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.
Image copyright AFP / GETTYImage caption Shoppers walking past a broadcast of Chinese Premier Li Keqiang delivering his speech at the opening of the NPC on Thursday
China’s ruling Communist Party has set in motion a controversial national security law for Hong Kong, a move seen as a major blow to the city’s freedoms.
The law to ban “treason, secession, sedition and subversion” could bypass Hong Kong’s lawmakers.
Critics say China is breaking its promise to allow Hong Kong freedoms not seen elsewhere in China.
It is likely to fuel public anger and may even trigger fresh protests and demands for democratic reform.
The plan was submitted at the annual National People’s Congress (NPC), which largely rubber-stamps decisions already taken by the Communist leadership, but is still the most important political event of the year.
Hong Kong, a semi-autonomous region and an economic powerhouse, was always meant to have introduced such laws after the handover from British control to Chinese rule in 1997.
After last year’s wave of sustained and violent protest, Beijing is now attempting to push them through, arguing “law-based and forceful measures” must be taken to “prevent, stop and punish” such protests in the future.
On Friday, Hong Kong’s government said it would co-operate with Beijing to enact the law, adding it would not affect the city’s freedoms.
That article says Hong Kong “must improve” national security, before adding: “When needed, relevant national security organs of the Central People’s Government will set up agencies in Hong Kong to fulfil relevant duties to safeguard national security in accordance with the law.”
China could essentially place this law into Annex III of the Basic Law, which covers national laws that must be implemented in Hong Kong – either by legislation, or decree.
Addressing the congress, Premier Li Keqiang spoke of the economic impact of the coronavirus and on Hong Kong and Macau said: “We’ll establish sound legal systems and enforcement mechanisms for safeguarding national security in the two Special Administrative Regions.”
What do opponents say the dangers are?
Hong Kong is what is known as a “special administrative region” of China.
It has observed a “one country, two systems” policy since Britain returned sovereignty in 1997, which has allowed it certain freedoms the rest of China does not have.
Pro-democracy activists fear that China pushing through the law could mean “the end of Hong Kong” – that is, the effective end of its autonomy and these freedoms.
Last year’s mass protests in Hong Kong were sparked by a bill that would have allowed extraditions to mainland China.
Media caption Former Hong Kong governor Chris Patten: “UK should tell China this is outrageous”
The bill was paused, then withdrawn – but the protests continued until the virus outbreak at the end of the year.
The US has also weighed in, with President Trump saying the US would react strongly if it went through – without giving details.
It is currently considering whether to extend Hong Kong’s preferential trading and investment privileges.
Why is China doing this?
Mr Wang said the security risks had become “increasingly notable” – a reference to last year’s protests.
“Considering Hong Kong’s situation at present, efforts must be made at the state-level to establish and improve the legal system and enforcement mechanisms,” he is quoted as saying in state media.
Media caption The BBC’s Helier Cheung on Hong Kong’s 2019 protests
Beijing may also fear September’s elections to Hong Kong’s legislature.
If last year’s success for pro-democracy parties in district elections is repeated, government bills could potentially be blocked.
What is Hong Kong’s legal situation?
Hong Kong was under British control for more than 150 years up to 1997.
The British and Chinese governments signed a treaty – the Sino-British Joint Declaration – that agreed Hong Kong would have “a high degree of autonomy, except in foreign and defence affairs”, for 50 years.
This was enshrined in the Basic Law, which runs out in 2047.
Image copyright GETTY IMAGESImage caption The village made headlines after photos showed people scaling ladders to get home
They used to call an 800m-high cliff home, but dozens of villagers in China’s Sichuan province have now been relocated to an urban housing estate.
Atulie’er village became famous after photos emerged showing adults and children precariously scaling the cliff using just rattan ladders.
Around 84 households have now been moved into newly built flats as part of a local poverty alleviation campaign.
It’s part of a bigger national campaign to end poverty by the end of 2020.
‘So happy I got a house’
Atulie-er village made headlines in 2016 when it was revealed that its villagers had to scale precarious ladders to get home, carrying babies and anything the village needed.
The households have now been moved to the county town of Zhaojue, around 70km away.
They will be rehoused in furnished apartment blocks, which come in models of 50, 75 and 100 sq m – depending on the number of people in each household.
