the net – to a loss of US$49.75 billion from a profit last year of US$21.7 billion – resulted primarily from the virus-related decline in value of its broad investment portfolio, which ranges from energy to transport to insurance and technology.
Chinese cryptocurrency billionaire finally sits down to eat with Warren Buffett
7 Feb 2020
The annual meeting often has an almost carnival atmosphere, as thousands of fans and investors flock to Nebraska to hear from the celebrated “Oracle of Omaha”. Buffett, famous for his relatively modest lifestyle, turns 90 on August 30.
In documents filed Saturday, Berkshire noted that until mid-March many of its companies were posting “comparative revenue and earnings increases” over the same 2019 period.
Many of its companies – including in rail transport, energy production and some manufacturing and service businesses – are deemed essential and are able to continue working amid the far-reaching confinement orders.
But their turnover slowed considerably in April, the company statement said.
Moves taken by those companies such as employee furloughs, salary cuts and reductions, and capital spending reductions are “necessary actions” and “temporary,” it said.
“Doctors and nurses are people who saved me from cancer and gave me strength in the darkest time. I need to return the favour,” says Li Yan, a food delivery rider based in Beijing.
Mr Li was diagnosed with lymph cancer in 2003, when he was just 17 years old. He recovered from the disease and has been full of gratitude ever since for the medical workers who nursed him back to health. With China in a national lockdown, food delivery firms found themselves in hot demand providing meals for residents stuck at home to prevent the spread of the coronavirus.
As a delivery rider for Meituan, one of China’s biggest food delivery firms, Mr Li saw an opportunity to repay the medical professionals he admires by providing them with food and drinks as they worked tirelessly on patients across the city. “Given my past experience, I felt I needed to do something for them in return during the virus outbreak,” he adds.
Beijing is a city of 21 million residents, and Mr Li covers its Tongzhou district, where there are a handful of hospitals with fever clinics, one of which is a designated hospital for Covid-19 treatment. “Many might have concerns delivering for the hospital, but I’ve chosen to deliver for them more often. I just think of the local residents and medical workers who need us. I can’t leave them being hungry. It’s not for money.”
Before the outbreak in China, he delivered more than 50 orders on an average day. But during the first ten days after the coronavirus outbreak in late January, the number of orders dropped to less than 20, as some restaurants were closed. The outbreak also coincided with the Chinese New Year period which is normally a low season.
“By mid-February when the situation was brought more under control, and people’s concerns and fears gradually began to ease, orders started to be restored. I can deliver over 40 orders a day now.”
Image copyright LI YAN
During this time, Meituan brought in a contactless delivery option which allowed food to be dropped off at designated points to avoid contact between customers and riders. “When I called customers to explain, some initially didn’t understand and wanted to cancel the order. But gradually people grew more understanding and began to welcome the contactless approach.”
Empty streets
China was in lockdown for more than two months, although restrictions are now beginning to be lifted. It will still take time before a sense of normalcy returns.
“I remember when the coronavirus first broke out, it was hazy for a few days in Beijing. Streets were empty and stores were closed. An ambulance or a delivery rider occasionally drove by. It felt like I was living in a different world.”
Mr Li says restaurants have started to re-open and people have begun coming back to work in the office since mid-February. Orders are still lower than normal but are improving.
“I miss the hustling Beijing which used to filled with traffic, the days when I could smell car exhaust when I stop at crossroads, the times when I had to walk all the way up to the 6th floor to deliver food, and even times when I was late for a delivery.”
Image copyright LI YAN
When the virus first broke out, face masks and alcohol disinfectant were the most ordered items along with supermarket groceries. “Grains, rice, cooking oil, vegetables, fruits, and solid, packaged food that lasts long. Orders often came in big sizes and transaction prices at around 200 yuan [£23; $28] to 300 yuan on one order.”
Being a food delivery rider, Mr Li feels he can not only give back to the medical community but to the city’s vulnerable too.
“I once received an order that came with a note saying the customer is a 82-year-old who lives alone and couldn’t get downstairs to pick up the food so the rider needs to enter the residential community and deliver food to the door. I had to spend some time communicating with security and finally was allowed in. The door was open when I arrived, and I put the bowl of wontons [a type of dumpling] on the table.”
