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07/02/2020

Coronavirus outbreak likely to hit Hong Kong, Thailand economies the hardest in Asia

  • Hong Kong and Thailand are likely to suffer most from the novel coronavirus outbreak because of close their economic ties with China
  • A drop in Chinese tourist arrivals and imports, as well as supply chain disruptions are likely to weigh on regional economy
Thailand’s economy could be one of the most affected by the coronavirus outbreak due to its close ties with China, especially in the tourism sector. Photo: Bloomberg
Thailand’s economy could be one of the most affected by the coronavirus outbreak due to its close ties with China, especially in the tourism sector. Photo: Bloomberg

Hong Kong and Thailand are likely to be the hardest hit Asian economies outside mainland China from the deadly coronavirus outbreak, according to analysts.

The 2019-nCoV, which had claimed the lives of nearly 640 people and infected more than 31,000 in mainland China by Friday, is viewed as even more damaging than the severe acute respiratory syndrome (Sars) epidemic in 2002-2003 because of prolonged factory closures and transport restrictions that have locked down many Chinese cities.

China has become more closely integrated with the rest of Asia since the Sars outbreak, meaning the disruptions to China’s industrial and export sectors, combined with a sharp drop in economic activity in the first quarter, will have significant repercussions across the region, particularly through tourism and trade, analysts said.

“A collapse in tourism arrivals from China will be the first shock wave for the rest of the region,” said Gareth Leather, senior Asia economist at Capital Economics. “Factory closures in China will affect the rest of the region by disrupting regional supply chains.”

A collapse in tourism arrivals from China will be the first shock wave for the rest of the region. Factory closures in China will affect the rest of the region by disrupting regional supply chainsGareth Leather

Hong Kong would likely be the most affected because of its status as a trade hub, its tight linkages to the Chinese economy and the sharp decline in tourism expenditure that is expected, UBS economist William Deng noted.

“Due to the risk of infection, domestic households significantly reduced such activities as dining out, shopping and entertainment,” Deng wrote in a recent note. He cut Hong Kong’s gross domestic product (GDP) growth forecast to minus 1.8 per cent for 2020, against his previous projection of a 0.5 per cent drop.

A community outbreak spread by human-to-human transmission has started in the city, said Professor Yuen Kwok-yung, a top microbiologist at the University of Hong Kong on Wednesday.

Thailand could be the next most affected due to its dependence on Chinese tourism. Outside Hong Kong and Macau, the country has the highest exposure to China as a share of GDP in the region.

China locks down Hangzhou, mega-city far from epicentre of coronavirus outbreak

ANZ Bank’s head of Asia research Khoon Goh said that the novel coronavirus could knock US$760 million from Thailand’s economy in the first quarter. Hong Kong could could see losses of US$1.4 billion. Travel services as a share of GDP were 11.2 per cent in Thailand and 9.4 per cent in Hong Kong.

“The Thai economy would expand at a slower rate in 2020 than previously forecast and much further below its potential due to the outbreak of coronavirus,” Bank of Thailand said in a statement after it slashed interest rates to a record low on Wednesday.

South Korean and Taiwanese businesses will also have negative spillover effects from the coronavirus outbreak because of supply chain disruptions and weaker consumer sentiment inside and outside China, analysts said.

South Korean car and tech companies that rely on parts from Chinese suppliers are exposed to potential production disruptions stemming from factory closures and the evacuation of Korean workers from China-based production lines, said Sean Hwang, corporate finance group analyst at Moody’s Investors Group.

