Employees across China have fallen on hard times in the wake of the coronavirus outbreak.
Pay freezes, reduced salaries and unpaid leave are now all too common occurrences across the world’s second-largest economy, and as Bloomberg writes in a short piece documenting the employment malaise, that doesn’t bode well for consumption. “If you skip your daily latte for two months, you’re not likely to make up for those missed drinks later in the year”, Chang Shu, Chief Asia Economist for BBG Intelligence, said. Incidentally, economists were at pains to explain that same reality to the Trump administration during the government shutdown over wall funding.
At a briefing in Beijing on Wednesday, Tang Shemin, an official at the National Development and Reform Commission, said nearly two thirds of the country’s oil refineries have restarted production, while 80% of major nonferrous producers are back online.
Meanwhile, Beijing is considering a move to shore up airlines with cash injections and/or merger plans that would see major, state-controlled carriers absorb smaller players.
Nothing is final.
“Five weeks ago, China was the third largest international aviation market in the world; today it ranks 25th, just behind Portugal and slightly ahead of Vietnam, some change in just a few weeks!”, OAG Aviation Worldwide exclaimed, in a recent report. They added the following color:
The latest data for the week commencing the 17th February shows a further reduction in international capacity from China of 270,000 seats a week bringing the overall capacity reduction since the 20th January to some 1.7 million seats; a near 80% reduction. Japan, Thailand and Chinese Taipei are the largest losers of capacity week over week; in the case of Japan some 47,700 fewer seats are scheduled some 36% fewer than one week earlier.
We’ve noted before the “ripple” effect of the virus on markets closest to China and the table below illustrates precisely how much capacity has been lost in what are the top ten international markets from China.
That is quite something, and it underscores why Beijing is keen on potentially propping up the market. Airline shares bounced Wednesday, and have limped higher after falling sharply in the days leading up to, and coming off of, the Lunar New Year holiday.
The broader mainland market is generally stable after recouping the post-holiday plunge.
Meanwhile, China has expelled a trio of Wall Street Journal reporters.
“China revoked the press credentials of three… reporters based in Beijing, the first time in the post-Mao era that the Chinese government has expelled multiple journalists from one international news organization at the same time”, the Journal said Wednesday. “China’s Foreign Ministry said the move… was punishment for a recent opinion piece published by the Journal“.
China’s Foreign Ministry spokesman Geng Shuang lambasted an article published on February 3 called “China is the real sick man of Asia“. It contains passages like this one:
The mighty Chinese juggernaut has been humbled this week, apparently by a species-hopping bat virus.
And then there’s this bit:
The Wuhan government was secretive and self-serving; national authorities responded vigorously but, it currently appears, ineffectively. China’s cities and factories are shutting down; the virus continues to spread. We can hope that authorities succeed in containing the epidemic and treating its victims, but the performance to date has shaken confidence in the Chinese Communist Party at home and abroad.
Geng called the title of the article “racist” and declared that it “denigrated” China’s efforts to beat back the outbreak.
“The Chinese people do not welcome media that publish racist statements and maliciously attacks China”, Geng remarked, adding this:
The editors used such a racially discriminatory title, triggering indignation and condemnation among the Chinese people and the international community. Regrettably, what the WSJ has done so far is nothing but parrying and dodging its responsibility. It has neither issued an official apology nor informed us of what it plans to do with the persons involved. As such, it is decided that from today, the press cards of three WSJ journalists will be revoked.
One imagines that critics of this flagrant curtailment of press freedom will multiply faster than virus victims on Wednesday, especially across western social media outlets.
Of course, many of those critics won’t mention Donald Trump’s various and sundry attacks on America’s free press, including allusions to changing libel laws and closing down entire media outlets for criticizing the administration, efforts some critics have long compared to China’s policies.
At a July 2018 rally for veterans at a Missouri convention, Trump famously told supporters that “‘What you’
Sounds quite a bit like something the People’s Daily would write, now doesn’t it?