It’ll be a big change for many of these villagers, who are from the Yi minority and have lived in Atulie-er for generations.
According to Mark Wang, a human geography professor at the University of Melbourne, such housing schemes are often heavily subsidised by the government, typically up to 70%. However, in some instances families have been unable to afford the apartments despite the subsidies.
“For some really poor villages, the 30% may still be difficult for them to pay, so they end up having to borrow money – [ironically] causing them even more debt,” he told BBC News.
“For the poorest, it’s a big financial burden and so in some instances, they might have to stay.”
According to Chinese state media outlet China Daily, each person will have to pay 2,500 yuan ($352; £288) for this particular move – so for a family of four, the cost would come up to 10,000 yuan.
Image copyright GETTY IMAGESImage caption This is the journey the villagers had to make to get home
This is quite a low price, says Mr Wang, as he had heard of people having to pay up to 40,000 yuan for other relocation projects.
Mr Wang says in most poverty resettlement campaigns, villagers are given a choice whether or not to move, and are not usually moved into cities from the countryside.
“In most instances it’s a move to a county town or a suburb. So it’s not like they’re moving to a big city. Not everyone wants an urban life and most of those who do would have already left these villages and moved to the big cities,” he says.
“Usually the government [puts a limit] on the resettlement distance. This is in most people’s favour because it means they can keep their farm land, so that’s very attractive.”
The Atulie’er villagers will share this new apartment complex with impoverished residents across Sichuan province.
Image copyright CGTN/YOUTUBEImage caption The villagers will be living in these apartment buildings
Around 30 households will remain in the Atulie’er village- which is set to turn into a tourism spot.
According to Chinese state media outlet China Daily, these households will effectively be in charge of local tourism, running inns and showing tourists around.
The county government has ambitious plans – planning to install a cable car to transport tourists to the village and to develop some surrounding areas. An earlier report said there were plans to turn the village into a vacation resort, with state media saying the state would pump 630 million yuan into investment.
Though these developments are likely to bring more jobs to the area, it’s not clear what safeguards are in place to make sure that the site’s ecological areas are protected and not at risk of being overdeveloped.
Media caption Do people in China’s rural communities think poverty reduction can work?
Chinese President Xi Jinping has declared that China will eradicate poverty in China by 2020.
There’s no one standard definition of poverty across all of China, as it differs from province to province.
One widely quoted national standard is 2,300 yuan ($331; £253) net income a year. Under that standard, there were around 30 million people living in poverty across the whole of China in 2017.
But the 2020 deadline is approaching fast – and Mr Wang says the plan could be derailed by the virus outbreak.
“Even without Covid-19 it would be hard to meet this deadline and now realistically, it has made it even more difficult.”
Image copyright GETTY IMAGESImage caption The Chinese city of Wuhan recently lifted its strict quarantine measures
The Chinese city of Wuhan, where the coronavirus originated last year, has raised its official Covid-19 death toll by 50%, adding 1,290 fatalities.
Wuhan officials attributed the new figure to updated reporting and deaths outside hospitals. China has insisted there was no cover-up.
It has been accused of downplaying the severity of its virus outbreak.
Wuhan’s 11 million residents spent months in strict lockdown conditions, which have only recently been eased.
The latest official figures bring the death toll in the city in China’s central Hubei province to 3,869, increasing the national total to more than 4,600.
China has confirmed nearly 84,000 coronavirus infections, the seventh-highest globally, according to Johns Hopkins University data.
What’s China’s explanation for the rise in deaths?
In a statement released on Friday, officials in Wuhan said the revised figures were the result of new data received from multiple sources, including records kept by funeral homes and prisons.
Deaths linked to the virus outside hospitals, such as people who died at home, had not previously been recorded.
Media caption Learn how Wuhan dealt with the lockdown
The “statistical verification” followed efforts by authorities to “ensure that information on the city’s Covid-19 epidemic is open, transparent and the data [is] accurate”, the statement said.
It added that health systems were initially overwhelmed and cases were “mistakenly reported” – in some instances counted more than once and in others missed entirely.
A shortage of testing capacity in the early stages meant that many infected patients were not accounted for, it said.
A spokesman for China’s National Health Commission, Mi Feng, said the new death count came from a “comprehensive review” of epidemic data.