Tips have increased from happy customers during the pandemic as a result. “Many more send me thank-you notes in the Meituan app and tell me to take care.”
Image copyright LI YAN
Keeping clean
Mr Li has a new routine now which involves lots of disinfecting and temperature checks. “I get my temperature checked dozens of times everyday now, before entering shopping malls, at restaurants, and returning home to the residential compound I live in. I also bring with me disinfectant sprays, a towel in my scooter and use disposable gloves when delivering to areas with reported confirmed cases.”
While he’s providing a vital service, is Mr Li worried about the risk of infection? “I did have worries when the virus spread and was at its worst time here but I feel like I’ve already been there, given what I went through in the fight against cancer.
“I’ve learnt to take things easy, look at the bright side of things and always seek strength in a dark time. As long as I take sufficient precautions, masks, gloves, disinfectants and everything, and follow advice from disease control experts, I think the possibility of getting the virus is pretty low.”
And with a seven-month pregnant wife at home, Mr Li is looking forward to happier times.
China’s famed Yiwu International Trade Market, a barometer for the health of the nation’s exports, has been hammered by the economic fallout from Covid-19
Export orders have dried up amid sweeping containment measures in the US and Europe and restrictions on foreigners entering China have shut out international buyers
The coronavirus pandemic has severely dented wholesale trade at the Yiwu International Trade Market in China. Photo: SCMP
The Yiwu International Trade Market has always been renowned as a window into the vitality of Chinese manufacturing, crammed with stalls showcasing everything from flashlights to machine parts.
But today, as the coronavirus pandemic rips through the global economy, it offers a strikingly different picture – the dismal effect Covid-19 is having on the nation’s exports.
The usually bustling wholesale market, home to some 70,000 vendors supplying 1,700 different types of manufactured goods, is a shadow of its former self.
Only a handful of foreign buyers traipse through aisles of the sprawling 4-million-square-metre (43 million square feet) complex, while store owners – with no customers to tend to – sit hunched over their phones or talking in small groups.
A foreign buyer visits a stall selling face masks. Photo: Ren Wei
“We try to convince ourselves that the deep slump will not last long,” said the owner of Wetell Razor, Tong Ciying, at her empty store. “We cannot let complacency creep in, although the coronavirus has sharply hampered exports of Chinese products.”
Chinese exports plunged by 17.2 per cent in January and February combined compared to the same period a year earlier, according to the General Administration of Customs. The figure was a sharp drop from 7.9 per cent growth in December.
After riding out a supply shock that shut down most of its factories, China is now facing a second wave demand shock, as overseas export orders vanish amid sweeping containment measures to contain the outbreak around the globe.
Nowhere is that clearer to see than in Yiwu. The city of 1.2 million, which lies in the prosperous coastal province of Zhejiang, was catapulted into the international limelight as a showroom for Chinese manufacturing when the country joined the World Trade Organisation in 2001.
Coronavirus: Is the gig economy dead, and should the self-employed worry?
Before the pandemic, thousands of foreign buyers would flock to the mammoth trade market each day to source all manner of products before sending them home.
But the outbreak, which has claimed the lives of more than 113,000 people and infected more than 1.9 million around the world, is proving a major test for the market and the health of the trade dependent city.
Imports and exports via Yiwu last year were valued at 296.7 billion yuan (US$42.2 billion) – nearly double the city’s economic output.
Businesses, however, are facing a very different picture in 2020. Most traders at the market say they have lost at least half their business amid the pandemic, which was first detected in the central Chinese city of Wuhan last year.
Just take a look at the situation in Yiwu and you will understand the extent of the virus’ effect on China’s trade with foreign countries – Tianqing
“Yiwu is the barometer for China’s exports,” said Jiang Tianqing, the owner of Beauty Shine Industry, a manufacturer of hair brushes. “Just take a look at the situation in Yiwu and you will understand the extent of the virus’ effect on China’s trade with foreign countries.”
Jiang said his business was only just hanging on thanks to a handful of loyal customers placing orders via WeChat.
“I assume it will be a drawn-out battle against the coronavirus,” he said. “We are aware of the fact that developed economies like the US and Europe have been severely affected.”
The Yiwu market reopened on February 18 after a one-month long hiatus following the Lunar New Year holiday and the government’s order to halt commercial activities to contain the spread of the outbreak.
