China viral outbreak ‘a global risk’

An image of Salvador Dali looms over a man wearing a protective face mask at a shopping mall in Shanghai. China’s economy faces increasing disruption a month after the coronavirus outbreak which has claimed 636 victims. (AFP)
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Updated 09 February 2020

China viral outbreak ‘a global risk’

  • Tech titan Ericsson pulls out of Barcelona summit over safety fears as Fed warns of threat to world’s supply networks

BEIJING: More than a month after the outbreak of China’s deadly virus, the economic damage is being felt by more businesses and is threatening the outlook for the global economy.

In a report on Friday, the Federal Reserve warned that the virus represents an international risk.

“The recent emergence of the coronavirus,” the Fed said in a semiannual report on monetary policy, “could lead to disruptions in China that spill over to the rest of the global economy.”

Economists warn that the longer the outbreak and the lockdown of Wuhan and other Chinese cities last, the worse the damage will be for a global economy that depends on supply chains that link China with trading partners around the world. The viral outbreak has thrown the travel industry into chaos, threatening billions in losses and keeping millions of would-be travelers at home.

The Trump administration said on Friday that the virus may delay some of the purchases of US goods China is supposed to make under an interim trade deal with the US. But Larry Kudlow, President Donald Trump’s top economic adviser, said that President Xi Jinping had assured Trump that China would meet the purchase target. “Because of their conditions, there may be some delays,” he said.

Ericsson, one of the main suppliers of wireless networks and a rival to Huawei, is pulling out of the Mobile World Congress in Barcelona this month. The Swedish company said that because the show draws thousands of visitors, “even if the risk is low, the company cannot guarantee the health and safety of its employees and visitors.”

The organizers said that Ericsson’s decision will hurt the event, but they do not plan to cancel. Huawei recently said this week it would still attend.

Japanese automaker Nissan Motor Co. said that sales in China in January by the company and its local partners fell 11.8 percent from a year earlier to 118,143 vehicles due to the virus outbreak and the extension of the Lunar New Year holiday. Nissan said earlier it was considering reopening most of its factories in China on Monday but would wait until at least Feb. 14 for facilities in and around Wuhan, the city at the center of the outbreak. 

Toyota said it was keeping its factories in China closed for an extra week, and will decide then whether to resume production. Toyota Motor Corp. has 12 plants in China. Honda said its three auto-assembly plants in Wuhan would stay closed through Feb. 13.

Japanese clothing retailer Uniqlo said it has closed 350 stores, or about half, of its 750 outlets in China, to comply with shutdowns of public transportation and closures of malls. Parent company Fast Retailing says about 20 percent of its sales come from China. British firm Burberry, which gets about 40 percent of its revenue from China, shut 24 of 64 stores in China, and said that footfall had dropped by as much as 80 percent. The impact in Hong Kong is bigger than from the protests, which had halved sales there in the last quarter.

L’Oreal joined the growing list of beauty brands expressing concern over the blow to sales due to travel restrictions that are reducing demand at duty free shops. The company said it expected a “temporary impact” on Asia’s beauty market, but past experience suggests that “after a period of disturbance, consumption resumes stronger than before.”


Saudi imports from China up 17.8 percent in 2020 to $28.1 billion

Updated 24 January 2021

Saudi imports from China up 17.8 percent in 2020 to $28.1 billion

  • Bilateral trade between the two countries remains steady amid the ongoing global health crisis

RIYADH:  Saudi imports from China rose 17.8 percent year-on- year in 2020 to $28.1 billion, according to a report from Mubasher, citing figures from China Customs.

Despite this increase, the Kingdom’s overall trade surplus with China was down 63.9 percent last year to $6.2 billion, the report said.

Trading between the two nations has remained steady.
On Wednesday, Reuters news agency reported that Chinese govern- ment data showed the Kingdom was still the world’s biggest oil exporter, as well as beating Russia to keep its ranking as China’s top crude supplier in 2020.

Oil demand in China, the world’s top oil importer, remained strong last year despite the challenges brought on by the coronavirus disease (COVID-19) pandemic. Chinese imports rose 7.3 percent to a record 542.4 million tons, or 10.85 million barrels per day (bpd).

HIGHLIGHTS

  • Saudi shipments to China in 2020 rose 1.9 percent from a year earlier to 84.92 million tons.
  • The Kingdom’s overall trade surplus with China was down 63.9 percent last year to $6.2 billion.
  • In 2020, China became the GCC’s top trading partner, replacing the EU for the first time

Saudi shipments to China in 2020 rose 1.9 percent from a year earlier to 84.92 million tons, or about 1.69 million bpd, data from the General Administration of Chinese Customs showed.

Political commentator Zaid M. Belbagi wrote in an Arab News opinion piece that, with the increased importance of land and sea routes connecting Asia with Europe and Africa, China increasingly saw relations with the Arab world as “central” to its geostrategic ambitions.

“There is, however, a disconnect between the expansion of Chinese involvement in the region across the political and economic realms and the cultural and diplomatic connectivity required to deepen ties that will not only ensure Chinese interests, but also encourage Arab states to partake in the new world China is building in its own image,” he said.

Saudi-China relations have strengthened over the years. During the COVID-19 pandemic, ties were further strengthened with the two countries offering each other assistance and staunch support.

The past three years have marked a rapid increase in Saudi- China links. King Salman visited the country as part of a six-country Asian tour early in 2017, setting the seal on a “comprehensive strategic partnership” between the two
countries when he met Chinese President Xi Jinping.

A joint high-level committee was established to guide future economic development strategy.

That was followed by a later visit by Crown Prince Mohammed Bin Salman, adding greater depth to the relationship and further aligning the two countries’ main economic development plans — the Belt and Road Initiative by which China seeks to play a leading role in regional development, and the Vision 2030 strategy aimed at diversifying Saudi Arabia away from oil dependency.

China has also become the top export destination of Gulf Cooperation Council (GCC) petrochemicals and chemicals, accounting for about 25 percent of GCC exports.


At $180 billion, the GCC (GCC) trade with China accounts for over 11 percent of the bloc’s overall trade. In 2020, China became the GCC’s top trading partner, replacing the EU for the first time.

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