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.
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China will not set an economic growth goal for this year as it deals with the fallout from the coronavirus pandemic.
It is the first time Beijing has not had a gross domestic product (GDP) target since 1990 when records began.
The announcement was made by Premier Li Keqiang at the start of the country’s annual parliament meeting.
The world’s second largest economy shrank by 6.8% in the first quarter from a year ago as lockdowns paralysed businesses.
“This is because our country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the world economic and trade environment,” Premier Li said.
The country’s leadership has promised to boost economic support measures amid growing concerns that rising unemployment could threaten social stability.
The move comes as tensions between Beijing and Washington are becoming increasingly strained over the coronavirus pandemic, trade and Hong Kong.
On Thursday, President Donald Trump stepped up his attacks on China, suggesting that the country’s leader, Xi Jinping, is behind a “disinformation and propaganda attack on the United States and Europe.”
It came as Mr Trump and other Republicans have escalated their criticism of Beijing’s handling of the early stages of the outbreak.
Also on Thursday, China announced plans to impose new national security legislation on Hong Kong after last year’s pro-democracy protests.
The announcement was met with a warning from Mr Trump that the US would react “very strongly” against any attempt to gain more control over the former British colony.
Separately, two US senators have proposed legislation to punish Chinese entities involved in enforcing the planned new laws and penalise banks that do business with them.
Earlier this week, the US Senate unanimously passed a proposal to delist Chinese companies from American stock exchanges if they fail to comply with US financial reporting standards.
US-listed Chinese companies have come under increasing scrutiny in recent weeks after Luckin Coffee revealed that an internal investigation found hundreds of millions of dollars of its sales last year were “fabricated”.
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.
WUHAN, China (Reuters) – China reported a drop in new coronavirus infections for a fourth day as drastic curbs on international travellers reined in the number of imported cases, while policymakers turned their efforts to healing the world’s second-largest economy.
The city of Wuhan, at the centre of the outbreak, reported no new cases for a sixth day, as businesses reopened and residents set about reclaiming a more normal life after a lockdown for almost two months.
Smartly turned out staff waited in masks and gloves to greet customers at entrances to the newly-reopened Wuhan International Plaza, home to boutiques of luxury brands such as Cartier and Louis Vuitton.
“The Wuhan International Plaza is very representative (of the city),” said Zhang Yu, 29. “So its reopening really makes me feel this city is coming back to life.”
Sunday’s figure of 31 new cases, including one locally transmitted infection, was down from 45 the previous day, the National Health Commission said.
As infections fall, policymakers are scrambling to revitalise an economy nearly paralysed by months-long curbs to control the spread of the flu-like disease.
On Monday, the central bank unexpectedly cut the interest rate on reverse repurchase agreements by 20 basis points, the largest in nearly five years.
The government is pushing businesses and factories to reopen, as it rolls out fiscal and monetary stimulus to spur recovery from what is feared to be an outright economic contraction in the quarter to March.
China’s exports and imports could worsen as the pandemic spreads, depressing demand both at home and abroad, Xin Guobin, the vice minister of industry and information technology, said on Monday.
The country has extended loans of 200 billion yuan (22.75 billion pounds) to 5,000 businesses, from 300 billion allocated to help companies as they resume work, Xin said.
Authorities in Ningbo said they would encourage national banks to offer preferential credit of up to 100 billion yuan to the eastern port city’s larger export firms. The city government will subsidize such loans, it said in a notice.
VIRUS CONCERNS
While new infections have fallen sharply from February’s peak, authorities worry about a second wave triggered by returning Chinese, many of them students.
China cut international flights massively from Sunday for an indefinite period, after it began denying entry to almost all foreigners a day earlier.
Average daily arrivals at airports this week are expected to be about 4,000, down from 25,000 last week, an official of the Civil Aviation Administration of China told a news conference in Beijing on Monday.
The return to work has also prompted concern about potential domestic infections, especially over carriers who exhibit no, or very mild, symptoms of the highly contagious virus.