Jiang Tianqing, owner of hair brush company Beauty Shine Industry. Photo: Ren Wei
But facing the threat of a spike in imported cases, Beijing banned foreigners from entering the country in late March – shutting out potential overseas buyers.
Despite the lack of business, local authorities have urged stall owners to keep their spaces open to display Yiwu’s pro-business attitude, owners said.
“For those bosses who just set up their shops here, it would be a do-or-die moment now since their revenue over the next few months will probably be zero,” said Tong. “I am lucky that my old customers are still making orders for my razors.”
The impact of the coronavirus is just the latest challenge for local merchants, who normally pay 200,000 yuan (US$28,000) per year for a 10-square-metre (108 square feet) stall at the market.
Traders were hard hit by the trade war between China and the United States when the Trump administration imposed a 25 per cent tariff on US$200 billion of Chinese imports last year.
At the time, some Chinese companies agreed to slash their prices to help American buyers digest the additional costs.
“But it is different this time,” said Jiang. “Pricing does not matter. Both buyers and sellers are eager to seal deals, but we are not able to overcome the barriers [to demand caused by the virus].”
Ma Jun, a manager with a LED light bulb trading company, said the only export destination for her company’s products was war-torn Yemen because it was the only country with ports still open.
It is a public health crisis that ravages not just our businesses, but the whole world economy – Dong Xin
Dong Xin, an entrepreneur selling stationery products, said he could not ship the few orders he had because “ocean carriers have stopped operations”.
“It is a public health crisis that ravages not just our businesses, but the whole world economy,” he said. “The only thing can do is to pray for an early end to the pandemic.”
Most wholesale traders in the Yiwu market run manufacturing businesses based outside the city, so a sharp fall in sales has a ripple effect on their factories, potentially resulting in massive job cuts.
Workers pack containers at Yiwu Port, an inland port home to dozens of warehouses. Photo: Ren Wei
At Yiwu Port, an inland logistics hub full of warehouses where goods from the factories are unpacked and repacked for shipping abroad, container truck drivers joke about their job prospects.
“We used to commute between Shaoxing and here five times a week, and now it is down to twice a week,” said a driver surnamed Wang, describing the trip from his home to the shipping port, just over 100km away.
“At the end of the day, we may not be infected with the coronavirus, but our jobs will still be part of the cost of the fight against it.”
BEIJING (Reuters) – China will promote the sales of export products in domestic markets, as foreign trade faces unprecedented challenges due to the coronavirus pandemic, an assistant commerce minister said on Friday.
As the coronavirus spreads to almost all of China’s trading partners, the world’s second-largest economy is set to reach a grim milestone for full year growth, with the pace of expansion likely to be the slowest since the Cultural Revolution ended in 1976. And, the export sector is facing millions of job losses and factory shutdowns.
“Due to the rapid spread of the epidemic in the world, foreign demand has slumped and the biggest difficulty facing foreign trade companies is the plunge in orders,” said Ren Hongbin, the assistant minister at the Ministry of Commerce.
He said firms across the board have had their orders cancelled or delayed, and new orders are “very hard to sign”.
“The uncertainty about the pandemic has become the biggest uncertainty for foreign trade development.”
Forecasters expect China’s 2020 growth could be nearer the 2.0% mark – the slowest in over 40 years – due to the sweeping impact of the pandemic both at home and overseas. The economy grew 6.1% last year.
China’s overseas shipments fell 17.2% in January-February from the same period a year earlier, marking the steepest fall since February 2019. Imports sank 4% from a year earlier.
Among the government measures to support the sector, China is accelerating efforts to build online trade fairs and guiding exporters to work with e-commerce retailers for sales in domestic markets and coordinating with its trading partners to stabilise supply chains, said Ren.
The Canton Fair, China’s oldest and biggest trade fair due to take place online, will feature live-streaming services for participants, Li Xingqian, another commerce ministry official, told the same briefing. The fair was originally scheduled to begin on April 15, but was postponed due to the coronavirus outbreak.
China is willing to boost trade relations with other countries, including the United States, under the new circumstances, said Ren, adding that Beijing hopes to work together with Washington to promote bilateral trade.