In its daily news conference, the foreign ministry said accusations of a cover-up, which have been made most stridently on the world stage by US President Donald Trump, were unsubstantiated. “We’ll never allow any concealment,” a spokesman said.
Why are there concerns over China’s figures?
Friday’s revised figures come amid growing international concern that deaths in China have been under-reported. Questions have also been raised about Beijing’s handling of the epidemic, particularly in its early stages.
In December 2019, Chinese authorities launched an investigation into a mysterious viral pneumonia after cases began circulating in Wuhan.
China reported the cases to the World Health Organization (WHO), the UN’s global health agency, on 31 December.
But WHO experts were only allowed to visit China and investigate the outbreak on 10 February, by which time the country had more than 40,000 cases.
The mayor of Wuhan has previously admitted there was a lack of action between the start of January – when about 100 cases had been confirmed – and 23 January, when city-wide restrictions were enacted.
Around that time, a doctor who tried to warn his colleagues about an outbreak of a Sars-like virus was silenced by the authorities. Dr Li Wenliang later died from Covid-19.
Wuhan’s death toll increase of almost exactly 50% has left some analysts wondering if this is all a bit too neat.
For months questions have been asked about the veracity of China’s official coronavirus statistics.
The inference has been that some Chinese officials may have deliberately under-reported deaths and infections to give the impression that cities and towns were successfully managing the emergency.
If that was the case, Chinese officials were not to know just how bad this crisis would get in other countries, making its own figures now seem implausibly small.
The authorities in Wuhan, where the first cluster of this disease was reported, said there had been no deliberate misrepresentation of data, rather that a stabilisation in the emergency had allowed them time to revisit the reported cases and to add any previously missed.
That the new death toll was released at the same time as a press conference announcing a total collapse in China’s economic growth figures has led some to wonder whether this was a deliberate attempt to bury one or other of these stories.
Then again, it could also be a complete coincidence.
China has been pushing back against US suggestions that the coronavirus came from a laboratory studying infectious diseases in Wuhan, the BBC’s Barbara Plett Usher in Washington DC reports.
US President Donald Trump and some of his officials have been flirting with the outlier theory in the midst of a propaganda war with China over the origin and handling of the pandemic, our correspondent says.
Mr Trump this week halted funding for the World Health Organization (WHO), accusing it of making deadly mistakes and overly trusting China.
“Do you really believe those numbers in this vast country called China, and that they have a certain number of cases and a certain number of deaths; does anybody really believe that?” Mr Trump said at the White House on Wednesday.
On Thursday, UK Foreign Secretary Dominic Raab said: “We’ll have to ask the hard questions about how [coronavirus] came about and how it couldn’t have been stopped earlier.”
But China has also been praised for its handling of the crisis and the unprecedented restrictions that it instituted to slow the spread of the virus.
Image copyright GETTY IMAGESImage caption The Chinese city of Wuhan recently lifted its strict quarantine measures
The Chinese city of Wuhan, where the coronavirus originated last year, has raised its official Covid-19 death toll by 50%, adding 1,290 fatalities.
Wuhan officials attributed the new figure to updated reporting and deaths outside hospitals. China has insisted there was no cover-up.
It has been accused of downplaying the severity of its virus outbreak.
Wuhan’s 11 million residents spent months in strict lockdown conditions, which have only recently been eased.
The latest official figures bring the death toll in the city in China’s central Hubei province to 3,869, increasing the national total to more than 4,600.
China has confirmed nearly 84,000 coronavirus infections, the seventh-highest globally, according to Johns Hopkins University data.
What’s China’s explanation for the rise in deaths?
In a statement released on Friday, officials in Wuhan said the revised figures were the result of new data received from multiple sources, including records kept by funeral homes and prisons.
Deaths linked to the virus outside hospitals, such as people who died at home, had not previously been recorded.
Media caption Learn how Wuhan dealt with the lockdown
The “statistical verification” followed efforts by authorities to “ensure that information on the city’s Covid-19 epidemic is open, transparent and the data [is] accurate”, the statement said.
It added that health systems were initially overwhelmed and cases were “mistakenly reported” – in some instances counted more than once and in others missed entirely.
A shortage of testing capacity in the early stages meant that many infected patients were not accounted for, it said.