Northwestern Gansu province reported a new case of a traveller from the central province of Hubei, who drove back with a virus-free health code, national health authorities said.
Hubei authorities say 4.6 million people in the province returned to work by Saturday, with 2.8 million of them heading for other parts of China.
Most of the departing migrant workers went to the southern provinces of Guangdong and Fujian, the eastern provinces of Zhejiang and Jiangsu, and northeast China.
In Hubei’s capital of Wuhan, more retail complexes and shopping streets reopened.
Electric carmaker Tesla Inc has also reopened a showroom in Wuhan, a company executive said on Weibo.
Shoppers queued 1-1/2 metres (5 ft) apart for temperature checks at Wuhan International Plaza, while flashing “green” mobile telephone codes attesting to a clean bill of health.
To be cleared to resume work, Wuhan residents have been asked to take nucleic acid tests twice.
“Being able to be healthy and leave the house, and meet other colleagues who are also healthy is a very happy thing,” said Wang Xueman, a cosmetics sales representative.
China is now making more than 100 million masks a day, up from 20 million before the coronavirus outbreak, and may start to export more to other countries
Mask shortages elsewhere once more raise the debate about an over-reliance on China, with critics pointing to a lack of US industrial policy
China was producing 116 million masks per day of February 29, including a mix of disposable and high-end masks like the American-designed N95 model worn by President Xi Jinping on his trip on Tuesday to Wuhan. Photo: Xinhua
The Liu family factory has been making diapers and baby products in the Chinese city of Quanzhou for over 10 years, but in February, for the first time, it started making face masks, as demand soared spectacularly due to the coronavirus outbreak.
The business – which employs 100 people in the Southeastern Fujian province – has added two production lines to make up to 200,000 masks a day.
And while the decision was primarily commercial, “encouragement” from the Chinese government – in the form of subsidies, lower taxes, interest-free loans, fast-track approvals for expansion and help alleviating labour shortages – made the decision an obvious one, said Mr Liu who preferred only to give his family name.
“The government is advocating an expansion in production,” Liu said. “With faster approvals, producers need to prioritise the government’s needs over exports.”
WHO declares coronavirus crisis a pandemic
The factory is one of thousands of refitted pop-ups around China making masks and other protective equipment for the first time, part of a massive industrial drive to respond to the spread of the coronavirus.
Before the outbreak, China already made about half the world’s supply of masks, at a rate of 20 million units a day. That rose to 116 million as of February 29, according to China’s state planning agency, a mix of disposable and high-end masks like the American-designed N95 model worn by President Xi Jinping on his trip on Tuesday to Wuhan, the epicentre of the outbreak.
This exponential jump is the result of a wartime-like shift in industrial policy, with Beijing directing its powerful state-owned enterprises to lead the nationwide mask-making effort, and the country’s sprawling manufacturing engine following their lead.
For me, this is the big advantage of China, the speed Thomas Schmitz
“For me, this is the big advantage of China, the speed,” said Thomas Schmitz, president of the China branch of Austrian engineering giant Andritz, which has seen a big uptick in demand for its wet wipe-making machines in recent weeks, also due to the virus. “When you need to run, people know how to run, and this is something which has been lost in other countries since their industrial heydays.”
Chinese oil and gas major Sinopec upped production of mask raw materials such as polypropylene and polyvinyl chloride in January. This week, it set up two production lines in Beijing to produce melt-blown non-woven fabric, intended to make four tonnes of the fabric each day, which can then be used to produce 1.2 million N95 respirators or six million surgical masks a day.
The maker of China’s new J-20 stealth fighter jet, Chengdu Aircraft Industry Group, repurposed part of its factory to design a mask production line, according to local media reports. The SichuanDaily said 258 of the company’s engineers spent three days fast-tracking development of an assembly line with more than 1,200 components.
