Links for Wednesday, April 22, 2020

BUSINESS AND TECHNOLOGY:

The collapse in China’s economic activity caused by the coronavirus has loudened calls from top policy advisers for the government to hasten the rollout of fiscal stimulus, as ballooning unemployment threatens social stability.

Adding to the sense of urgency are growing concerns a prolonged delay in the annual meeting of parliament, originally scheduled for March 5 but postponed due to the COVID-19 outbreak, is holding up key policy measures.

  • The Chinese economy rebounded in March but the recovery isn’t likely to endure in 2Q because of the confluence of headwinds that will exacerbate weak demand.
  • At the heart of the challenge is the liquidity shortage in the private sector, which accounts for more than half of China’s GDP…
  • Beijing will be able to deal with the anticipated export drop with fiscal stimulus, but it will have difficulty reigniting domestic demand.

According to PitchBook, “Chinese firms recorded 66 venture capital deals for the week ended March 28, the most of any week in 2020 and just below figures from the same time last year,” (although 2019 was a slow year). There is a natural lag between when deals are made and when they are announced, but still, there are some interesting trends.

The first examples of coronavirus-induced supply-chain shifts are under way. This week, Japanese consumer-products manufacturer Iris Ohyama announced it would take government subsidies to expand the production of masks domestically, adding to its existing production in China, the first company to do so.

Bringing some manufacturing home for medical or security purposes might make sense. But those expecting large-scale deglobalization and the return of domestic production for many goods might be disappointed.

Bad debt at Chinese banks climbed in the first quarter even as lenders deferred payments on and rolled over a combined 1.5 trillion yuan ($212 billion) in loans after the coronavirus outbreak brought the world’s second-largest economy to a standstill.

After allowing banks to take a more lenient approach on how they classify bad debt, regulators in Beijing on Wednesday revealed the industry’s non-performing loan ratio nudged up just 0.06 percentage point to 2.04% at the end of March.

China’s telecom industry recorded a 2.3% decline in total revenue to 377.8 billion yuan ($53.4 billion) in the first quarter amid the COVID-19 pandemic, according to the Ministry of Industry and Information Technology.

Total subscribers of mobile services declined by 11.8 million in the first quarter from a year ago, reflecting a decline in personal mobility during the outbreak. However, the number of subscribers started rebounding in March as businesses began to resume, the ministry said.

Baidu has started offering its Apollo “robotaxi” service in Changsha city of Hunan Province, becoming one of the first companies to carry passengers in autonomous vehicles in China.

People in Changsha can hail Baidu’s autonomous taxis for free through Baidu’s navigation app Baidu Maps, according to Baidu’s official press release earlier this week.

Volkswagen and its march into the Chinese battery supply chain has once again become the subject of intense speculation. The German automaker is reportedly about to take a majority stake in the country’s third-biggest battery maker Guoxuan High-tech, attracting attention from securities authorities.

China expects the country will suffer its worst pork supply squeeze yet as the coronavirus pandemic roils output overseas, threatening imports by the world’s biggest consumer of the meat.

The “toughest time” yet for supplies in China will be in the second quarter of this year, said Yáng Zhènhǎi 杨振海, the head of the agriculture ministry’s animal husbandry bureau. Pork prices may surge before peaking in September, he said.

The biggest of those saw coffee giant Starbucks Corp. announce a major new tie-up on Tuesday with partners including artificial meat highflyer Beyond Meat Inc. Just a day earlier, fast-food giant KFC announced its own trial for veggie chicken nuggets with U.S. agricultural giant Cargill. And days before that, U.S. pizza chain Papa John’s International Inc. announced its own fake meat tie-up that will see it offer imitation meatballs on some of its pizzas in China.

[U.S. blacklisted] Chinese artificial intelligence specialist iFlyTek reported a loss in the first quarter of the year, blaming the weak performance on operating difficulties due to the COVID-19 pandemic.

The company’s net loss totaled 131 million yuan ($18.3 million) in the January-to-March period, compared with a profit of 102 million yuan [$14.4 million] a year ago, according to an announcement [in Chinese] published Wednesday on the Shenzhen Stock Exchange’s website. Its quarterly revenue also dropped 28% year-on-year to 1.4 billion yuan [$197.6 million].

SCIENCE, HEALTH, AND THE ENVIRONMENT:

On 21 March, World Forest Day, a short video on conserving global forests sparked angry protests on the Chinese internet, and was taken down by its makers the next day.

The five-minute film was a joint effort by PaperClip, a group which produces educational films, and the WWF. It showed how farming for livestock and soybean is destroying forests in the Amazon region, in an attempt to encourage consumers to choose products certified sustainable. But linking the purchase of meat, eggs and milk by Chinese shoppers with deforestation sparked accusations that it was “insulting China”.

Experts say it is highly unlikely the virus accidentally leaked from the Wuhan Institute of Virology but the U.S. is seeking access to conduct its own investigation into the claims, fuelled by the laboratory’s proximity to the seafood and wildlife market associated with many of the earliest cases.

Chinese foreign ministry spokesman Zhào Lìjiān 赵立坚 — who last month shared an unsubstantiated claim that the U.S. military had introduced the virus to Wuhan – countered the demand, from U.S. Secretary of State Mike Pompeo, by saying the origin of the virus should be determined by scientists.

POLITICS AND CURRENT AFFAIRS:

The Chinese ambassador to the U.S. called for a “serious rethinking” of relations between the world’s biggest economies in the face of the global coronavirus pandemic.

