China Business Digest: Hong Kong Unveils ‘Unprecedented’ $18 Billion Pandemic Relief Package
Caixin Global has started running a daily news digest to give readers a quick rundown of the top China business and finance stories, plus whatever is driving markets for the day. Please let us know if you have any feedback.
Hong Kong unveiled a fresh stimulus package worth $18 billion to counter the “unprecedented” challenge of the pandemic, while investors in the U.S. bet on new aid and possible economic reopening. Meanwhile, China is grappling with the risks of imported Covid-19 cases, though the epidemic has eased in the country and lockdowns have ended.
— By Guo Yingzhe (email@example.com) and Han Wei (firstname.lastname@example.org)
** ON THE CORONAVIRUS
Hong Kong unveils $18 billion relief package
Authorities in Hong Kong mapped out a new stimulus package worth about HK$137.5 billion ($17.7 billion) to help the city counter economic fallout of the coronavirus pandemic.
The package will include a job security program totaling HK$80 billion to subsidize 50% of wages for affected workers for six months. Job security payments will be capped at HK$9,000 per individual and benefit about 1.5 million residents, according to Hong Kong Chief Executive Carrie Lam.
“As we are facing an unprecedented challenge, the government has to respond in an unprecedented manner,” Lam said.
Other relief measures include HK$21 billion to support sectors including aviation and tourism, rent reduction for tenants of government properties, fare cuts for public transit operated by MTR Corp. and 30,000 new jobs.
This is the third round of relief announced by the Hong Kong government in two months to mitigate the economic impacts of the outbreak. The spending plans amount to about 10% of Hong Kong’s 2019 gross domestic product, according to Financial Secretary Paul Chan.
U.S. stocks rally on reopening speculation
American stock markets climbed Wednesday on expectations of new financial relief measures and moves toward reopening the economy.
Investors saw signs of relief as recent data suggested the outbreak in worst-hit New York may be plateauing. Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, said Wednesday the beginning of a turnaround in the fight against the virus could come after this week.
In an interview with Fox News Tuesday night, President Donald Trump said “We’re looking at the concept where we open sections of the country, and we’re also looking at the concept where you open up everything.”
The benchmark S&P 500 Index gained 3.4%, returning to bull market territory. The Dow Jones Industrial Average climbed 3.1%, the highest in nearly four weeks, and the Nasdaq finished the day 2.6% higher.
North Korea tests 709 with no confirmed cases: WHO
North Korea tested 709 people — 11 foreigners and 698 nationals — and found no infections of the new coronavirus as of April 2, Reuters reported, citing a World Health Organization official. More than 500 people were in quarantine for observation.
North Korea is one of only a handful of countries not to have reported confirmed cases of Covid-19. Since Dec. 31, 24,842 people have been released from quarantine in the country.
China closes northeastern border crossings with Russia
China has closed three border crossings between Russia and Northeast China’s Heilongjiang province as the number of imported cases from its northern neighbor has been growing.
The Chinese consulate in Vladivostok, a city in eastern Russia, said in a statement (link in Chinese) that Chinese nationals should avoid returning to China via the eastern China-Russia border crossings because the risk of contracting the coronavirus on the route is “very large.”
Human transmission occurred in early January
Researchers from the Wuhan disease control center found that human-to-human transmission of the coronavirus in Wuhan had taken place in the early days of January.
According to a paper published in Nature Microbiology, researchers re-analyzed 640 swab samples collected from October to January from patients in Wuhan with influenza-like-illness and found that nine of them tested positive for the novel coronavirus. The onset date of the earliest case among the nine cases was Jan. 4.
Over 6,500 people flew out of Wuhan
On the first day that Wuhan ended its lockdown, more than 6,500 inhabitants have taken flights out of the city, Caixin has learned. Although the city has ended its lockdown, life has yet to return to normal as internal travel restrictions remain in place, with the local government warning (link in Chinese) of ongoing risks and saying it would continue working to prevent another outbreak.
Japan sounds alarm
The Japanese government has declared a state of emergency in seven prefectures, including Tokyo and Osaka, warning of an imminent crisis, according to a briefing (link in Chinese) on Tuesday.
