Caixin Business Digest: IMF Warns of Worst Recession Since 1930s; Chinese Brokerages Deny Merger Talks
The world economy is likely to suffer the worst year since the Great Depression because of the Covid-19 pandemic, the International Monetary Fund says. But positive signs finally emerge in Italy with the smallest daily case growth in a month. Also, Chinese charity group wants to help build testing labs overseas.
— By Timmy Shen (email@example.com) and Han Wei (firstname.lastname@example.org)
** ON THE CORONAVIRUS
Worst recession in sight since the Great Depression
The International Monetary Fund warned that the world economy in 2020 will suffer its worst year since the Great Depression of the 1930s because of the Covid-19 pandemic. In its latest World Economic Outlook report Tuesday, the organization estimated that global gross domestic product will shrink 3% this year. That compares with a January projection of a 3.3% expansion.
Italy reports smallest daily increase in a month
Italy reported the fewest new infection cases Tuesday in a month, reflecting the effects of the massive lockdown in slowing the spread of the disease. A total of 2,972 new cases were recorded for the day, the fewest since March 13. Confirmed cases in the country totaled 162,488.
Two more vaccine candidates to start human trials in China
Chinese scientists are ready to launch human trials for two more potential vaccines for Covid-19. One is co-developed by a Wuhan-based unit of China National Pharmaceutical Group Corp. and the Wuhan Institute of Virology, and the other by a group led by Sinovac Research & Development Co. Ltd.
Two companies banned from exporting low-quality medical supplies
Blockchain company Tus Data Asset Technologies Co. Ltd. and AIPO International Co. Ltd. have been banned from exporting epidemic prevention products (link in Chinese), the country’s Ministry of Commerce said. The decision follows controversies in several virus-stricken nations over the poor quality of some medical supplies exported from China.
Border cities lack epidemic control capacity
China’s top health body said Monday that the nation’s border cities, including Suifenhe, a remote border town near the Russian port of Vladivostok, lack the ability to prevent and control epidemics (link in Chinese). All China-Russia land border crossings have been temporarily closed amid a surge of cases imported from the country’s northern neighbor.
Other virus news
• Mammoth Foundation, a Shenzhen-based charity group backed by BGI Group, plans to donate at least 10 Covid-19 testing labs outside China to help control the virus. The first of the labs will be built in Serbia with daily testing capacity of 3,000 samples. An agreement on the Serbian project was signed last week.
• On Monday, the Chinese mainland reported 89 new confirmed cases (link in Chinese), of which 86 were imported, official data showed. The latest figures represented an easing after new cases briefly surged back into triple-digits the previous day on a wave of imported infections.
• Singapore reported a record 386 new cases of Covid-19 infection on Monday, of which 280 were linked to known clusters.
• As of Tuesday evening Beijing time, global infections had surpassed 1.93 million with over 120,000 deaths, according to data compiled by Johns Hopkins University.
• As of Monday, at least 17 countries have announced they are limiting exports of agricultural products (link in Chinese), even though the U.N.’s Food and Agriculture Organization has previously tried to dismiss fears of food shortages.
• After incorrectly reporting that there were over 2 million global coronavirus infections, Johns Hopkins University told the media (link in Chinese) that the mistake was due to an issue which arose when data from Florida were manually entered, adding that the university’s data system has now returned to normal.
• As of Sunday, there were 189 confirmed cases, including three deaths, among U.N. staff worldwide.
• China could face a second wave of Covid-19 in November, predicted Zhang Wenhong, a Shanghai medical expert.
Caixin’s coverage of the new coronavirus
** TOP STORIES OF THE DAY
Citic Securities, CSC Financial deny merger talks
Sources close to leading state-owned Chinese brokerages Citic Securities Co. and CSC Financial Co. said they are not aware of a potential merger of the two companies. The companies late Tuesday issued separate statements denying any merger talks.
The statement followed news that Chinese authorities were mulling the combination of the two industry leaders to create a stronger player.
China’s exports and imports dropped in March
China’s goods exports and imports respectively shrank 6.6% and 0.9% year-on-year in March, official data (link in Chinese) showed Tuesday.
The export and import declines were less steep than the median estimates of 14.2% and 8.3% drops from a Caixin survey of economists.
Excavator prices on the rise
In March, 25 major Chinese excavator producers sold 49,408 units, marking the largest monthly sales volume (link in Chinese) since 2006, according to data from the China Construction Machinery Association.
Several major manufacturer have raised prices for their excavators on rebounding domestic demand and rising costs of imported components.
Dropping car sales
• SAIC Motor Corp. Ltd., China’s biggest automaker, reported a 28.9% drop in earnings for 2019. It predicted the country’s car sales volume this year would decline by between 8.1% and 11.6% (link in Chinese).
BYD Co. Ltd. predicted that its first-quarter profit (link in Chinese) could slump between 80% and 93% year-on-year, as shockwaves from the pandemic take a toll on the carmaker’s sales.
Chongqing Changan Automobile Co. Ltd. reported a loss of 2.6 billion yuan last year (link in Chinese). Meanwhile, French automaker Renault SA will withdraw its stake in a joint venture in China (link in Chinese) with Dongfeng Motor Group Co. Ltd. after slipping sales.
Asian stock markets post gains
East Asia’s major stock markets rallied after China released better-than-expected trade data.
** OTHER STORIES MAKING HEADLINES
• China has released a draft energy law that prioritizes the use of renewable power sources.
• The Association of Southeast Asian Nations replaced the EU as China’s largest trading partner in the first quarter.
• In 2019, anti-graft organs have investigated some 6,900 corruption cases in the financial system.
• The Chinese Basketball Association said that it will cut salaries for the league’s middle and senior managers (link in Chinese) to offset the impact brought by the epidemic. China’s top-tier basketball league will cut the salary of its CEO by 35% and the salaries of directors and above by between 15% and 30%.
• Li Wenzhang (link in Chinese) has been appointed head of China’s National Public Complaints and Proposals Administration.
** AND FINALLY
Students are returning to classes across much of China, and schools are getting creative in how they protect them for future potential outbreaks of Covid-19.
Students in a junior high school in Suzhou, Jiangsu province, dine in their tiny stalls. Photo: IC Photo
** THE WEEK AHEAD
April 17: China Q1 GDP
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