“I think I should be hoping for more than just a pause in tensions, but really a serious rethinking of the very foundations of this important relationship,” Cuī Tiānkǎi 崔天凯, said…

Cui also rejected the idea that U.S.-China ties should be defined as a strategic rivalry, particularly as the countries are now faced with “shared vulnerability” amid the virus. “Hopefully this pandemic will teach all of us a good lesson,” he said, adding that the relationship should “be based on a more realistic, forward-looking foundation.”

The [American Bridge 21st Century] ad [for Joe Biden’s campaign] says that “Trump…shipped 17 tons of American masks and medical supplies. Our masks and supplies.” The impression left by the ad is that these were U.S. government goods, shipped on Trump’s order.

But these were actually donations by private charities and public companies for Project HOPE, an international health-care organization that has been operating in Wuhan for a quarter-century and helped establish a nursing school there. Usually, donors to Project HOPE arrange for charter aircraft to take their donations overseas.

Taiwan President Tsai Ing-wen [蔡英文 Cài Yīngwén] on Wednesday apologized for the handling of a COVID-19 cluster on board a naval ship which has so far left 28 people infected with the virus, saying that as commander-in-chief, she holds ultimate responsibility for the military…

After Taiwan’s Central Epidemic Command Center (CECC) announced on Saturday and Sunday that 24 people on board the Panshi had been infected with COVID-19 (the number has since risen to 28), suspicions were raised that the military failed to report possible cases of the disease on board the ship.

Five new principal officials have been appointed in a cabinet reshuffle, Hong Kong’s Chief Executive Carrie Lam [林鄭月娥 Lín Zhèng Yuè’é] said on Wednesday.

The announcement confirmed local media reports the day before that the Secretary for Constitutional and Mainland Affairs Patrick Nip [聂德权 Niè Déquán] would be replaced by the Director of Immigration Erick Tsang [曾国卫 Zēng Guówèi]. Nip is to replace Joshua Law [罗智光 Luó Zhìguāng] as secretary for the civil service.

Civic Party lawmaker Dennis Kwok [郭榮鏗 Guō Róngkēng] has said that expects to be ousted from the Legislative Council, after he was repeatedly attacked by Beijing who claimed he was violating his oath and guilty of misconduct in public office.

The Hong Kong and Macau Affairs Office (HKMAO) issued [in Chinese] a fresh statement on Tuesday to reiterate previous accusations against Kwok, saying he was abusing his power to deliberately stall the election of the House Committee chairperson.

Hong Kong police launched a mass-arrest against 15 prominent pro-democracy figures in Hong Kong on April 18, and 81-year-old barrister Martin Lee [李柱铭 Lǐ Zhùmíng] was one of them. In an interview on Sunday, he said Beijing has completely changed its position on Dèng Xiǎopíng’s 邓小平 One Country, Two Systems’ promise and the international community has the moral responsibility to support Hong Kong people.

Australia’s push for an independent review of the origins and spread of the pandemic, including the response of the World Health Organisation (WHO), has drawn sharp criticism from China, which has accused Australian lawmakers of taking instructions from the United States.

“These days, certain Australian politicians are keen to parrot what those Americans have asserted and simply follow them in staging political attacks on China,” a statement for the embassy said.

Australia is urging top allies to back an overhaul of the World Health Organization including recruitment of investigators akin to “weapons inspectors” to determine the source of major disease outbreaks.

The prime minister, Scott Morrison, has been raising the three-point plan in a series of telephone calls with the leaders of the US, France, Germany and New Zealand.

SOCIETY AND CULTURE:

A Chinese woman divorced her husband last month, partly she said, because they disagreed about whether their son would carry his or her name. Eventually she agreed their son would use a hyphenated surname consisting of both her and her husband’s last names. “This is the best I could do. At least I’ve let my ex-husband realize that he should not take passing on his surname to his children for granted,” she wrote on social network Weibo late last month.

But the post, which generated over 240,000 likes, quickly stoked a backlash.

The deaths of four boys aged between five and nine at an illegal building site in central China on Saturday are being treated as a criminal offence.

Eight company executives and workers have been detained, two officials have been sacked and a third is under investigation after the children were found buried under mounds of earth in a pit at a housing construction site near their homes in Yuanyang county in Henan province.

Chinese MMA fighter Xú Xiǎodōng’s 徐晓冬 rise to notoriety of course began with a 10-second pulverisation of tai chi “master” Léi Léi 雷雷 in 2017.

Now “Mad Dog” is threatening to dish out another beating to him, after Lei Lei seemingly incited violence against the author of the Wuhan Diary.

Award-winning Chinese novelist and poet Fāng Fāng 方方 has been hit by a nationalist backlash, accused of fuelling Western criticisms of China’s handling of the Covid-19 outbreak. Her diary, first published online detailing her life in Wuhan during the lockdown, is now set to be released in English.

Amid all the tragic stories happening at the epicenter, Fang’s personal recording seemed plain-spoken and ordinary, sometimes caught up too deeply in the trivial aspects of life. But her writing’s honest and spontaneous nature is certainly beyond valuable; her words provide a window into the suffering in Wuhan for the outsiders, and keep an important, raw record of the humanity and complexity of the 2-month lockdown from a local witness’s perspective.

  • “Qie Guevara” released from prison
    Fresh out of prison, bike burglar Qie Guevara shuns spotlight / Sixth Tone
    “After vowing never to work for anyone, Zhou Liqi 周某齐 ran into trouble with the law. Now released from prison, the charismatic convict is rejecting lucrative contracts with social media agencies in favor of becoming a farmer.”