Both countries have been engaged in a near two-year long trade war with tit-for-tat tariffs on each other’s goods, before negotiators called a truce with an interim trade deal in January.
Image copyright GETTY IMAGESImage caption More than a billion people have been staying at home during the lockdown
Will India extend its rigorous 21-day lockdown to slow the spread of coronavirus beyond its end date next week? By all accounts, yes.
On 24 March, India shut its $2.9 trillion economy, closing its businesses and issuing strict stay-at-home orders to more than a billion people. Air, road and rail transport systems were suspended.
Now, more than two months after the first case of Covid-19 was detected in the country, more than 5,000 people have tested positive and some 150 people have died. As testing has ramped up, the true picture is emerging. The virus is beginning to spread through dense communities and new clusters of infection are being reported every day. Lifting the lockdown could easily risk triggering a fresh wave of infections.
A harsh lockdown is certain to slow down the disease. Virologists I spoke to believe India is still at an early stage of the infection. The country still doesn’t have enough data on the transmissibility of the virus or even how many people could have been infected and recovered to develop adequate herd immunity. (It is slowly beginning finger prick blood tests to look at the presence of protective antibodies.)
More than 250 of India’s 700-odd districts have reported the infection. Reports say at least seven states have a third of all infections, and want the lockdown extended. Six states have reported clusters of rapidly growing infections – from the capital Delhi in the north to Maharashtra in the west and Tamil Nadu in the south.
Economic fallout
Not surprisingly, the lockdown is already hurting the economy. Many of the early hotspots are economic growth engines and contribute heavily in revenues to the exchequer. Mumbai, India’s financial capital and Maharashtra’s main city, accounts for more than a third of overall tax collection. The densely populated city has reported more than 500 cases and 45 deaths, and numbers are steadily rising. Authorities say the infection is now spreading through the community. Mumbai has made wearing face masks mandatory.
Image copyright GETTY IMAGESImage caption India has ramped up testing during the lockdown
Many of these hotspot clusters are also thriving manufacturing bases. The spread of infection means that they will be under lockdown for a longer period of time.
The services industry, which generates almost half of India’s GDP, is also likely to remain shut for some more time. Construction, which employs a bulk of migrant workers, will remain similarly suspended. The unemployment rate may have already climbed to more than 20% after the lockdown, according to a report by the Center for Monitoring Indian Economy.
For the moment, economists say, the government will have to prioritise farming over everything else to ensure the livelihoods of millions and secure the country’s future food supplies.
Half of India’s labour force work on farms. The lockdown happened at a time when a bumper winter crop had to be harvested and sold, and the rain-fed summer crop had to be sowed. The immediate challenge is to harvest and market the first crop, and secure the second.
Moving trucks to pick up produce and take them to markets, with adequate social distancing and hand washing will be something the government will have to move on quickly.
“The immediate challenge is to ensure that rural India is not hit,” says Rathin Ray, an economist. “Realistically, a complete lockdown cannot be continuously maintained beyond early May. We don’t have a choice but to reopen gradually after that.”
Image copyright GETTY IMAGESImage caption India has been under a lockdown from 24 March
There is little doubt about that. For his part, SK Sarin, who heads a government advisory panel on combating the disease, says the lockdown can be only eased in a “graded manner in areas that are not hotspots” and that the hotspots remained cordoned off.
Like other affected countries, India will have to prepare itself for what Gabriel Leung, an infectious disease epidemiologist and dean of medicine at the University of Hong Kong, describes as several rounds of “suppress and lift” cycles.
During these periods “restrictions are applied and relaxed, applied again and relaxed again, in ways that can keep the pandemic under control but at an acceptable economic and social cost.”
Also, Dr Leung observes, “how best to do that will vary by country, depending on its means, tolerance for disruption and its people’s collective will. In all cases, however, the challenge essentially is a three-way tug of war between combating the disease, protecting the economy and keeping society at an even keel”.
It is now clear that shutdowns need to continue until transmission has slowed down markedly, and testing and health infrastructure has been scaled up to manage the outbreak.
Experts from the southern state of Kerala, a striking outlier that is containing the infection thanks to a transparent government and a robust public health system, say it isn’t time to lift the lockdown yet and have recommended a three-phase relaxation.