Coronavirus: here are the places and airlines restricting travel to China
For instance, Hyundai Motor Company closed some if its South Korea-based plants on February 4 because of a shortage of wiring harnesses.
Korean customers are also limiting their trips to bricks-and-mortar retail stores such as E Mart and Lotte Shopping to avoid crowds amid the outbreak, potentially leading to a significant decline in revenue and earnings, Hwang said.
Although Singapore is not as closely tied to China as Hong Kong, the city state could still see a knock-on effect from China’s expected near-term downturn, as its economy has become much more integrated with the world’s second largest economy since the Sars outbreak.
The number of Chinese tourists rose six times from 568,000 in 2003 to 3.4 million in 2018, said Irvin Seah, senior economist at DBS Bank.
Coronavirus outbreak: global businesses shut down operations in China
“We expect a decline of about 1 million tourists or about SGD1 billion (US$722 million) of lost tourism receipts for every three months of travel ban,” Seah said. “We have lowered our full-year GDP growth forecast to 0.9 per cent, down from 1.4 per cent previously.”
Taiwan has banned Chinese visitors as well as foreigners who have visited Hong Kong and Macau from entering the island due the coronavirus. International cruise ships are also unable to dock on the island, which will lead to at least 112 liner visits cancelled by the end of March, affecting around 144,000 passengers, said the Taiwan International Ports Corporation.
Capital Economics’ Leather said the economic impact on Taiwan from 2019-nCoV could stand out from the rest of Asia, as it had the most exposure in value-added, intermediate exports to China – 18 per cent of GDP.
20 coronavirus infections confirmed on cruise ship in Japan, as thousands remain under quarantine
Elsewhere, Malaysia’s commodity driven trade growth this year has been threatened by the almost 20 per cent fall in crude oil prices, a decline triggered by fears that the coronavirus outbreak would dampen China’s imports. Malaysia’s purchasing managers’ index, a survey of manufacturers, dropped to 48.8 in January from 50.0 the prior month prior, data released this week showed. The drop was blamed on slowing output, with new orders dropping the most since September amid a decline in exports.
“The Bank Negara Malaysia’s surprising policy rate cut at the last meeting on 22 January, just around the time the coronavirus started to dominate headlines, tells us that the central bank is ahead of the curve in recognising the risk,” said Prakash Sakpal, Asia economist at ING Bank said.
India and Indonesia will be the least affected given the small contribution the tourism sector makes to their economies, and the low share of visitors from China, ANZ’s Goh said.
Source: SCMP

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23/12/2019

China presses for nuclear talks in last days till North Korea’s deadline for US

  • Summit between Chinese, South Korean and Japanese leaders could yield results for future of Korean peninsula, analyst says
North Korea has promised an unwelcome “Christmas present” if the US does not show the “right attitude” for talks. Photo: KCNA
North Korea has promised an unwelcome “Christmas present” if the US does not show the “right attitude” for talks. Photo: KCNA
Chinese President Xi Jinping has again stressed the need for tensions on the Korean peninsula to be resolved through dialogue, as the deadline looms in North Korea’s threat to give the United States an unwelcome “Christmas gift”
.

With just over a week to go until Pyongyang’s year-end deadline for Washington to change what it says a policy of hostility, Xi held separate talks with South Korean President Moon Jae-in and Japanese Prime Minister Shinzo Abe in Beijing on Monday.

Moon and Abe will also join Chinese Premier Li Keqiang for a trilateral summit in Chengdu, Sichuan province, on Tuesday.

The first trilateral leadership talks took place in 2008, but were not held in 2013 and 2014, or in 2016 and 2017.

Xi said China and South Korea “both insist on maintaining peace and stability on the peninsula, and advocate solving problems through dialogue and consultation”, state news agency Xinhua reported on Monday.
“China supports South Korea in continuing to improve its relationship with

North Korea,

and injecting impetus for the Korean peninsula peace talks,” the report said.

Moon said the suspension of talks between the US and North Korea and heightened tensions along the peninsula “are not beneficial to both our countries and North Korea”, according to South Korean news agency Yonhap.

Moon also said that China had played an “important role” in efforts for the denuclearise the peninsula, the report said.

North Korea has signalled impatience over the stalled talks with the US, and the fading hopes for an end to Washington’s economic sanctions.

In April, North Korean leader Kim Jong-un said that he would “wait” until the end of the year to decide whether the US had the “right attitude” to allow a resumption of negotiations, but no signs of further talks have emerged.

Then earlier this month Pyongyang warned that Washington would receive a “Christmas gift”, and US actions would determine whether the present would be good or bad.

In an apparent sign of frustration with the US, North Korean news agency KCNA reported on Sunday that Kim held a meeting of the Workers’ Party of Korea to “bolster the overall armed forces of the country” to deal with the “the fast-changing situation”.

The US imposed crippling sanctions on North Korea’s economy in 2017, though many countries, including China, South Korea and Japan, have also tightened measures against the North.

South Korea and Japan both scaled back people-to-people links in 2016, China banned coal exports to the North in 2017. Earlier this year, Trump thanked China and Russia for maintaining sanctions against Pyongyang.

As diplomats make last-ditch attempts to stop renewed confrontation, US special envoy for North Korea Stephen Biegun shuttled around the region last week, meeting senior officials in China, South Korea and Japan. Biegun urged North Korea to return to negotiations, and said the US “does not have a deadline” for talks.

China and Russia also proposed last week that the United Nations Security Council 

lift some sanctions

, saying it was necessary to break the deadlock.