Coronavirus: From mysterious origins to a global threat
More than 2,500 companies in China have reportedly started making masks, among them 700 technology companies including iPhone assembler Foxconn and smartphone makers Xiaomi and Oppo, in an extraordinary mobilisation of resources.
The result resembles “the war effort” in the middle of the last century in the United States and western Europe, but arguably no other nation could undergo such a transformation so quickly today.
It is a reminder of what can happen in a centrally-planned economy with a strong manufacturing base, but also brings into sharp focus some of the geopolitical issues which have characterised China’s at-times difficult relationship with the rest of the world, particularly the European Union and US, over the past couple of years.
China’s dominance in manufacturing has become all the more evident as the rest of the world scrambles to shore up their own dwindling medical supplies, leading many to wonder why the world is so dependent on it for vital supplies.
The lesson for Washington is not that we need to emulate the Chinese economic model, but rather that we need to better steward the industrial base in key sectors Rush Doshi
The Italian government, which is dealing with the highest number of coronavirus cases and deaths after China, is to take shipment of 1,000 ventilators, 2 million masks, 100,000 respirators, 200,000 protective suits and 50,000 testing kits from China.
Italian foreign minister Luigi Di Maio said after a phone call with Chinese counterpart Wang Yi, they had agreed the export deal in the same week that European neighbours France and Germany banned masks from being exported because of low domestic supplies.
The Italy export deal showed that “China is emerging as a global public goods provider as the US proves unable and unwilling to lead,” said Rush Doshi, the director of the China Strategy Initiative at the Washington-based Brookings Institute think tank.
“China’s ability to produce what is needed to fight coronavirus is not simply a product of its economic model – it’s also a product of its industrial capacity,” Doshi said. “The US once had this capacity too, but it has lost important parts of it. The lesson for Washington is not that we need to emulate the Chinese economic model, but rather that we need to better steward the industrial base in key sectors.”
The frustration is felt acutely by Michael Einhorn, president of medical equipment distributor Dealmed-Park Surgical in New York, who has been trying to source stock from China for weeks, “but cannot get straight answers” from vendors.
Einhorn said he placed an order with a private seller in China’s virus-stricken city last week, but that the goods had not been shipped.
“Everyone is running out here, people are panicking in hospitals and we want to be able to help our most important customers,” Einhorn said. “We are dealing with hospitals that do not have products, how in the United States of America in 2020 did this happen?”
With the number of confirmed coronavirus cases in China falling daily, it is not inconceivable that the sort of export deal struck with Italian leaders becomes commonplace, although for now, it deal can be chalked up as a significant public relations coup for Beijing.
The World Medical Association is unable to specify how many masks are required to supply frontline medical staff in virus-hit areas, but said that “this crisis should be a wake up call for politicians and societies to make the necessary investment in emergency preparedness and to look into the vulnerability of our supply chains”.
Australian-listed manufacturer Eagle Health announced on Friday that it had installed production lines at its Xiamen factory in southern China to make 300 million masks a year and said it had already received orders from China and would be securing further larger orders internationally.
The group, which normally makes products including amino acids, protein supplements and lozenges in China, said it would prioritise meeting the large domestic demand, but was aware of an impending global shortage.
Eagle Health has already commenced production of its first order of 3.2 million medical masks for the Yiling Hospital Management Group in China, a process which will take 10 days. It has other smaller orders from Chinese government agencies and expects to receive more orders outside China.
The decision to make more masks came from increased demand. These are opportunities. The global demand for high quality masks will be significant Xu Gang
“The decision to make more masks came from increased demand. These are opportunities,” said chief executive Xu Gang. “The global demand for high quality masks will be significant. Imagine when the schools open. The situation will take some time to peak.”
Last week, the Australian Dental Association said supplies of masks at many practices were expected to run out within four weeks. The Australian government has since arranged a supply of 54 million masks for both the dental and medical industries.
At the same time, the US only has 1 per cent of the 3.5 billion masks it would need to counter a serious outbreak, Bloomberg reported.