For most countries, easing the lockdown is a tricky policy choice. It sparks fears of triggering a fresh wave of infection and presents the inevitable trade-off between lives and livelihoods. French Prime Minister Edouard Phillipe, says relaxing the lockdown in his country is going to be “fearsomely complex”. In a crisis like this, according to his Dutch counterpart Mark Rutte, leaders have to “make 100% of the decisions with 50% of the knowledge, and bear the consequences.”
Image copyright GETTY IMAGESImage caption India’s financial capital, Mumbai, is emerging as a hotspot
It is going to be tougher for India with its vast size, densely packed population and enfeebled public health system. Also, no country in the world possibly has so much inter-state migration of casual workers, who are the backbone of the services and construction industries.
How will India manage to return these workers to their work places – factories, farms, building sites, shops – without a substantial easing of public transport at a time when crowded trains and buses can be a vector of transmission and easily neutralise the gains of the lockdown? Even allowing restricted mobility – allowing social distancing, temperature checks and passenger hygiene – would put considerable pressure on the public transport system.
The policy choices are fiendishly tough, and the answers are far from easy. India bungled the lockdown by not anticipating the exodus of millions of migrant workers from cities. The weeks ahead will tell whether the fleeing men, women and children carried the infection to their villages. The country simply cannot afford to make similar mistakes again while trying to relax the lockdown. Nitin Pai of The Takshashila Institution, a think tank, believes states should be left to decide on easing restrictions, and decisions “should be based on threat [of infection], which should be determined by extensive testing”.
This week Prime Minister Narendra Modi said that the “situation in the country is akin to a social emergency”. His government now needs make sure that the looming threat to the nation’s health and economic progress is tackled skilfully.
Image copyright GETTY IMAGESImage caption Authorities are also asking overseas Chinese to reconsider travel plans
Travellers from countries with severe coronavirus outbreaks who arrive in some parts of China will have to undergo a 14-day quarantine, state media say.
Travellers from the virus hotspots of South Korea, Japan, Iran and Italy arriving in the capital will have to be isolated, a Beijing official has said.
Shanghai and Guangdong announced similar restrictions earlier.
Authorities are worried the virus might be imported back into the country.
Although most virus deaths have been in China, Monday saw nine times more new infections outside China than in.
Shanghai said it would require new arrivals from countries with “relatively serious virus conditions” to be isolated, without naming the countries.
Authorities are also asking overseas Chinese to reconsider travel plans.
“For the sake of your family’s health and safety, please strengthen your precautions, carefully decide on your travel plans and minimise mobility,” officials in one southern Chinese province said.
China reported 125 new virus cases on Tuesday – the lowest number of new daily infections in six weeks. There were also 31 more deaths – all in Hubei province, where the virus emerged.
In other developments:
Finance ministers from the G7 countries have said they are “ready to take action”, including fiscal measures to aid the response to the virus and support the global economy
The Pope, who had cancelled a Lent retreat for the first time in his papacy because he was suffering from a cold, has tested negative for the virus, Italian media report
South Korean President Moon Jae-in has put the country into a “state of war” and ordered all government departments to shift to a 24-hour emergency system
Jailed British-Iranian woman Nazanin Zaghari-Ratcliffe is in good health, Iran’s judiciary has said. She was assessed after her husband said she was showing symptoms of Covid-19
Media caption Julie, who lives in Singapore, was diagnosed with coronavirus and then put into isolation
How are different countries affected?
There are now almost 90,000 cases worldwide in about 70 countries, although the vast majority – just under 90% – remain in China, and most of those are in Hubei province where the virus originated late last year.
Of the nearly 8,800 cases outside China, 81% are in four countries – Iran, South Korea, Italy and Japan.
One of the countries worst affected outside China – Italy – said on Monday that the death toll there had risen by 18 to 52. There are 1,835 confirmed cases, most of them in the Lombardy and Veneto areas of the north. Nearly 150 people are said to have recovered.
However, the country is seeing a slowdown in new cases. On Monday, the authorities said there were 258 new cases of the virus – a 16% increase on the previous day – after new cases spiked by 50% on Sunday.
