Chinese markets plunge as rising virus death toll fuels fears for global growth

Investors look at a screen showing stock market movements at a securities company in Hangzhou in China's eastern Zhejiang province on February 3, 2020. (AFP)
Short Url
Updated 03 February 2020

Chinese markets plunge as rising virus death toll fuels fears for global growth

  • Chinese markets dive in first session since Jan. 23
  • Beijing facing mounting international isolation

BEIJING: The death toll from a coronavirus epidemic in China rose to 361 and Chinese stock and commodity markets fell heavily on Monday as investors retreated into safe-haven assets in the first trading session after an extended Lunar New Year break.
Chinese stock and commodity markets plunged at the open in their first session since Jan. 23, when the outbreak of the newly identified virus had claimed only 17 lives in Wuhan city in Hubei province.
Since then the flu-like virus has spread to more than two dozen other countries and regions, with the first death outside of China reported on Sunday, that of a 44-year-old Chinese man who died in the Philippines after traveling from Wuhan.
The total number of deaths in China rose to 361 as of Sunday, up 57 from the previous day, the National Health Commission said. The number of new confirmed infections in China rose by 2,829, bringing the total to 17,205.
The Shanghai Composite index shed 8% to hit one-year low on Monday, wiping almost $370 billion off the market value, according to Reuters calculations.
The yuan began trade onshore at its weakest level this year . Iron, oil and copper traded in Shanghai all dropped by their daily limits, catching up with global price falls as the spread of the virus has weighed on the world’s growth outlook.
Investors were bracing for volatility when onshore trade in Chinese stocks, bonds, yuan and commodities resumed, following a steep global selldown on fears about the impact of the virus on the world’s second-biggest economy.
Looking to head off a panic, China’s central bank said it would inject 1.2 trillion yuan ($173.8 billion) of liquidity into the markets via reverse repo operations on Monday.
Beijing also said it would help firms that produce vital goods resume work as soon as possible, state broadcaster CCTV reported.
But while stock markets reopened, most provinces have extended the Lunar New Year holiday to try and contain the virus, with workers in Hubei not scheduled to return to work until after Feb. 13.
Cities like Wuhan remain in virtual lockdown with travel severely restricted, and China is facing mounting international isolation as well due to restrictions on flights to and from the country.
At least another 171 cases have been reported in more than two dozen other countries and regions, including the United States, Japan, Thailand, Hong Kong and Britain.
The World Health Organization has declared the outbreak a public health emergency of international concern, but said global trade and travel restrictions are not needed.
More than 250 people from 30 countries arrived in France on Sunday after being flown out of Wuhan, the center of the outbreak, in the latest evacuation of foreign nationals from the locked-down city.
Australia evacuated 243 people, many children, from Wuhan on Monday and will quarantine them on a remote island in the Indian Ocean off its northwest coast.
Australia on Saturday followed the United States in barring entry to all foreign nationals traveling from mainland China.
The Group of Seven leading industrialized democracies are trying to find a common approach for dealing with the fast-spreading new coronavirus, German Health Minister Jens Spahn said on Sunday.
The virus is thought to have emerged late last year in a Wuhan market illegally trading wildlife. It can cause pneumonia and spreads between people in droplets from coughs and sneezes.
It has created alarm because it is spreading quickly and there are still important unknowns surrounding it, such as its death rate and whether it is able to spread before any symptoms show.
The number of deaths in China from the new virus has now passed the total Chinese toll from the 2002-03 outbreak of Severe Acute Respiratory Syndrome (SARS), another coronavirus which emerged from China and killed more than 800 people around the world.
Even so, Chinese data on the numbers of infections and deaths suggests the new coronavirus is less deadly than the SARS outbreak, although such numbers can evolve rapidly.


Cheese, car parts and Kobe beef: UK’s trade deal with Japan

EU Chief negotiator Michel Barnier walks to a meeting in London, Friday, Oct. 23, 2020. (AP)
Updated 24 October 2020

Cheese, car parts and Kobe beef: UK’s trade deal with Japan

  • Britain hopes new agreement will provide better access to Japanese markets

TOKYO: Britain says the post-Brexit trade deal signed with Japan on Friday “secures major wins that would be impossible as part of the EU”, though its substance is largely similar to the current EU-Japan accord.

Britain hopes the agreement will boost trade with Japan by around $20 billion when it comes into force in January after being ratified by lawmakers in both countries.
Here are four things to know about the bilateral deal: When the deal was announced last month, Britain said it meant around 99 percent of its exports to Japan would be tariff-free.
Under the current EU-Japan trade agreement, in place since February 2019, the vast majority of custom duties are also absent.
The European Union says that under its deal, the bloc’s meat exports to Japan increased by 12 percent, while electrical machinery exports were boosted by 16.4 percent.
“In terms of market access, we have maintained Japan’s high level access to the UK market as under the Japan-EU deal,” Japan’s Foreign Minister Toshimitsu Motegi said on Friday.
“And for some products such as train cars and autoparts, we have improved access.”
The Japan-UK deal has a particular focus on exports in the food and drink, finance and tech sectors, and aims to reduce red tape for British pork, beef and salmon farmers.
It also includes brand protection for British goods, including English sparkling wine, Yorkshire Wensleydale cheese and Welsh lamb.
In return, the UK government says consumers will be able to buy “cheaper, high-quality Japanese goods — from udon noodles to Bluefin tuna and Kobe beef.”

FASTFACT

There are currently 241 British businesses in the agriculture and food sector who import from Japan, and 693 who export goods to Japan.

There are currently 241 British businesses in the agriculture and food sector who import from Japan, and 693 who export goods to Japan, the UK government says.
But unlike the Japan-EU deal, this agreement lacks quotas for agricultural exports like cheese, according to the Financial Times, and instead allows Britain to use any such quotas left over by the EU.
The deal includes new provisions on digital trade that aim to ease the flow of data, among other changes.
“This deal doesn’t just preserve existing benefits, but it strikes out in services like digital and data, where the UK and Japan both have strengths, and hope to collaborate in future,” said Britain’s International Trade Secretary Liz Truss.
The UK hopes the deal will help its companies that supply services — from financial to telecoms and transport — gain access to the Japanese market.
While some analysts have cast doubt on how much difference the new digital provisions will make, British businesses have welcomed the agreement.
Carolyn Fairbairn, director-general of the Confederation of British Industry, called it a “breakthrough moment”.
Japan accounted for around just two percent of Britain’s trade last year, government statistics show — roughly the same as Norway.
But the deal could act as a bridge for the UK to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, also known as TPP-11 — a free-trade deal between 11 countries including Japan, Canada, Mexico, Vietnam and Australia.
It was previously known as the Trans-Pacific Partnership (TPP) and had been slated to be the world’s largest trade pact before the United States withdrew in 2017, blocking its ratification.
Truss said the deal “paves the way” for Britain to join the partnership — but this is likely to be a complex manoeuvre that will take years.