A spokesman for China’s National Health Commission, Mi Feng, said the new death count came from a “comprehensive review” of epidemic data.
In its daily news conference, the foreign ministry said accusations of a cover-up, which have been made most stridently on the world stage by US President Donald Trump, were unsubstantiated. “We’ll never allow any concealment,” a spokesman said.
Why are there concerns over China’s figures?
Friday’s revised figures come amid growing international concern that deaths in China have been under-reported. Questions have also been raised about Beijing’s handling of the epidemic, particularly in its early stages.
In December 2019, Chinese authorities launched an investigation into a mysterious viral pneumonia after cases began circulating in Wuhan.
China reported the cases to the World Health Organization (WHO), the UN’s global health agency, on 31 December.
But WHO experts were only allowed to visit China and investigate the outbreak on 10 February, by which time the country had more than 40,000 cases.
The mayor of Wuhan has previously admitted there was a lack of action between the start of January – when about 100 cases had been confirmed – and 23 January, when city-wide restrictions were enacted.
Around that time, a doctor who tried to warn his colleagues about an outbreak of a Sars-like virus was silenced by the authorities. Dr Li Wenliang later died from Covid-19.
Wuhan’s death toll increase of almost exactly 50% has left some analysts wondering if this is all a bit too neat.
For months questions have been asked about the veracity of China’s official coronavirus statistics.
The inference has been that some Chinese officials may have deliberately under-reported deaths and infections to give the impression that cities and towns were successfully managing the emergency.
If that was the case, Chinese officials were not to know just how bad this crisis would get in other countries, making its own figures now seem implausibly small.
The authorities in Wuhan, where the first cluster of this disease was reported, said there had been no deliberate misrepresentation of data, rather that a stabilisation in the emergency had allowed them time to revisit the reported cases and to add any previously missed.
That the new death toll was released at the same time as a press conference announcing a total collapse in China’s economic growth figures has led some to wonder whether this was a deliberate attempt to bury one or other of these stories.
Then again, it could also be a complete coincidence.
But China has also been praised for its handling of the crisis and the unprecedented restrictions that it instituted to slow the spread of the virus. WHO Director General Dr Tedros Adhanom Ghebreyesus has hailed China for the “speed with which [it] detected the outbreak” and its “commitment to transparency”.
US President Donald Trump this week halted funding for the WHO, accusing it of making deadly mistakes and overly trusting China.
“Do you really believe those numbers in this vast country called China, and that they have a certain number of cases and a certain number of deaths; does anybody really believe that?” Mr Trump said at the White House on Wednesday.
On Thursday, UK Foreign Secretary Dominic Raab said: “We’ll have to ask the hard questions about how [coronavirus] came about and how it couldn’t have been stopped earlier.”
China’s economy shrank for the first time in decades in the first quarter of the year, as the virus forced factories and businesses to close.
The world’s second biggest economy contracted 6.8% according to official data released on Friday.
The financial toll the coronavirus is having on the Chinese economy will be a huge concern to other countries.
China is an economic powerhouse as a major consumer and producer of goods and services.
This is the first time China has seen its economy shrink in the first three months of the year since it started recording quarterly figures in 1992.
“The GDP contraction in January-March will translate into permanent income losses, reflected in bankruptcies across small companies and job losses,” said Yue Su at the Economist Intelligence Unit.
Last year, China saw healthy economic growth of 6.4% in the first quarter, a period when it was locked in a trade war with the US.
In the last two decades, China has seen average economic growth of around 9% a year, although experts have regularly questioned the accuracy of its economic data.
Its economy had ground to a halt during the first three months of the year as it introduced large-scale shutdowns and quarantines to prevent the virus spread in late January.
As a result, economists had expected bleak figures, but the official data comes in slightly worse than expected.
Among other key figures released in Friday’s report:
Factory output was down 1.1% for March as China slowly starts manufacturing again.
Retail sales plummeted 15.8% last month as many of shoppers stayed at home.
Unemployment hit 5.9% in March, slightly better than February’s all-time high of 6.2%.
Analysis: A 6% expansion wiped out
Robin Brant, BBC News, Shanghai
The huge decline shows the profound impact that the virus outbreak, and the government’s draconian reaction to it, had on the world’s second largest economy. It wipes out the 6% expansion in China’s economy recorded in the last set of figures at the end of last year.
