Links for Friday, February 7, 2020

BUSINESS AND TECHNOLOGY:

Hong Kong’s flagship carrier Cathay Pacific is asking its entire workforce to take up to three weeks of unpaid leave, its CEO announced Wednesday, as the airline faces a crisis in the wake of the new coronavirus outbreak.

  • Occupancy level was 22% on January 24-26, versus 55% on average during such festive weeks since 2015.
  • Health scare also means fewer visits by mainlanders to U.S. in 2020, $5.8 billion potential loss in spending, forecast shows.

Traders are resorting to unorthodox methods as they seek to navigate the market impact from the coronavirus epidemic, from bringing in disease specialists to developing statistical models. Markets across Asia fell this week as the outbreak worsened…China’s CSI 300 of Shanghai- and Shenzhen-listed shares plunged 8% on Monday, but has since clawed back more than half that, even as the death toll has climbed.

Some prominent investors in the region have turned to external disease experts to help them navigate the crisis. Hong Kong-based broker CLSA this week held a client call with John Nicholls, who helped isolate the SARS coronavirus in 2003 and is a professor of pathology at the University of Hong Kong.

In a letter publicly addressed to China’s Banking and Insurance Regulatory Commission, China’s Automobile Dealers Association (CADA) asked banks to extend loans to dealers and offer more temporary liquidity support such as credit lines to help dealers who are “facing extreme liquidity pressure.”

Coronavirus has given new meaning to something Apple Inc. executives have been saying for years: Apple needs another China.

The rapid spread of the virus and the disruption it has caused is the latest test of Apple’s dependency on the world’s most populous nation, both as a consumer market but more fundamentally as a manufacturing base for most of the iPhones, iPads and Macs sold world-wide.

SCIENCE, HEALTH, AND THE ENVIRONMENT:

The doctors who examined Rana Zhou’s parents decided that the couple had probably caught the coronavirus which has been sweeping their home city, Wuhan, and spreading globally. But they said they did not have enough test kits to be sure. Instead of finding them beds in a hospital, officials in their neighbourhood told them to go to one of many hotels which the government has requisitioned in order to monitor and isolate people with minor virus-related symptoms. But when her father’s fever worsened, staff said they could not take care of him. They told the pair they would have to return home.

Last week, federal prosecutors charged Charles M. Lieber, an acclaimed Harvard chemist viewed by many as a future Nobel laureate, with lying to federal authorities about his affiliation with Thousand Talents…

Security analysts are now scrutinizing a range of Chinese talent programs and the foreign scientists who have applied to them.

“One question would be, is this a bug, or a feature of these programs, to have a link to espionage?” said Elsa B. Kania, an adjunct senior fellow in the Technology and National Security Program at the Center for a New American Security. She said she hoped the response by the United States would be “surgical.”

“It is important to course-correct where some of these activities and behaviors are problematic, or even egregious, without causing collateral damage to this critical landscape of global research and innovation,” she said.

POLITICS AND CURRENT AFFAIRS:

During a recent visit to several cities and towns in the Uyghur heartland of southern Xinjiang, it was clear that many of the overt security measures employed in recent years have been rolled back after months of international scrutiny and criticism from the U.S. and other Western nations.

Yet other, at-times more subtle, forms of control remain in place.

Attorney General William P. Barr said Thursday that China’s dominance of 5G telecommunications networks was one of America’s top national security and economic threats, amplifying warnings issued for years by intelligence officials but that President Trump has sometimes undermined.

Mr. Barr said that allowing China to establish dominance was not only a “monumental danger” as Beijing could use the technology for monitoring and surveillance, but also that “the stakes are far higher than that.”

“Our economic future is at stake,” Mr. Barr said in a speech delivered during a conference in Washington on threats that China poses to the United States. “The risk of losing the 5G struggle with China should vastly outweigh other considerations.”

  • U.S. Attorney General William Barr said America should take controlling stakes in Nokia and Ericsson to “blunt” Chinese firm Huawei’s “drive to domination.”
  • Barr’s comments come after President Donald Trump reportedly expressed “apoplectic” fury towards U.K. Prime Minister Boris Johnson over Britain’s decision to allow Huawei limited participation in its 5G networks.

I grow alfalfa seed in the southeastern corner of Washington state — and my business, which is closely tied to hay exports, has suffered mightily over the past two years.

I’m one of those farmers who is supposed to be delighted with the U.S.-China “Phase One” trade deal. It commits China to buying $200 billion in US goods and services over the next two years. Although I’m hopeful that it will give farmers a boost, I’m more than a little worried that it won’t.

That’s because I’ve read the fine print.

SOCIETY AND CULTURE:

AA Bakery and Cafe in San Francisco’s Chinatown usually has customers out the door for its egg tarts and pineapple buns. But a rumor about an employee said to have contracted coronavirus has sent prospective customers scurrying elsewhere, according to local CBS affiliate KPIX.

The bakery’s owner, Henry Chang, says none of his workers are ill. Coronavirus fears have gripped the neighborhood, though. Foot traffic in the area is down by more than 50%, local residents and merchants estimate.

You’ll find the same thing happening all over the world: From Italy to Philadelphia, similar fears have driven customers away from Chinese districts — and their businesses.

  • While the Southeast Asian nation has just three confirmed cases, experts say fears over the virus’ spread are threatening to become an ‘epidemic of racism.’
  • Police say they will crack down on the spread of fake news, but it remains unclear how they will do so and which law they will use.