On Tuesday, Iran said the latest death toll from the virus was 77 – although the real figure is believed to be much higher. More than 2,300 people are said to be infected, including senior political figures. The head of Iran’s emergency medical services, Pirhossein Kolivand, was one of them, the Ilna news agency reported on Tuesday.
Some 23 MPs are also reported to have tested positive for the virus, and an official close to the Supreme Leader, Ayatollah Ali Khamenei, was reported on Monday to have died of the disease.
Health officials in the US state of Washington said on Monday that four more people had died, bringing the total there to six. They are the only deaths in the US so far. Local officials say they are buying a hotel to convert it into an isolation hospital.
On Tuesday, Ukraine confirmed its first case of coronavirus, while Portugal, Iceland, Jordan, Tunisia, Armenia, Latvia, Senegal, Morocco and Andorra confirmed their first cases on Monday.
How deadly is Covid-19?
The WHO says the virus appears to particularly affect those over 60, and people already ill.
In the first large analysis of more than 44,000 cases from China, the death rate was 10 times higher in the very elderly compared to the middle-aged.
Most patients have only mild symptoms and the death rate appears to be between 2% and 5%, the WHO said.
By comparison, seasonal flu has an average mortality rate of about 0.1%, but is highly infectious – with up to 400,000 people dying from it each year.
Other strains of coronavirus, such as Severe Acute Respiratory Syndrome (Sars) and Middle East Respiratory Syndrome (Mers), have much higher death rates than Covid-19.
NEW DELHI/MUMBAI (Reuters) – The Indian government ordered mobile carriers on Friday to immediately pay billions of dollars in dues after the Supreme Court threatened the companies and officials with contempt proceedings for failing to implement an earlier ruling.
The court, which had ordered companies including Vodafone Idea (VODA.NS) and Bharti Airtel (BRTI.NS) to pay 920 billion Indian rupees ($13 billion) in overdue levies and interest by Jan. 23, last month rejected petitions seeking a review of the order it issued back in October.
“This is pure contempt, 100% contempt,” Justice Arun Mishra told lawyers for the companies and the government on Friday.
Later in the day, the Department of Telecommunications called for “immediate payments” from the telcos. A second order instructed relevant offices to stay open on Saturday to “facilitate the Telecom Licensees to make payments or contact them with respect to any matter related to that.”
The companies had contested the government’s definition of revenues subject to tax and Vodafone Idea and Bharti Airtel both flagged risks to their ability to continue as ongoing concerns following the October order. They did not immediately respond to calls seeking comment on the new ruling.
The companies, along with Reliance Jio, which is backed by Asia’s richest man, Mukesh Ambani, control more than 90% of India’s mobile market.
Jio, a relatively new entrant which has disrupted the market with its cut-price offerings, has paid its dues.
Shares in Vodafone Idea, in which Britain’s Vodafone Group (VOD.L) owns a sizable stake, closed down 24.4% after the order. The company’s future is in doubt, with Vodafone Group having said it has no plans to commit any more equity into India.
Shares in Bharti Airtel rose 4.64%, as many investors expect it will be able to survive the payment, leaving it and Jio with a potential opportunity to win market share and enjoy an effective duopoly in the sector. In a letter to the government, Bharti Airtel said it would deposit 100 billion rupees by Thursday and pay the balance “well before” the next hearing on March 17.
Justice Mishra rebuked the government for having failed to implement the court order on collecting the dues. “A desk officer in the government stays a Supreme Court order … Is there any law left in the country?,” he said.
“We will draw up contempt against everyone,” he added, implying that both company and government officials could be fined or jailed if the dues are not paid by March 17.
Analysts said the court’s move could harm the government more broadly, as well as the companies.
“It can’t be in anybody’s interest if a company as high profile as Vodafone Idea shuts shop. Also, the government’s own dues from the sector are at risk,” said Mahesh Uppal, director at ComFirst, a telecom consultancy firm.
BANKS BURDENED
Indian banks are burdened with nearly $140 billion of bad loans and face another huge hit if Vodafone Idea is forced into bankruptcy.
Banks in India are owed roughly 300 billion rupees by Vodafone Idea, according to a Macquarie report from last year.
“Banks were yet to make additional provisioning for these loans as they were expecting some sort of a relief from the court,” said Siddharth Purohit, an analyst at SMC Institutional Equities.