Beijing has signalled a significant economic stimulus is on the way as it tries to stabilise its economy and recover. Earlier this week the official mouthpiece of the ruling Communist Party, the People’s Daily, reported it would “expand domestic demand”.
But the slowdown in the rest of the global economy presents a significant problem as exports still play a major role in China’s economy. If it comes this will not be a quick recovery.
On Thursday the International Monetary Fund forecast China’s economy would avoid a recession but grow by just 1.2% this year. Job figures released recently showed the official government unemployment figure had risen sharply, with the number working in companies linked to export trade falling the most.
China has unveiled a range of financial support measures to cushion the impact of the slowdown, but not on the same scale as other major economies.
“We don’t expect large stimulus, given that that remains unpopular in Beijing. Instead, we think policymakers will accept low growth this year, given the prospects for a better 2021,” said Louis Kuijs, an analyst with Oxford Economics.
Since March, China has slowly started letting factories resume production and letting businesses reopen, but this is a gradual process to return to pre-lockdown levels.
Media caption Why does China’s economy matter to you?
China relies heavily on its factories and manufacturing plants for economic growth, and has been dubbed “the world’s factory”.
Stock markets in the region showed mixed reaction to the Chinese economic data, with China’s benchmark Shanghai Composite index up 0.9%.
“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.
Some 460,000 Chinese firms shut in the first quarter amid fallout from the coronavirus
Registration of new firms between January and March fell 29 per cent from a year earlier
Many Chinese businesses are struggling from the economic fallout of the coronavirus. Photo: Reuters
More than 460,000 Chinese firms closed permanently in the first quarter as the coronavirus pandemic pummeled the world’s second largest economy, with more than half of them having operated for under three years, corporate registration data shows.
The closures comprised of businesses whose operating licenses had been revoked, as well as those who had terminated operations themselves, and included 26,000 in the export sector, according to Tianyancha, a commercial database that compiles public records.
At the same time, the pace of new firms being established slowed significantly. From January to March, around 3.2 million businesses were set up, a 29 per cent drop from a year earlier.
Most of these new companies were in traditional centres of economic power, such as Guangdong province in southern China, and close to half of them were in distribution or retail.
Coronavirus: Is the gig economy dead, and should the self-employed worry?
The number of business closures underlines the challenges facing China as it tries to revive its economy, which is at risk of a contraction in the first quarter for the first time since 1976.
“China has managed to get the Covid-19 outbreak largely under control and domestic supply disruptions have now mostly dissipated,” Yao Wei and Michelle Lam, economists from French bank Societe Generale, said in a recent note.
“However, there are signs of lasting damage to domestic demand, and on top of that the external shock resulting from widespread lockdowns in other major economies is arriving fast and furious.”
In Dongguan, a once thriving industrial hub in the Pearl River Delta, rows of empty shops and closed factories are becoming a noticeable feature of the landscape as companies grapple with slumping international demand.
Coronavirus: Chinese companies cut salaries and staff in industries hit hardest by Covid-19
In March, a local export-oriented manufacturer of tote bags and toys in the city, Dongguan Fantastic Toy Company, collapsed after overseas orders dried up, leaving some workers with unpaid salaries, the local labour authority said last month. The government has ordered the factory’s landlord to pay the outstanding wages.
Chinese business owners who can no longer afford to maintain operations face a number of hurdles before they can walk away from a company.
If an insolvent firm wants to cancel its company registration, it needs to go through bankruptcy procedures or show a liquidation report confirming it had no unpaid debt or other obligations.
Once shareholders or creditors file for bankruptcy, it can take months for courts to accept the case, followed by a long process of verification, creditors’ meetings and asset sales, said Li Haifeng, a partner at Baker McKenzie FenXun.
A new phase of coronavirus blame game: what is the legacy of Covid-19 on global supply chains?
“I expect a surge shortly after the situation settles down. We know many enterprises are already on the verge of bankruptcy. It’s just that they don’t have to declare or file for bankruptcy immediately,” Li said, adding he had received many queries on the matter in recent months.
Given the costly nature of bankruptcy proceedings, particularly for small businesses
struggling with cash flow or without sufficient assets, the number of bankruptcy filings this year would not be high, said Zhu Bao, a Beijing-based lawyer.