Xi’s meeting with Moon also comes as Beijing tries to mend ties with Seoul to prevent neighbouring nations from getting closer to Washington.
Relations between China and South Korea deteriorated in 2017 after Seoul deployed a US-led missile defence system known as THAAD, which Beijing deemed as a security threat to its own territory.
On Monday, both Xi and Moon said in their meeting that they looked forward to improving relations between their countries.
“We have been friends and partners that have continued close cooperation,” Xi said. “We have a wide range of common understandings in various fields, including on further developing bilateral relations, facilitating regional peace, stability and prosperity, and defending multilateralism and a free trade system.”
Sun Xingjie, a North Korea specialist at Jilin University, said the US signal was “very clear” in Beigun’s comments.
“They still want to continue discussions,” he said.
Sun also said the talks in Chengdu on Tuesday would likely play an important role in the future of resolving problems on the Korean peninsula.
“After returning to the platform these last couple years, I believe this will become an important, normalised place for discussions. Whatever problems they run into, the platform should continue to move forward,” Sun said.
Source: SCMP

Posted in Beijing, Chengdu, China alert, Chinese, Chinese premier Li Keqiang, Chinese President Xi Jinping, deadline, denuclearise, frustration, Japanese, Japanese Prime Minister, Japanese Prime Minister Shinzo Abe, Jilin University, Korean peninsula, leaders, North Korea, nuclear talks, President Moon Jae-in, presses, Pyongyang, Russia, sichuan province, South Korean, South Korean President, Trump, Uncategorized, United Nations Security Council, United Nations Security Council (UNSC), United States, US, Washington | Leave a Comment »

02/12/2019

Factbox – The world’s biggest electric vehicle battery makers

(Reuters) – Asian companies dominate the market for electric vehicle (EV) batteries and they are expanding their production capacity in Europe, China and the United States in a fight to win lucrative contracts from global automakers.

Some carmakers worry, however, there won’t be enough batteries for all the EVs they plan to launch in the coming years and a bitter row between South Korea’s SK Innovation and LG Chem risks exacerbating the potential shortfall.

Below are details of the world’s leading EV battery makers with details of their customers and expansion plans:

CATL

China’s Contemporary Amperex Technology (CATL), the world’s biggest EV battery maker, counts BMW (BMWG.DE), Volkswagen (VOWG_p.DE), Daimler (DAIGn.DE) – which makes Mercedes cars – Volvo, Toyota Motor Corp (7203.T) and Honda Motor Co (7267.T) among its customers.

The company emerged as a major force partly thanks to Beijing’s policy of only subsidising vehicles equipped with Chinese batteries in the world’s biggest EV market. Beijing is phasing out EV subsidies next year.

CATL, which operates factories in China, is building its first overseas plant in Germany and is considering a U.S. factory.

PANASONIC CORP (6752.T)

Japan’s Panasonic, a supplier of U.S. EV pioneer Tesla (TSLA.O), said it has installed equipment to ramp up production at Tesla’s Nevada plant to 35 GWh from its current production of around 30 GWh as of late October. Panasonic has said it is investing about $1.6 billion in the factory.

Panasonic also produces EV batteries in Japan, China and plans to shift some of its plants to a new joint venture with Toyota. Panasonic’s clients also include Honda and Ford Motor Company (F.N).

For a graphic of expansion plans: tmsnrt.rs/35tFmOL

BYD CO LTD (002594.SZ)

China’s BYD, which is backed by U.S. investor Warren Buffett, is also one of the world’s biggest EV battery makers. It mainly uses them in-house for its own cars and buses. BYD said last year it is was considering cell production in Europe.

LG CHEM LTD (051910.KS)

The South Korean firm was an early industry mover, winning a contract to supply General Motor’s (GM.N) Volt in 2008. It also supplies Ford, Renault (RENA.PA), Hyundai Motor (005380.KS), Tesla, Volkswagen and Volvo.

It is investing 3.3 trillion won ($2.8 billion) to build and expand production facilities near Tesla’s plant in Shanghai. It has a joint venture (JV) in China with Geely Automobile Holdings (0175.HK), which makes Volvos, and is in talks with other carmakers about JVs in major markets.

The firm is considering building a second U.S. factory in addition to its facility in Michigan and is expanding its plant in Poland.

SAMSUNG SDI CO LTD (006400.KS) Samsung SDI an affiliate of South Korean tech giant Samsung Electronics (005930.KS), has EV battery plants in South Korea, China and Hungary, which supply customers such as BMW (BMWG.DE), Volvo and Volkswagen. Samsung SDI is investing about 1.2 billion euros ($1.3 billion) to expand its factory in Hungary though the EU is investigating whether Budapest’s financial support complies with the bloc’s state aid rules.

Samsung started production last year on the Hungary plant, which will produce batteries for 50,000 EVs a year.