While China has no quota on the volume of masks that had to be hived off for local consumption, the government has said domestic demand needs to be prioritised.
Businesses are free to export but overseas demand has yet to explode like it has in China, said Fujian factory owner Liu.
Wendy Min, sales director of Pluscare, a manufacturer based near the virus’ epicentre in Hubei province, said her company is making 200,000 masks per day, much of which are sold to the government, with exports still restricted by partial lockdown of workers and cargo transport.
“We previously exported to Europe, South America and other parts of Asia,” Min said. “But at the moment we can’t export. We are trying to discuss this with the government, but we cannot wait any more – we have to export soon.”
Min said that while she was receiving countless cold calls up until last week from people in China looking for masks, these have stopped, perhaps unsurprising given the abundance in supplies becoming available.
An influx of Chinese-made masks, though, is likely to be welcomed in other virus-stricken parts of the world.
Self-quarantine of all international travellers to Beijing as China fights import of coronavirus
Miguel Luiz Gricheno, CEO of Brazilian mask manufacturer Destra, said that his company is making 30,000 masks a day, but cannot meet local demand due to a lack of supplies, including the non-woven fabric from which masks are made.
“In disposable masks, most Brazilian companies are paralysed due to the lack of raw materials,” Gricheno said. “With the arrival of the coronavirus in Brazil, the demand has increased a lot but the main raw material comes from abroad.”
However, a short-term supply fix will not answer underlying questions about how so many countries found themselves in such dire straits,meaning the geopolitical fallout of the coronavirus will be extensive.
Decades of weak industrial policy helped elect US President Donald Trump, who said he would bring manufacturing jobs back to America at China’s expense. While he has waged a bruising two-year trade war with China in response, the current situation shows just how difficult it will be to change the global manufacturing processes, which are so heavily controlled by China.
One of the great flaws of globalisation is that everyone wanted things cheaper, but did you compromise your health care infrastructure in the process? Stephen Roach
“In the guise of trying to improve efficiency and create value for price-sensitive consumers, we’ve created a global production network that is very difficult to unwind,” said Stephen Roach, a professor of economics at Yale University and a veteran China watcher. “One of the great flaws of globalisation is that everyone wanted things cheaper, but did you compromise your health care infrastructure in the process.
Reuters reported that Trump is considering invoking the emergency provisions of the Defence Production Act, which would allow the government to instruct companies to alter production to help address the domestic shortage of medical supplies like masks. If a company is producing 20 per cent N95 masks and 80 per cent standard masks, the White House could order them to rejig the ratio, an unnamed official said.
The New York Times reported on Wednesday that the White House is preparing an executive order that would allow the government to buy medical supplies from overseas in the hope that it will incentivise companies to make them within the US.
But these changes still do not give Trump the sort of sweeping powers enjoyed by Chinese counterpart Xi.
“When you have a pluralistic, democratic situation that Trump is overseeing, it becomes more unwieldy” to take the steps necessary to address a crisis situation, said Harry Broadman, chair of the emerging markets practise at the Berkeley Research Group and a senior US government official in the 1980s and 1990s.
“That is why I think Trump looks at Xi with envy, because he doesn’t have to deal with a disparity of views or democratic interests,” Broadman said. “I think Trump is at heart a bilateral guy, as you saw with the phase one [US-China] trade deal and the state-to-state purchases. That is why he likes dealing with [Russian President Vladimir] Putin and Xi, because each of them can move mountains. I think Trump is very envious of that ability.”
BEIJING/SINGAPORE (Reuters) – China reported on Wednesday its smallest number of coronavirus cases since January, lending weight to a prediction by its top medical adviser for the outbreak to end by April, but a global infectious diseases expert warned of the spread elsewhere.
Financial markets took heart from the outlook of the Chinese official, epidemiologist Zhong Nanshan, who said on Tuesday the number of new cases was falling in some provinces, and forecast the epidemic would peak this month, even as the death toll in China rose to more than 1,100 people.