Fears over a growing number of companies going bust also appears to have played some part in Chinese courts rejecting and delaying bankruptcy filings, according to lawyers and official documents.
Creditors who filed on behalf of suppliers that helped contain the coronavirus or companies on the brink of bankruptcy as a direct result of the pandemic usually had their claims knocked back, dozens of court documents filed over the past two months showed.
We know many enterprises are already on the verge of bankruptcy. It’s just that they don’t have to declare or file for bankruptcy immediately – Li Haifeng
The courts in these cases encouraged the creditors to reconcile with the struggling firms and ride out the difficulties.
This – along with disruptions to court proceedings due to virus lockdowns – helped slow the review of bankruptcies in Chinese courts to 1,770 in February and March, from 2,160 filings in January, according to the national enterprise bankruptcy information disclosure platform.
“The delay and rejection of taking corporate bankruptcy cases is certainly intended to keep the economy going. Too many bankruptcies cases do not do much to help economic recovery,” Zhu said.
China’s central leadership has maintained it wants to hit economic targets for this year, even as the country braces for a possible second wave virus outbreak.
The delay and rejection of taking corporate bankruptcy cases is certainly intended to keep the economy going – Zhu Bao
The odds of a first quarter economic contraction for China are growing, however, and economists are debating whether it still makes sense for Beijing to set a specific gross domestic product (GDP) growth target for 2020.
Ma Jun, an academic member of the People’s Bank of China’s monetary policy committee, is one prominent voice that has suggested Beijing drop a set target amid the uncertainty caused by the virus outbreak.
However, others like Yu Yongding, an economist from Chinese Academy of Social Sciences, said it was necessary to anchor the country’s economic expansion, though the government should be realistic about the goal, reported the Beijing-based financial media group Caixin.
SHANGHAI (Reuters) – China’s smartphone sales may plunge by as much as 50% in the first quarter, as many retail shops have closed for an extended period and production has yet to fully resume due to the fast spread of a new coronavirus, according to research reports.
The virus outbreak, which has killed more than 900 people and roiled China’s manufacturing industry, comes as top smartphone vendors such as Huawei had hoped China’s 5G rollout plans this year would help the world’s biggest smartphone market rebound after years of falling sales.
“Vendors’ planned product launches will be canceled or delayed, given that large public events are not allowed in China,” research firm Canalys said in a note last week.
“It will take time for vendors to change their product launch roadmaps in China, which is likely to dampen 5G shipments.”
Canalys expects China’s smartphone shipments to halve in the first quarter from a year ago, while IDC, another research firm that tracks the tech sector, forecasts a 30% drop.
Apple Inc said last week it is extending its retail store closures in China and has yet to finalise opening dates, as Foxconn, which assembles iPhones, struggles to fully resume factories.
Foxconn received government approval on Monday to resume production at a plant in the city of Zhenghzou, but its major plant in Shenzhen remain unopened.
Huawei, China’s biggest smartphone vendor, said its manufacturing capacity is “running normally” without specifying further. But like many other local peers, Huawei relies heavily on third-party manufacturers for production.
If factories cannot resume production to full capacity on time, this could delay brands’ ability to bring their newest products to market, analysts said.
Xiaomi Corp, Huawei, and Oppo, three of China’s top Android brands, are all expected to announce flagship devices in the first half.
Oppo told Reuters that while the impact of the virus will affect operations at some local factories, “manufacturing capacity can be guaranteed effectively” thanks to its plants overseas.
Xiaomi did not respond to requests for comment.
“The delays in reopening factories and the labour return time will not only affect shipments to stores, it will also affect the product launch times in the mid- and long-term,” Will Wong, an IDC analyst, said.
Globally, smartphone production will decrease by 12% in the March quarter to a five-year low of 275 million units, research firm TrendForce said on Monday. It revised down iPhone production by 10% to 41 million units, while Huawei’s output forecast was cut by 15% to 42.5 million phones.
Samsung Electronics Co, the world’s top smartphone maker, is seen the least affected by the virus outbreak as its main production base is in Vietnam, the report said, lowering its production forecasts by just 3% to 71.5 million units.
Image copyright AFP / GETTY
CHINDIA ALERT: You'll be living in their world, very soon 