China’s virus-hit cities start to restore production

A woman wearing a protective mask to help stop the spread of coronavirus walks at an empty shopping mall in the Sanlitun area in Beijing. (AFP/File)
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Updated 19 February 2020

China’s virus-hit cities start to restore production

  • Beijing is conscious of striking a balance between stamping out the epidemic which has infected more than 70,000 people and killed over 2,000 people

BEIJING: Big manufacturing hubs on the Chinese coast are starting to loosen curbs on the movement of people and traffic while local governments prod factories to restart production, following weeks of stoppages due to the coronavirus outbreak.

Beijing is conscious of striking a balance between stamping out the epidemic which has infected more than 70,000 people and killed over 2,000 people, and shielding the already weakened economy from more damage.

The city of Foshan, a large manufacturer of electronics and household appliances in southern Guangdong province, said late on Tuesday that businesses no longer need to seek prior approval before resuming operations and they need not require returning workers to show proof of their health.

On Monday, the nearby city of Zhongshan similarly lowered such administrative barriers.

In eastern Zhejiang province over the weekend, the cities of Hangzhou and Ningbo also pared back the approval process for companies looking to restart.

“Macro and micro data suggest production activities are resuming at a slow pace in China, reaching 60-80 percent of normal levels by end-Feb and normalizing only by mid-to-late March,” Morgan Stanley wrote in a research noted.

“If the spread of the virus is not contained within the next two weeks, the disruption to production could extend into the second quarter.”

Analysts polled by Reuters expect China’s economic growth could slow to 4.5 percent in the first quarter from 6 percent in the previous quarter, but some recently downgraded forecasts again into the 3-4 percent range, citing delays in resuming production.

Some cities in Guangdong and Zhejiang this week organized buses and trains to ferry workers back from their hometowns.

The city of Taizhou, in Zhejiang, even arranged for several planes to pick up migrant workers from Chongqing, Guiyang, Chengdu, Kunming and Xian, with the local government of Taizhou footing a third of the bill.

The outbreak has also chilled consumer demand and hammered the services sector, with restaurants, hotels, cinemas and travel agents among the segments most visibly hit.

China’s auto market is likely to see sales slide over 10 percent in the first half of 2020 because of the epidemic.

In a bid to revive consumption, Foshan announced stimulus measures for its auto market, the first city in China to do so amid the outbreak.

The city government will offer subsidies of 2,000 yuan ($285) for purchases of new cars and 3,000 yuan for replacement of existing cars, according to a document published on Feb. 3 on its website.


Lebanon plunged into ‘deliberate depression’: World Bank

Updated 01 December 2020

Lebanon plunged into ‘deliberate depression’: World Bank

  • The fall 2020 edition of the Lebanon Economic Monitor predicted the economy will have contracted by 19.2 percent this year
  • Lebanon’s economy started collapsing last year as a result of years of corrupt practices and mismanagement

BEIRUT: Lebanon’s economy is sinking into a “deliberate depression,” the World Bank said Tuesday in a damning report stressing the authorities’ failure to tackle the crisis.
The fall 2020 edition of the Lebanon Economic Monitor predicted the economy will have contracted by 19.2 percent this year and projected a debt-to-GDP ratio of 194 percent next year.
“A year into Lebanon’s severe economic crisis, deliberate lack of effective policy action by authorities has subjected the economy to an arduous and prolonged depression,” a World Bank statement said.
Lebanon’s economy started collapsing last year as a result of years of corrupt practices and mismanagement.
The crisis was made worse by a nationwide wave of anti-government protests that paralyzed the country late last year and the Covid-19 pandemic this year.
The August 4 Beirut port blast, one of the largest non-nuclear explosions in history, brought the country to its knees and further fueled public distrust.
“Lebanon is suffering from a dangerous depletion of resources, including human capital, with brain drain becoming an increasingly desperate option,” the World Bank warned.
In 2020, Lebanon defaulted on its debt, banks imposed capital controls and inflation has reached triple-digit rates, dragging the country into its worst ever economic crisis.
Instead of taking emergency measures to rescue the economy, Lebanon’s political elite has continued to dither and bicker.
The previous government headed by Hassan Diab failed to adopt ambitious policies to tackle the crisis. It resigned under pressure over the blast nearly four months ago and a new cabinet has yet to be formed.
“Lack of political consensus on national priorities severely impedes Lebanon’s ability to implement long-term and visionary development policies,” said Saroj Kumar Jha, World Bank regional director.
He called for the quick formation of a new government capable of implementing short-term emergency measures and addressing long-term structural challenges.
“This is imperative to restore the confidence of the people of Lebanon,” he said.
An annual index compiled by Gallup that tracks people’s experience of stress and sadness said “no other country in the world saw negative experiences skyrocket across the board as much as Lebanon.”
The Negative Experience Index’s data was collected before the Beirut port blast, Lebanon’s worst ever peace time disaster.