Banks that have the highest exposure to Vodafone Idea include State Bank of India (SBI.NS), Punjab National Bank (PNBK.NS), Canara Bank (CNBK.NS) and Bank of India (BOI.NS), among others, the Macquarie report said.
Vodafone Idea, which owes the government about $4 billion in dues related to the ruling, has seen its shares slide more than 40% since the court ruling in October.
The broader Indian stock market also reversed early gains to trade lower after the ruling as investors worried about the fallout.
Still, some analysts remained hopeful the government could appeal to the court to review its decision.
“Let’s see how the government reacts and what they do. If the government appeals to the court they could still settle it out, and we may see some positives emerge for everyone,” said a senior industry analyst, who asked not to be named.
CHINDIA ALERT: You'll be living in their world, very soon 
Coronavirus: Chinese workers in Vietnam cry foul after being fired by Taiwanese firm making shoes for Nike, Adidas
A group of 150 Chinese workers believe the world’s largest maker of trainers used the coronavirus as an excuse to fire them, having helped Taiwanese firm Pou Chen successfully expand its production into Vietnam for more than a decade.
Pou Chen, which makes footwear for the likes of Nike and Adidas, informed the group in late April that they would no longer be needed as they were unable to return to
from their hometowns in China due to the coronavirus lockdowns.
“We 150 employees were the first batch of Chinese employees to be laid off this year. We are all pessimistic and expect more will be cut,” added Zhang.
In its email on April 27, Pou Chen said it was forced to terminate the contracts of the Chinese employees across five of its factories due to an unprecedented decline in orders and financial losses.
The Chinese employees, many of whom have been working for the shoemaker for decades, said the compensation offered was unfair and below the levels required by labour law in both Vietnam and China.
“[The dismissals were] in accordance with the relevant labour laws of the country of employment … and employee labour contracts,” added the statement from Pou Chen, which employs around 350,000 people worldwide.
Company data showed Pou Chen’s first quarter revenues tumbled 22.4 per cent year-on-year to NT$59.46 billion (US$1.99 billion), the weakest in six years.
With the likes of Nike and Adidas closing retail stores around the world to comply with social distancing requirements, analysts also said orders plummeted 50 per cent in the second quarter, although the company declined to comment on the media reports.
Andy Zeng, who had worked for the firm since 1995, said the group were “very upset” when they received the news last month as the impact of the coronavirus pandemic began to reverberate around the world, disrupting global value chains.
“Most of us joined Pou Chen in the 1990s when we were in our late teens or early 20s, when the Taiwan-invested company started investing and setting up factories in mainland China. Now more than two decades have passed,” he said.
Zeng was among the first generation of skilled workers in China as Pou Chen developed rapidly, enjoying the benefits of cheap labour, although the workers themselves were rewarded with regular pay rises.
The company needed a group of skilled Chinese workers to go to its new factories in Vietnam. I said yes because I thought it was a good opportunity to see the outside world – Andy Zeng
What our Chinese employees have done in Vietnam for more than a decade can be said to be very simple but very difficult – Dave Zhang
Posted in 50 per cent, accordance, Adidas, adjustment of manpower, around the world, automation level, below the levels, Bloomberg, boomed, bottlenecks, Chaos, cheaper, China, China’s economy, Chinese employees, Chinese workers, closing, comment, Company, compensation, comply, contributed, cooperated, coronavirus, coronavirus lockdowns, Covid-19 response, cry foul, cultural shock, deaths, decade, decline, declined, dismissals, disputes, Dong Nai, Dongguan, employee labour contracts,, expand, expendable, factories, families, financial losses, fired, footwear, furloughs, higher, hometowns, impact, Indonesia, Labour law, lack of orders, land, Mainland China, making, management experience, management style, media reports, Nike, opportunity, orders, pay cuts, pessimistic, plans, plummeted, Pou Chen, production, production line, relocation process, requirements, retail stores, returns, Reuters, Rush hour, second quarter, set up, shoe manufacturing, shoes, skilled, Social distancing, south china morning post, strain under, streets, strike, Taipei Times, Taiwan, Taiwan-invested, Taiwanese firm, Uncategorized, unfair, unprecedented, Vietnam, Vietnamese, Virus, workers, world’s largest maker of trainers | Leave a Comment »