World stocks, which had seen rounds of sell-offs over the virus, surged to record highs on hopes of a peak in cases. The Dow industrials, S&P 500 and Nasdaq all hit new highs, and Asian shares nudged higher on Wednesday.
But the World Health Organization (WHO) has warned that the epidemic poses a global threat akin to terrorism and one expert coordinating its response said while the outbreak may be peaking at its epicentre in China, it was likely to spread elsewhere in the world, where it had just begun.
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“It has spread to other places where it’s the beginning of the outbreak,” the official, Dale Fisher, head of the Global Outbreak Alert and Response Network coordinated by the WHO, said in an interview in Singapore.
“In Singapore, we are at the beginning of the outbreak.”
Singapore has reported 47 cases and worry about the spread is growing. Its biggest bank, DBS (DBSM.SI), evacuated 300 staff from its head office on Wednesday after a confirmed coronavirus case in the building.
Hundreds of cases have been reported in dozens of other countries and territories around the world, but only two people have died outside mainland China – one in Hong Kong and another in the Philippines.
WHO chief Tedros Adhanom Ghebreyesus said on Tuesday the world had to “wake up and consider this enemy virus as public enemy number one” and the first vaccine was 18 months away.
In China, total infections have hit 44,653, health officials said, including 2,015 new confirmed cases on Tuesday. That was the lowest daily rise in new cases since Jan. 30.
The number of deaths on the mainland rose by 97 to 1,113 by the end of Tuesday.
But doubts have been aired on social media about how reliable the figures are, after the government last week amended guidelines on the classification of cases.
‘STAY HOPEFUL’
The biggest cluster of cases outside China is aboard the Diamond Princess cruise ship quarantined off Japan’s port of Yokohama, with about 3,700 people on board. Japanese officials on Wednesday said 39 more people had tested positive for the virus, taking the total to 175.
One of the new cases was a quarantine officer.
Thailand said it was barring passengers from another cruise ship, MS Westerdam, from disembarking, the latest country to turn it away amid fears of the coronavirus, despite no confirmed infections on board.
“We try to stay hopeful,” American passenger Angela Jones told Reuters in a video recording. “But each day, that becomes a little bit more difficult, when country after country rejects us.”
Echoing the comparison with the fight against terrorism, China’s state news agency Xinhua said late on Tuesday the epidemic was a “battle that has no gunpowder smoke but must be won”.
The epidemic was a big test of China’s governance and capabilities and some officials were still “dropping the ball” in places where it was most severe, it said, adding: “This is a wake-up call.”
The government of Hubei, the central province at the outbreak’s epicentre, dismissed the provincial health commission’s Communist Party boss, state media said on Tuesday, amid mounting public anger over the crisis.
China’s censors had allowed criticism of local officials but have begun cracking down on reporting of the outbreak, issuing reprimands to tech firms that gave free rein to online speech, Chinese journalists said.
The pathogen has been named COVID-19 – CO for corona, VI for virus, D for disease and 19 for the year it emerged. It is suspected to have come from a market that illegally traded wildlife in Hubei’s capital of Wuhan in December.
The city of 11 million people remains under virtual lockdown as part of China’s unprecedented measures to seal infected regions and limit transmission routes.
Travel restrictions that have paralysed the world’s second-biggest economy have left Wuhan and other Chinese cities resembling ghost towns.
Even if the epidemic ends soon, it has taken a toll of China’s economy, with companies laying off workers and needing loans running into billions of dollars to stay afloat. Supply chains for makers of items from cars to smartphones have broken down.
ANZ Bank said China’s first-quarter growth would probably slow to 3.2% to 4.0%, down from a projection of 5.0%.
The likely slowdown in China could shave 0.1 to 0.2 percentage points off both euro zone and British growth this year, credit rating agency S&P Global estimated.
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CHINDIA ALERT: You'll be living in their world, very soon 