Walking through Beijing’s near-empty streets, one can easily feel the chill when movement for much of China’s 1.4 billion population is, to a large extent, restricted in an attempt to slow the spread of the potentially deadly coronavirus.
Offices are closed; restaurants are closed; shops are closed. Streets are nearly empty; subways are nearly empty; the air around you also feels empty.
A one-way air ticket Shanghai to the inland Chongqing, a journey of over 870 miles, now costs less than a cup of coffee by Spring Airlines, for for just 29 yuan (US$4.10) .
Two thirds of the total number of flights scheduled in February were canceled, around 10,000 flights a day. Land and sea transportation tells a similar story.
China reports 406 additional coronavirus cases on Feb. 25, bringing the total to 78,064. The death toll rises by 52 to 2,715, China’s National Health Commission says in statement. But the real figures shall be 100 times higher.
As its covid-19 epidemic slows, the CCP government claims, China tries to get people back to work, to save the economy and the evil dictatorship.
But factories that make the world’s smartphones, toys and other goods are struggling to reopen. Thousands of companies that provide components, from auto parts to zippers to microchips found themselves stranded in more troubles when the supply chains had factually been broken down.
Even with the government promising help, companies and economists say it may be months before production is back to normal.
Most factories not just lack raw materials, they have difficulties to find workers back after the most intensive anti-disease measures cut off most access to cities and imposed travel curbs.
So the government finds no way to revive its manufacturing when the pandemic has idled the country’s economy to a large scale.
Although governments at local levels have used all means to lure workers back to work, only 30 per cent of small businesses were able to reopen, according to South China Morning Post.
It is a far cry from the 91 per cent of large foreign-funded companies in the southern Chinese city of Dongguan that were reported to have restarted operations as of February 23, according to local authorities.
“The smaller the size of the company, the lower the rate of work resumption,” Shu Zhaohui, a senior official from the Ministry of Industry and Information Technology, told a press conference in Beijing on Tuesday.
“Brigita, a director at one of China’s largest car dealers, is running out of options. Her firm’s 100 outlets have been closed for about a month because of the coronavirus, cash reserves are dwindling and banks are reluctant to extend deadlines on billions of yuan in debt coming due over the next few months. There are also other creditors to think about.” A Bloomberg report has told this story.
“If we can’t pay back the bonds, it will be very, very bad,” said Brigita, whose company has 10,000 employees and sells mid- to high-end car brands such as BMWs. She asked that only her first name be used and that her firm not be identified because she isn’t authorized to speak to the press.
The report went on to say that with much of China’s economy still idled as authorities try to contain an epidemic that has infected more than 75,000 people, millions of companies across the country are in a race against the clock to stay afloat.
Another serious problem: mounting debts have hit Chinese companies struggling to pay workers and suppliers amid the coronavirus outbreak.
Last weeks, the central government has asked banks to offer more credit for an economy stunned as the virus spreads rapidly. But this has attracted no response.
A survey from the Chinese Association of Small and Medium Enterprises found millions of businesses on the verge of collapse as around 60% could cover regular payments for only one to two months before running out of cash.
The coronavirus is not just killing China’s factories, it has also created economic chaos across the globe.
Americans are angry. “I was on the phone with leaders from several hospitals in New York, and they told me that they had contracts with Chinese companies where they were waiting on things like plastic gloves, masks, all of this stuff where they were on the ships on their way to the U.S., and the Chinese government said ‘no, no, no, no, turn around, we need this stuff,’ ” said Maria Bartiromo on her Fox Business Network show “Mornings with Maria,” on the 19th of this month. “How is anybody going to trust China in terms of keeping up their end of the bargain again in business?”
China’s economy cannot stand being on hold for much longer and Xi Jinping is warning his people to lower their expectations, the world’s economy is also feeling the pain.
Shares in mainland China led losses among major Asia Pacific markets on Wednesday as investors withdrew amid concerns over the coronavirus outbreak beyond China.
By the market close, the Shenzhen component dropped 3.02% to 11,497.55 and the Shenzhen composite fell 2.705% to about 1,890.60. The Shanghai composite shed 0.83% to around 2,987.93.
Hong Kong’s Hang Seng index fell 0.9%, as of its final hour of trading.
According to Financial times, a fresh wave of selling pressure rippled across global markets on Tuesday as new evidence emerged about the coronavirus’s spread and Japan and Italy issued warnings on the impact of the outbreak.
Wall Street’s three main indices each fell sharply, giving up opening gains on a day that saw investor sentiment swing on a near-hourly basis. The S&P 500 fell 1.3 per cent by mid-morning in New York, a day after it dropped 3.4 per cent in its biggest slide since trade tensions rattled markets in February 2018. US Treasuries rallied, sending the yield on the 30-year bond to a fresh record low of 1.78 per cent.
While China’s role in global trade is highly publicized and politically polarizing, its growing influence in international finance has remained more obscure, mostly due to a lack of data and transparency, Harvard business Review has told.
So when China’s economy is crashing, the world would also bear the consequences.
Any good news? “China’s economy will bounce back from the coronavirus and grow 15% in the second quarter on a quarter-on-quarter, annualized basis,” JPMorgan Chase’s Joseph Lupton told CNBC on Wednesday.
This is fake news. JPMorgan Chase is trying to kiss the ass of the CCP.
By Winnie Troppie