SK INNOVATION CO LTD (096770.KS) LG Chem’s cross-town rival SK Innovation supplies batteries to Volkswagen, Daimler and Kia Motors (000270.KS), as well as Jaguar Land Rover [TAMOJL.UL] and Ferrari (RACE.MI).

An oil refiner that came to the battery industry late, SKI is investing about $3.9 billion to build three plants in the United States, China and Hungary, with a goal of expanding its annual production capacity to 33 GWh by 2022.

SKI currently operates one battery factory in South Korea, with a capacity of 4.7 GWh annually.

It set up a joint venture with Beijing Automotive Industry Corporation (BAIC) of China in August 2018 and another Chinese partner. It is in talks with Volkswagen about another battery JV and is building a $1.7 billion factory in the U.S. state of Georgia, not far from Volkswagen’s Chattanooga plant.

Source: Reuters

Posted in automakers, batteries, battery, Beijing Automotive Industry Corporation (BAIC), Beijing’s, biggest, BMW, BMW (BMWG.DE), Budapest’s, BYD, BYD CO LTD (002594.SZ), Chattanooga, China alert, Chinese, Contemporary Amperex Technology (CATL), contracts, Daimler, Electric vehicle, equipped, Europe, EV pioneer, Factory, Ferrari (RACE.MI), firm, Ford, Ford Motor Company (F.N), Geely Automobile Holdings (0175.HK), General Motor’s (GM.N), Georgia, Germany, global, Honda Motor Co (7267.T), Hungary, Hyundai Motor (005380.KS), industry mover, Japan, Japan’s, Kia Motors (000270.KS), LG Chem, LG CHEM LTD (051910.KS), Makers, Mercedes, Michigan, Nevada, Panasonic, PANASONIC CORP (6752.T), Plant, Poland, policy, Renault (RENA.PA), Rover [TAMOJL.UL], Samsung Electronics (005930.KS), SAMSUNG SDI CO LTD (006400.KS), Shanghai, SK Innovation, SK INNOVATION CO LTD (096770.KS), South Korea, South Korean, subsidising, Tesla (TSLA.O), Toyota Motor Corp (7203.T), U.S., U.S. investor, Uncategorized, United States, vehicles, Volkswagen, Volkswagen (VOWG_p.DE), Volt, Volvo, Warren Buffett, world's | Leave a Comment »

21/05/2019

North Korean women ‘forced into sex slavery’ in China – report

Prostitute in a Shanghai back alley (credit: Lei Han)Image copyright KOREA FUTURE INITIATIVE
Image caption The trade of North Korean women in China is said to be worth $100m a year for criminal organisations

Thousands of North Korean women and girls are being forced to work in the sex trade in China, according to a new report by a London-based rights group.

They are often abducted and sold as prostitutes, or compelled to marry Chinese men, says the Korea Future Initiative.

The trade is worth $100m (£79m) a year for criminal organisations, it says.

The women are often trapped because China repatriates North Koreans, who then face torture at home, it says.

“Victims are prostituted for as little as 30 Chinese yuan ($4.30; £3.40), sold as wives for just 1,000 yuan, and trafficked into cybersex dens for exploitation by a global online audience,” the report’s author Yoon Hee-soon said.

The girls and women in question are usually aged between 12 and 29, but can sometimes be younger, the report said.

They are coerced, sold, or abducted in China or trafficked directly from North Korea. Many are sold more than once and are forced into at least one form of sexual slavery within a year of leaving their homeland, it adds.

Many are enslaved in brothels in districts in north-east China with large migrant worker populations.

The girls – some as young as nine – and women working in the cybersex industry are forced to perform sex acts and are sexually assaulted in front of webcams. Many of the subscribers are thought to be South Korean.

Women forced into marriage were mostly sold in rural areas for 1,000 to 50,000 yuan, and were raped and abused by their husbands.

Media caption North Korean defectors who had to escape twice

The group collected its information from victims in China and exiled survivors in South Korea.

One woman, named as Ms Pyon from Chongjin City, North Korea, is quoted as saying in the report:

“I was sold [to a brothel] with six other North Korean women at a hotel. We were not given much food and were treated badly…After eight months, half of us were sold again. The broker did bad things to me.”

“When I arrived [at the new brothel] I had bruises on my body. [The broker] was beaten then stabbed in the legs by some members of the gang.”

Another, Ms Kim, said: “There are many South Koreans [in Dalian, China]…We put advertising cards under their doors [in hotels]…The cards are in the Korean-language and advertise what we offer…We are mostly taken to bars [by the pimp].

“South Korean companies want [North Korean prostitutes] for their businessmen…Prostitution was my first experience of meeting a South Korean person.”

Source: The BBC

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