Prime Minister Shinzo Abe called on the country’s residents to stay at home as the number of cases in Tokyo has been doubling every five days and is on track to surpass 80,000 in a single month. As of Wednesday, Japan has reported more than 5,000 confirmed cases and over 100 deaths after including the cases from the Diamond Princess cruise ship.
Other virus news
• Apple supplier Foxconn will manufacture ventilators in a Wisconsin plant, Bloomberg reported. The iPhone maker joins a parade of manufacturers to produce the life support equipment in the Covid-19 pandemic.
• The Chinese government has decided to hold an online session (link in Chinese) of the China Import and Export Fair, or Canton Fair, in mid- or late-June, which was initially scheduled to start on April 15.
• On Tuesday, the Chinese mainland reported (link in Chinese) 137 new asymptomatic infections, 102 of which were imported.
• The first charter flight for teenage Chinese students in the U.S. will arrive in China later this week or early next week, multiple parents told Caixin (link in Chinese).
• The U.S. reported 1,858 daily deaths on Tuesday, a record high, CNN reported.
• U.K. Prime Minister Boris Johnson is comfortable, stable, and in good spirits after spending a second night in intensive care, the BBC reported.
• The number of global Covid-19 cases reached over 1.44 million as of Wednesday afternoon, including over 83,000 deaths, according to data compiled by Johns Hopkins University.
Caixin’s coverage of the new coronavirus
** TOP STORIES OF THE DAY
Concerns grow over Chinese firms’ financial data
Chinese video streaming platform iQiyi Inc. has disputed (link in Chinese) a report by short-seller Wolfpack Research accusing it of fabricating revenue and user numbers, as investors are increasingly concerned about Chinese companies listed in the U.S. in the wake of a fraud scandal at one of China’s largest domestic coffee chains, Luckin Coffee Inc.
Chinese education providers also felt the pain. New York-listed TAL Education Group said that it found during an internal audit that sales data may have been exaggerated (link in Chinese). The company’s share price plunged over 17% in after-hours trading Tuesday.
Asian markets mixed
East Asia’s major stock markets were mixed on Wednesday as Chinese stocks edged down.
Economists estimate lower CPI in March
According to a Caixin survey (link in Chinese), economists estimated that consumer inflation will continue to fall in March, with the median forecast of year-on-year growth in the consumer price index (CPI) coming in at 4.8%. China’s CPI rose 5.2% in February.
** OTHER STORIES MAKING THE HEADLINES
• WeWork is suing its largest shareholder SoftBank for abandoning (in Chinese) a $3 billion share buyout plan to bail out the struggling workplace provider.
• The Shanghai banking regulator suspended a type of trust business of troubled Anxin Trust Co. Ltd. (link in Chinese) and punished its controller for violations.
• American multinational 3M Co. will import respirators from its China factory to supplement the 35 million masks it produces per month in the U.S.
• The credit rating of Car Inc., a car rental company founded and controlled by Luckin founder Lu Zhengyao, has been downgraded (link in Chinese) by S&P Global, which cited the impact of the Luckin scandal to the company. Moody’s Investors Service Inc. has also downgraded its corporate family rating.
** AND FINALLY
A special graduation ceremony was held in Japan amid the coronavirus pandemic, with robots standing in for graduates at the commencement of Business Breakthrough University in Tokyo. With one robot representing every graduate, the robots accepted the degrees on behalf of the graduates. Each robot bore a tablet computer displaying the image of the student.
A special graduation ceremony was held in Japan amid the coronavirus pandemic. Photo: IC Photo
** THE WEEK AHEAD
April 10: China CPI and PPI data for March
April 14: China import and export data for March
Contact reporter Guo Yingzhe (email@example.com) and editors Joshua Dummer (firstname.lastname@example.org) and Michael Bellart (email@example.com)
- 1Cover Story: How China’s Housing Market Landed in the Deep Freeze
- 2Exclusive: Alibaba Set to Launch Its Own Cloud Server Chip
- 3Update: China’s GDP Growth Slows to 4.9% Amid Power Crunch, Real Estate Woes
- 4In Depth: Hong Kong’s Strategy to Break Cayman Islands’ Stranglehold on Offshore Funds
- 5Ericsson Rethinks China Market Strategy as Revenue Dives
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas