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China’s Manufacturing Industry

Laborers working at a clothes factory in Hefei, in east China’s Anhui Province. China’s garment manufacturing industry is experiencing a downturn. (STR/AFP/Getty Images)

A senior Chinese Communist Party (CCP) official recently admitted that because China’s manufacturing industry was limited by China’s social system, a lack of talents, and other factors, and because key technologies were controlled by “others,” China needs at least 30 years to achieve the goal of becoming a “manufacturing powerhouse.”

The statement was made by Miao Wei, deputy director of the Economic Committee of the “Chinese People’s Political Consultative Conference” (CPPCC) and former Minister of “Industry and Information Technology.”

 

He said at a CPPCC meeting that in terms of global manufacturing industry, there are four different levels.

The first level is led by the United States because it is the global science and technology innovation center. The European Union and Japan belong to the second level since they are at the high-end of manufacturing. China and some other emerging countries belong to the third level, which is at the low- and mid-range of the manufacturing industry. The fourth level mainly consists of resource exporting countries, including OPEC (Organization of Petroleum Exporting Countries), Africa, Latin America, and other countries.

According to Miao Wei, China’s manufacturing industry is “big but not strong, comprehensive but not good,” with weak basic capabilities, while key technologies are still controlled by “others.” Because of this, it will take at least 30 years for China to become a manufacturing powerhouse.

Si Zefu, a member of the Standing Committee of the CPPCC and Chairman of the Board of Directors of Harbin Electric Corporation, also admitted on the same day that China’s manufacturing industry was “not as good as others” in three “soft strengths”: innovation capability and innovation level; product quality and brand; management level and efficiency; “The poor profitability is particularly prominent,” he said.

Miao Wei also stressed that the manufacturing sector’s contribution to the GDP recently fell very fast. This not only dragged down China’s economic growth, but also affected urban employment. “It will also bring industrial safety risks, weakening China’s economy’s ability to resist risks and international competitiveness,” he said.

Miao Wei said that as China’s economy shifted to a service-based model, factories with polluting chimneys had been closed and manufacturing output as a share of the economy had declined. In 2020, China’s manufacturing share of GDP was just over a quarter, the lowest level since 2012.

As to the problem of China’s social system, Miao Wei believes that a “lack of market-oriented reforms” is the fundamental problem limiting the development of China’s manufacturing industry.

He also thinks that apart from a lack of key technologies, China also lacks talents in emerging industries, and this has become an obstacle for improving the overall status of the manufacturing industry.

In 2015, the CCP proposed the 10-year Made in China 2025 project, envisioning that by 2025, China would have transformed from a big manufacturing country to a manufacturing power, and that by 2035, the country’s manufacturing industry would surpass that of industrially advanced countries like Germany and Japan. The CCP hopes it will lead innovation in key manufacturing sectors by 2049, the 100th anniversary of the establishment of the CCP’s regime.

However, after the “Made in China 2025” project became a sticking point in the trade war with the United States, Beijing has stopped talking about it publicly. The project disappeared from CCP’s 2019 government work report.

In the meantime, according to the Wall Street Journal, the CCP has replaced its “Made in China 2025” with the 14th “5-year plan” drafted by Vice Premier Liu He.

In addition to the trade war, the Trump administration had imposed sanctions on the CCP’s state-owned technology companies such as telecommunications giants Huawei and ZTE, and Semiconductor Manufacturing International Corporation (SMIC).

As a result, the CCP has publicly admitted that China is suffering from a choke-hold in the field of technology.

When hosting the CCP’s Central Economic Work Conference in November last year, Xi Jinping admitted that innovation in China’s manufacturing industry was far from enough. He said the country’s strategic science and technology forces should be strengthened to enhance China’s capability to stay independent and take control of its’ own industrial chain in order to solve the choke-hold problems with key technologies.

Chinese Premier Li Keqiang also stressed at the economic work conference in December last year that “efforts should be made to solve the major problems that constrain national development and security,” and China should “focus on the weak links in the industry, implement core technology tapping projects, and solve a number of choke-hold problems as soon as possible.”

Current affairs commentator Zhong Yuan said in an article from the Chinese edition of The Epoch Times that Li Keqiang’s speech revealed the reality that the CCP is lagging behind in science and technology.

China’s Premier Li Keqiang.

Yuan said, although the CCP had stolen a lot of technology, it wasn’t able to master the most important key technologies. It was eager to engage in the so-called “Made in China 2025” plan, and even dreamed about monopolizing the world market. But all those dreams had proven to be for naught.

In recent years, China has become the world’s largest manufacturing country driven by domestic and international demand, but its industry’s dependence on U.S. high-tech products such as semiconductors has become a strategic weakness.

For example, although Huawei has been backed by the CCP with full force, it was hit hard by the U.S. sanctions. As a result, the CCP has started to promote “scientific pig farming.” Many high-tech enterprises have entered the pig farming industry.

Since the first case of African swine fever was confirmed in China in August 2018, the price of pigs has risen steadily. Recently, when it became difficult to maintain its main cell phone business, Huawei was forced to announce its move into “smart pig farming” due to a cut-off in chip supply.

According to Sina.com, Huawei’s “smart pig farming” solution includes providing dashboard monitoring, big data analysis, and digital management. It also supports AI identification, AI learning, AI prediction, AI decision making, robot inspection, and remote control through standardization and programming.

In addition to creating identity cards for pigs, facial recognition technology was also applied to pigs. Facial recognition of pigs, or “pig face” identification and other technologies have also been adopted in Huawei’s “smart pig farming” solutions.

An article by Radio Taiwan International mockingly says that what’s disastrous for Huawei is, even after Huawei struggled to hold on until the White House changed hands, the Biden administration hasn’t loosened the sanctions.

Huawei’s Chairman Ren Zhengfei.

In February this year, Huawei’s Chairman Ren Zhengfei vowed to “survive without cell phones,” and launched the “Nanniwan” projects to save itself.  The projects include making breakthroughs in various fields such as coal and steel production, music, smart screens, PC computers, and tablets.

Nanniwan was the “revolutionary base” of the CCP located near Yan’an in Shaanxi Province in China. In March 1941, the Eighth Route Army of the CCP carried out military reclamation in Nanniwan to provide supplies for the CCP.

Since then, Nanniwan has become a symbolic “sacred” place that saved the CCP. “The spirit of Nanniwan is an important part of the spirit of Yan’an,” reads Baidu.com’s entry about Nanniwan.

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Lunar New Year Travel

People wearing face wait at the arrival hall of Shanghai Hongqiao International Airport as the Spring Festival travel season begins ahead of the Chinese Lunar New Year.

As the “CCP virus” outbreaks across China continue to worsen, Chinese central authorities recently issued conflicting policies on traveling during the Lunar New Year travel holiday, causing confusion.

And after months of authorities blaming local outbreaks on contaminated imported foods, the central government’s State Council suddenly did an about-face and said food is unlikely to spread the virus.

Some China analysts said the conflicting rhetoric may be due to the different  priorities within the Party’s factions.

Meanwhile, locals in Harbin, Tonghua, and Shanghai cities said that they knew of infections that officials did not report, leading them to suspect that authorities were covering up the epidemic.

And in Harbin, the Party punished 12 officials for failing to contain the local outbreak. They were taken in for questioning.

A health worker in a protective suit sits in front of a security line in the Huangpu district in Shanghai.

The CCP Central Committee’s General Office, as well as, 29 provincial and city governments, issued conflicting policies to discourage people from traveling for the upcoming Lunar New Year holiday, which falls on February 12 this year. Celebrations last up to 16 days, but only the first 7 days are considered a public holiday (February 11th–17th, 2021).

Millions typically travel across the country to reunite with families. The peak travel season had already started on Jan. 28. Chinese civil aviation and railway authorities announced that the number of passengers they transported that day was about 70 percent less than the number last year.

But on January 31, China’s State Council, during a press conference, said that people can travel, and that local governments should not forbid people from going back home for the holiday. It also instructed authorities not to require quarantine travelers at home or hotels, and that people traveling from low-risk regions should not be forced to take COVID-19 nucleic acid tests.

Just days earlier on January 25, the CCP Central Committee’s General Office had officially issued a policy mandating that citizens stay put in the areas where they live and not travel for the Lunar New Year.

Chinese provincial and city governments also announced rules for travelers, such as requiring 14 to 28 days quarantine for them, and taking four to seven nucleic acid tests during the quarantine period.

People are required to pay the cost for quarantining and tests out of pocket.

Fresh wild and farmed Loch Duart salmon filets are seen on a tray at the San Francisco Fish Company.

Officials also said that food products cannot transmit the virus to people because the samples that tested positive previously contained inactive virus material; thus, people should feel free to eat imported foods.

But since July 2020, Chinese regime has consistently claimed that local outbreaks were due to imported frozen food products that tested positive for COVID-19. Afraid of getting the disease, Chinese people have been cautious not to buy imported foods.

Imported food products are usually more expensive, and thus generate more profit margins for retailers and provide more sales tax revenue for the state.

China commentator Tang Jingyuan analyzed that the State Council is headed by premier Li Keqiang, while the Party is headed by leader Xi Jinping.

Chinese leader Xi Jinping and Premier Li Keqiang arrive in the Great Hall of the People for a ceremony to honor people who fought against the COVID-19 pandemic in Beijing.

The State Council’s latest instructions hinted that Li was concerned about the economy and wanted people to consume more. Meanwhile, Xi wants to effectively curb the outbreaks so that he can solidify his power.

“No traveling means no family gathering, no gift-giving, and no big dinners,” Tang said. “The Chinese economy was in a very bad shape in 2020, and Li Keqiang must be very worried about losing these big New Year-related revenues.”

Meanwhile, “Xi wrote an article on February 15, 2020, saying he is the one who can lead Chinese people into fighting against this virus. He then claimed frequently that China won or defended against the virus successfully. He needs to maintain this political achievement, which can prove that his ruling is legitimate,” Tang added.

Tang added that Chinese officials likely under-report local outbreaks; because curbing the virus has become the most important political task, they are incentivized to make the outbreak situation look containable and not tell the truth.

People line up to be tested for the COVID-19 outside a hospital in Beijing.

On January 31, the central government announced that newly diagnosed COVID-19 patients were detected in northern China’s Jilin, Heilongjiang, and Hebei provinces. But locals said authorities locked down more residential compounds in Shanghai—which likely means some residents were diagnosed with COVID-19 there.

Meanwhile, Suihua city in Jilin Province announced that a newly built makeshift hospital was put into operation and received its first patients that day. This is despite the city only announcing a few hundred patients so far that need to be treated in the hospital.

Suihua also announced its third round of mass COVID-19 testing on all residents as a method to curb the spreading of the virus. Deputy mayor Dong Wenqin said all 10,933 villages and residential compounds in the city were fully locked down and no resident could leave their homes for the past 19 days. Yet, the city still had new infections.

A woman is tested for the COVID-19 outside a hospital in Beijing.

Harbin is in a similar situation. Local residents told that they knew of more infections that authorities didn’t announce.

“Every day, they the government staff picked up residents from our residential compound and our neighboring Lanhe Mingyuan residential compound, who were positive infections,” a resident at Mingda Garden residential compound named Wang Jian said. “They have sealed our doors for a long time, since Jan. 19, but people still get infected.”

A medical worker takes a swab sample from a man as people queue to get tests for COVID-19 at an office building in Harbin, in northeastern China’s Heilongjiang Province.

A resident at Dajiang Jinzuo residential compound named Chen Hai said his residential compound has detected new patients frequently since it has been sealed off for over a week. Chen added that he and his fellow residents had to take the fourth round of nucleic acid tests.

Sun Ming was taken to a hotel for quarantine after he was identified as a close contact of a diagnosed patient. He said: “All quarantine centers are now filled with people. A lot of confirmed patients’ close contacts are being quarantined at home now because no quarantine center has a free room.”

Shanghai residents said that the outbreak in Shanghai was worsening but authorities were covering it up.

“Now the government is building a makeshift hospital for COVID-19 patients in Pudong district, and a makeshift quarantine center in Songjiang district,” Chen said. “Don’t trust the official announcements. The regime won’t tell you the truth.”

Chen obtained a construction blueprint of the makeshift quarantine center in Songjiang district, at the southwestern corner of Shanghai, which he shared with this publication.

Health workers guard a street in the Huangpu district while a man transports a bag of rice by bike in Shanghai.

Shanghai residents previously said that the city was building a makeshift hospital in Pudong. On January 27, the Shanghai government claimed that it was not a hospital facility but an affordable apartment project.

Local residents shared a video online disputing the authorities’ claim. The video recorded a manager at the construction field telling locals that it was a hospital.

Health workers in protective suits are seen in the Huangpu district on January 28, 2021 in Shanghai. China currently has approximately 1,820 active Covid-19 cases across the country.

Another resident shared a video showing that dozens of container rooms—similar to those that have been used by Chinese authorities to build makeshift facilities during this pandemic—were being transported to the field.

Chinese workers skip holidays to keep factories humming
Beijing Mandates 4-Week Quarantine for Travelers
Shanghai Announces New CCP Virus Outbreak

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Made in China 2025

Technology is cloaked in many guises. But not, it appears, in the form of the “Made in China 2025” master plan.

A close inspection of Premier Li Keqiang’s annual Government Work Report showed there was no mention of the controversial program in the 35-page document.

Remarkable, when you consider that this is one of President Xi Jinping’s seminal policies, which is geared to turning the world’s second-largest economy into a “technological superpower.”

Instead, the words “smart plus” were used to describe China’s high-tech development in the 21st Century. And only briefly.

“One of the most significant row backs has been the government’s softening of its ‘Made in China 2025’ initiative,” Audrey Jiajia Li wrote on openDemocracy, a nonprofit political website based in the United Kingdom.

“The policy provoked alarm in the West, particularly in Washington, and was subsequently downplayed by China’s state-run media. The state news agency Xinhua referred to the policy more than 140 times in the first half of 2018, but abruptly stopped doing so after June 5. A propaganda directive ordering the media to stop using the term was leaked later that month.”

Breathtaking in scale, the policy was rolled out in 2015, four years after Germany’s Industry 4.0 initiative, which was launched at the influential Hanover Fair.

The blueprint encompasses an array of industries, from chips, computers and the cloud to smart cars and smart cookers. In fact, hardly a single sector in China’s economy will escape the effects of this multi-billion-dollar project.

Renewables, railways and robotics are other vital areas earmarked, along with the Internet of Things, and interconnected smart technology linked through artificial intelligence, or AI, for the bio pharmaceutical and manufacturing sectors.

But this is just part of the “Made in China 2025” brief, which has called for at least 70% of related high-tech materials and products, such as semiconductors, to be made domestically by 2030.

Indeed, the sheer depth of the scheme has triggered a technological arms race, with US President Donald Trump insisting that China’s state subsidies for these industries should be curtailed amid rising trade tensions.

During the three rounds of talks between Beijing and Washington in the past six weeks, this became a major sticking point. The European Union has also voiced concerns about illegal central government support which could threaten the bloc’s tech industries such as telecoms and aerospace.

“Nobody in the EU wants to isolate China, but we need to equip ourselves better against a country that in some areas is becoming a strategic rival,” a senior EU diplomat said last week.

While China’s relationship with two of its biggest trading partners has deteriorated during the past 12 months, this will not derail its high-tech ambitions.

A separate report released earlier this week revealed that Beijing will increase science and technology spending by 13% to 354.31 billion yuan (US$52.88 billion) this year, despite the economy showing signs of stress.

Putting that into perspective, Huang Shouhong, the director of the research office of the influential State Council and a National People’s Congress delegate, said:

“There is limited space in the annual government work report and there’s nothing unusual about certain policies being mentioned last year but not this year. Yet facilitating the high-quality growth of China’s manufacturing sector is a must to upgrade and transform the Chinese economy.”

Still, technology is now the new “battlefield” in the rivalry between the world’s two largest economies with Huawei, the “Made in China 2025” poster child, targeted by US crossfire.

The telecom giant has become associated with the perceived “security dangers” of Beijing’s state-backed model when it comes to 5G. Australia, New Zealand, UK and the US have already announced plans to ban it from their super-fast networks.

In December, the US Justice Department announced sweeping charges against the group, including bank fraud, obstruction of justice and technology theft.

Key accusations revolve around violations of US sanctions on Iran, an allegation which has been leveled against Chief Financial Officer Meng Wanzhou, the daughter of the company’s billionaire founder Ren Zhengfei.

She was arrested in Vancouver and faces extradition to the US. Meng and Huawei have categorically denied the charges. But the saga continues within a broader tech conflict with no ceasefire in sight.

“The current trade war between the United States and China is not about trade,” Yukon Huang, a senior fellow at the Carnegie Endowment and the author of “Cracking the China Conundrum: Why Conventional Economic Wisdom Is Wrong”, said.

“This war is about protecting the technological edge that has made the United States the world’s dominant economic power,” the former World Bank director for China added.

Needless to say, those comments also failed to make it into Li’s 35-page report.

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Coronavirus Update

The molecular structure of a coronavirus. Photo: AFP via Getty

China is being wheeled into the quarantine ward after the World Health Organization declared a global emergency following the Wuhan coronavirus outbreak. Crucial trading partners are evacuating their employees, major airlines are suspending flights and Beijing has finally started to bring back tourists from “virus” hit Hubei province because of “practical difficulties.”

The spectacular Wuhan Parrot Bridge winds across the Yangtze river in a glittering night-time shot. Photo: Creative Commons Zero

They will be airlifted “as soon as possible” Hua Chunying, a spokeswoman for China’s Ministry of Foreign Affairs, confirmed on Friday. “There have been practical difficulties that Hubei citizens, especially those from Wuhan, have faced overseas,” she said, referring to “anti-Chinese” sentiment.

As the death toll climbs to more than 200 with nearly 10,000 people infected by the “2019-nCoV” disease, the mood towards the world’s second-largest economy has changed across the region.

Students from the Dominican Republic are interviewed by AFP about the possibility of being evacuated from Wuhan, the epicenter of a viral outbreak, on January 26, 2020. Photo: Hector Retamel / AFP

In Singapore, more than 100,000 people have signed an online petition calling for the government to ban Chinese nationals from entering the country.

“All new visitors with recent travel history to China within the last 14 days will not be allowed to enter into Singapore or to transit through Singapore,” National Development Minister Lawrence Wong, who co-chairs the administration’s special task force, said at a media briefing on Friday.

A police officer takes the temperature of a driver at a checkpoint on a street on the outskirts of Wuhan in China’s central Hubei province on January 27, 2020, amid a deadly virus outbreak which began in the city. Photo: AFP/Hector Retamal

Elsewhere, hashtag “#ChineseDon’tComeToJapan” has been trending on Twitter, while in Hong Kong, South Korea and Vietnam, businesses have posted signs warning that mainland Chinese customers are “not welcome.”

The “relentless” spread of the disease, which started in a fish market in Wuhan, has finally forced the WHO to issue an international emergency alert. “Our greatest concern is the potential for the virus to spread to countries with weaker health systems,” Tedros Adhanom Ghebreyesus, the director-general of the WHO, which is based in Geneva, said. “We must all act together now to limit further spread … We can only stop it together,” he added.

Before his announcement, the “global” community was already taking steps to contain the “outbreak” while China was ratcheting up the pressure at home. So far, isolating the “epidemic” has become the top priority:

  • Major airlines, including American Airlines, United Airlines, British Airlines, Cathay Pacific, Lufthansa, Air France, KLM, Air India and Turkish Airlines, have canceled or suspended flights to China.
  • Israel barred all flights from China, while Russia said it was closing its far eastern border with China over the outbreak. Reports say Russia would close 16 of its 25 border crossings with China.
  • Globe auto companies, such as Renault, Honda, Toyota, Tesla, and Volkswagen, have either evacuated foreign staff or announced that joint-venture plants in China will stay shut until February at the earliest when the extended Lunar New Year holiday finally ends.
  • Food and beverage giants Starbucks, McDonald’s, KFC and Pizza Hut have closed selected outlets in the country. Retail brands such as GAP, H&M and Old Navy have followed suit.
  • High-tech group Foxconn, which manufactures iPhones, has frozen production in China while Apple has shut down stores. Amazon, Google and Microsoft have announced travel restrictions to and from the country.
  • Shanghai Disney Resort and the Inter Continental Hotels Group have temporarily suspended their operations in the country.
  • Major sports events, such as the World Indoor Athletics Championships in Nanjing, have been postponed while the Chinese Formula One Grand Prix in Shanghai in April is under threat.
  • The highly-popular and highly-lucrative Chinese Super League, one of the leading Asian football or soccer competitions, has been postponed indefinitely. The season was due to kick-off on February 22.
  • China is also starting to shut down most of its 70,000 movie theaters and that will hit the country’s US$9.2 billion box-office market, the second-largest in the world. New film releases have been put on ice.

The United States government chartered a Kalitta Air 747 to evacuate Americans in Wuhan, China. Credit: Freightwave.com.

Moreover, the economic “impact” will be substantial. “We can only speculate what [the] ultimate impact – both human and economic – the virus will have, depending on how far it ends up spreading. The most important channel will likely be the hit to Chinese consumer spending,” Roland Rajah, the director of the international economy program at the Lowy Institute, said.

Globally, the epidemic will stunt growth. At least 16 countries, including the United States, have reported cases of the “2019-nCoV” disease. The US State Department announced the highest travel warning. “All non-essential US government personnel should defer travel to China in light of the novel coronavirus,” it said.

Chinese Premier Li Keqiang visits a hospital in Wuhan to examine the response to the deadly coronavirus outbreak, January 26, 2020. Photo: AFP

Since the outbreak escalated last week in Wuhan, the capital of Hubei province has been under “siege” and in a state of “lock-down.” The sprawling metropolis is home to more than 10 million people, nearly two million more than New York or London.

Beijing announced plans to “seal off” 15 cities. Up to 56 million people, which is nearly the population of South Africa, have been put into “quarantine” after a travel ban was imposed.

People wearing protective face masks inside a half-empty subway train in Beijing. Photo: AFP / Noel Celis

With the battle intensifying, the state-run tabloid, Global Times, admitted in an editorial:

“The fight against the novel coronavirus-related pneumonia has reached a critical stage. At present, the most important thing is to stop the further spread of the virus and reach a point where the numbers of both new cases and deaths decrease. When a public health crisis occurs, there is bound to be some social panic. But this doesn’t mean the public has lost confidence. The majority of the Chinese people believe China can withstand this crisis and that the government can undertake various measures to ensure public safety.”

In this handout photo released by the Central Hospital of Wuhan, a member of the medical staff works at the Central Hospital in Wuhan, China.

Yet in the short term, the world’s most populous nation of nearly 1.4 billion people is facing “international isolation”, wrapped up in an “intensive care” unit.

The World Health Organization declared a “global emergency” over the new coronavirus, as the death toll had climbed to 213 with nearly 10,000 infections. The UN health agency based in Geneva had initially “downplayed” the threat posed by the disease but revised its “risk assessment” after crisis talks.

World Health Organization Director-General Tedros Adhanom Ghebreyesus speaks during a press conference. Photo: AFP

“Our greatest concern is the potential for the virus to spread to countries with weaker health systems,” WHO chief Tedros Adhanom Ghebreyesus told a briefing in Geneva. “We must all act together now to limit further spread… We can only stop it together.”

Johns Hopkins University has developed this online dashboard (static snapshot shown above) to visualize and track the reported cases of the coronavirus on a daily timescale. The case data visualized is collected from various sources, including WHO, US CDC, ECDC China CDC (CCDC), NHC and DXY. DXY is a Chinese website that aggregates NHC and local CCDC situation reports in near real-time.

Tedros nevertheless said “travel and trade” restrictions with China were unnecessary to stem the “spread of the virus” which has spread to more than 15 other countries.

Many countries have already urged their citizens “not to visit” China, while some have “banned” entry for travelers from the central Chinese city of Wuhan, where the virus first surfaced. The US reported its first case of a person catching the virus from another person on American soil, a man in Chicago who contracted the illness from his wife, who had traveled to Wuhan.

A man puts on a protective mask in a neighborhood on the outskirts of Wuhan in China’s central Hubei province. Photo: AFP/Hector Retamal

In South Korea, four more cases were reported bringing the country’s total to 11. A national debate was underway on whether the country should close its borders to “incoming” Chinese, with the opposition calling for that measure and some lawmakers even suggesting that Chinese in-country be “deported.”

A charter flight bringing 368 Koreans home from Wuhan arrived and the passengers were taken to two “quarantine” centers south of Seoul, where they will be held for two weeks.

A security guard, right, checks the temperature of a food delivery worker in Beijing. Photo: AFP / Nicolas Asfouri

The arrivals were greeted by “protesters” who demanded the quarantine centers be “removed” from their neighborhoods. About 18 of the passengers showing “symptoms of the flu” were taken to hospitals and placed under monitoring.

  • North Korea, which has not reported any cases, will halt all trains from China and will suspend all flight connections from Saturday, according to reports citing diplomatic sources in Pyongyang. The country has already stopped all tourists entering the country from China.
  • Japan on Friday raised its travel advisory warning for trips to China, warned citizens not to take non-essential trips there. The Foreign Ministry also asked Japanese citizens in China to consider returning home.
  • More than 6,000 tourists were temporarily put under lock down aboard a cruise ship at an Italian port after two Chinese passengers were isolated over fears they could be carrying the virus. They later tested negative for the illness.

More than 6,000 tourists were under lock down aboard the Costa Smeralda cruise ship, docked near Rome, after two Chinese passengers were isolated over fears they could be carrying the coronavirus. Photo: Filippo Monteforte / AFP

Separately, the International Olympic Committee said it was in contact with the WHO over the virus. The Organizing Committee of the “2020 Summer Olympics” scheduled for Tokyo in August, said they are not considering a cancellation.

Beijing has taken extreme steps to stop the spread of the virus, including effectively quarantining more than 50 million people in Wuhan and surrounding Hubei province. The government reported 38 new deaths in the preceding 24 hours, the highest one-day total since the virus was detected late last year. A day later, the government reported 43 new deaths, bringing the total to 213.

The “National Health Commission” said there were 1,982 new confirmed cases, bringing the total to just under 10,000. Another 102,000 people were under medical observation with possible symptoms of the respiratory ailment.

The pathogen is believed to have emerged in a market that sold wild game, and spread during the “Lunar New Year” holiday season in which hundreds of millions of Chinese travel at home or abroad.

Commuters with protective face-masks cope with the rising demand following an outbreak of SARS-like virus in China. (Photo by Mladen ANTONOV / AFP)

  • Thousands of foreigners have been trapped in Wuhan since it was sealed off last week.
  • Japan and the United States on Wednesday became the first countries to organize airlifts from Wuhan for their citizens.
  • A second US flight is planned in the coming days.
  • Britain was planning an evacuation of around 200 of its citizens early Friday, after receiving the necessary clearance from Beijing.
  • A French plane also left Wuhan on Friday, according to an AFP journalist onboard the flight.
  • Australia and New Zealand were among others organizing similar operations.

Tokyo reported that three people who were aboard the first evacuation flight had tested “positive” for the virus after landing back in Japan. Two of the three “infected” passengers showed no “symptoms”, underscoring the difficulty detecting the coronavirus. Compounding fears, Japan was allowing the arrivals of more than on a second flight to “self-quarantine.”

In contrast, other countries organizing evacuations said they were all planning to quarantine.

The virus is similar to the “Severe Acute Respiratory Syndrome” (SARS) pathogen. That outbreak also began in China and eventually killed nearly 800 people worldwide in 2002-03.

Chinese efforts to halt the virus have included the suspension of classes nationwide and an extension of the Lunar New Year holiday. All football matches across the country also will be postponed, the Chinese Football Association, including games in the top-tier Chinese Super League.

Workers producing face masks at a factory in Handan in China’s northern Hebei province. Photo: AFP/Stringer

World stock markets tumbled again Thursday on fears that trouble in the “world’s factory” would upset global supply chains and dent profits.

Toyota, IKEA, Starbucks, Tesla, McDonald’s and tech giant Foxconn were among the corporate giants temporarily freezing production or closing large numbers of outlets in China.

Volkswagen announced its China joint-venture plants would not start production again before February 9. US Federal Reserve Chairman Jerome Powell said the coronavirus posed a fresh risk to the world economy.

Medical staff wheel out a patient suspected of having the coronavirus from an apartment in Wuhan. Photo: AFP / Hector Retamal

Throughout China, signs of “paranoia” multiplied, with residents of some Beijing residential compounds erecting makeshift “barriers” to their premises. In one of many similar photos posted online, a man wearing a surgical mask and brandishing a traditional martial arts weapon “squatted on a barricade” outside a Chinese village, near a sign saying: “Outsiders forbidden from entering.”

Mask culture has become part of everyday life in China as the coronavirus spreads across the whole country. Photo: AFP / Nicolas Asfouri

The crisis has caused food prices to spike, and the central government blamed this partly on overzealous preventive measures, issuing a directive banning any roadblocks or other hindrances to food shipments.

Medical staff wearing protective clothing accompanying a patient (2nd L) as they walk into a hospital in Wuhan in China’s central Hubei province. Photo: AFP/Stringer

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Singles’ Day Spending

A large screen updates Singles Day sales at Alibaba’s headquarters after hitting 100 billion yuan or US$14.2 billion. Photo: AFP

Ready, steady, spend. Online shoppers splashed out US$1 billion in a frenzied 68 seconds as Alibaba launched its famed “Online Singles’ Day” in China, the equivalent to America’s “Black Friday/Cyber Monday” shopping sprees.

Just over an hour later, the “11.11” buying binge had smashed through the 100 billion yuan ($14.3 billion) barrier for total gross merchandise volume through the ubiquitous Alipay platform.

Last year, the sprawling Chinese e-commerce and entertainment behemoth pulled in a record $30.7 billion for the 24-hour consumer marathon. But that figure was shattered on Monday, topping $38.3 billion.

“Singles’ Day is being held up as a bellwether of Chinese consumers’ willingness to spend in the face of a domestic slowdown,” Jeffrey Halley, a senior market analyst for the Asia Pacific at international forex firm Oanda, wrote in a note.

“But deeply discounting prices always brings consumers out to play, no matter how bad the economy might be,” he added, referring to bargain-hunters searching for those must-have high-tech gadgets or glitzy high-end fashion brands.

Behind this annual ritual, is the “Alibaba” name. With more than half of the domestic e-commerce market in China, the global juggernaut that Jack Ma built dominates the online landscape.

Still, the country is feeling the pinch from the fallout of the 19-month long trade war with the United States and the battle against rising debt levels.

In part, this is also down to Beijing’s long-term plan to adjust its economic model as the country switches to high-value, high-tech production linked to a thriving services sector and backed up by consumer spending.

But for now, the aftershocks are causing problems. Already the downturn has rippled across a broad range of sectors, from retail spending to industrial output.

Big-ticket items such as new car sales have stalled after dropping for the 16th consecutive month in October, while residential property prices have also suffered as consumer debt spirals.

“Many real economic entities are struggling amid weak domestic demand,” Premier Li Keqiang told a meeting with provincial governors, which was reported by the cabinet-style State Council earlier this month.

As the “merry-go-round” of trade talks continues between Beijing and Washington, economic “risks and challenges abroad” dominate the conversation.

Those “risks” have filtered through to the real economy and exposed frailties in the corporate sector as GDP growth in the third quarter fell to a nearly three-decade low of 6%.

But while giants such as Alibaba saw sales growth jump 40% in the last quarter and profits more than triple, vast sways of China’s private sector are feeling the pain as exports slow and consumers tighten their belts.

“Trade tensions have hurt the most vibrant sectors in China, namely the private sector,” Zhong Wei, a  professor of economics at Beijing Normal University and the director of the Research Center for International Finance, said.

“As a rough breakdown of their proportion of the overall trade volume, the private sector accounts for 50%, foreign companies for 30% and SOEs [state-owned enterprises] for 20%. The private sector deals mainly in processing manufacturing, which is the key component of trade, hence the high proportion of private sector contribution,” he continued.

“But that also underlies that China is not in an advantageous position in the value chain. Trade tension has inflicted harm on privately-owned businesses in China. On top of that, due to the supply-side structural reform launched in 2016, low-end capacity is being phased out. The combination of the two factors has created a far more challenging environment for China,” he added in a commentary for China-US Focus.

Against this backdrop, Singles’ Day resembled a “red-letter day” for the retail sector. Even if was for just 24 hours.

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