China central bank vows to support virus-hit economy

China central bank vows to support virus-hit economy
Pan Gongsheng, Deputy Governor of People's Bank of China (PBC) and Director of the State Administration of Foreign Exchange. (AFP)
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Updated 08 February 2020

China central bank vows to support virus-hit economy

China central bank vows to support virus-hit economy
  • Analysts believe growth could decelerate sharply by 2 percentage points or more from 6 percent in the last quarter

BEIJING: China’s central bank will step up support for the economy to cushion the blow from a coronavirus outbreak, but activity is expected to recover once the virus is brought under control, one of its deputy governors said on Friday.

The People’s Bank of China (PBOC) is closely watching the impact of the outbreak on the world’s second-largest economy, and is preparing policy tools to offset pressure, Vice Governor Pan Gongsheng said on Friday.

“In terms of monetary policy, the next step is to strengthen counter-cyclical adjustments, maintain reasonable and ample liquidity and provide a sound monetary and financial environment for the real economy,” Pan said.

“In the context of the epidemic and the downward pressure on the economy, it is more important to maintain economic growth.”

Widespread travel and public health restrictions are taking a toll on tourism, restaurants and the service sector, while many factories have suspended operations as authorities try to contain the virus.

The death toll rose to 636 on, Thursday, with 31,161 cases confirmed.

Sources have told Reuters that Chinese policymakers are preparing measures, including more fiscal spending and interest rate cuts, amid expectations the outbreak will have a devastating impact on first-quarter growth.

Analysts believe growth could decelerate sharply by 2 percentage points or more from 6 percent in the last quarter, with business disruptions increasingly spilling over into the global economy. But they say business and consumer activity could rebound sharply if the outbreak peaks soon, much like the pattern during the SARS epidemic in 2003.

Pan reiterated that China had sufficient policy tools to cope with the pressure, such as using targeted reserve requirement cuts, relending and rediscount, to support key sectors.

Pan said the PBOC’s recent liquidity injections have helped lower market interest rates, which could affect China’s key lending rate — the loan prime rate (LPR), when it is next set on Feb. 20.

Pan said the cost of special relending, at 300 billion yuan, from the PBOC to commercial banks is relatively low. The PBOC also has told banks to cap rates on loans for selected firms at 3.15 percent, 1 percentage point lower than the latest LPR.

The PBOC injected 1.7 trillion yuan ($242.74 billion) via reverse repos earlier this week to shore up confidence and cut some key money market interest rates.

The government will also cut taxes and fees, Vice Finance Ministry Weiping said at the briefing.

Weighed down by weak demand at home and abroad and the Sino-US trade war, China’s economic growth had already slowed to 6.1 percent in 2019, the weakest in nearly three decades.

The ruling Communist Party needs growth of about 5.6 percent this year to fulfil its goal of doubling GDP and incomes in the decade to 2020.


Antivirus software creator charged with cheating investors

Antivirus software creator charged with cheating investors
Updated 06 March 2021

Antivirus software creator charged with cheating investors

Antivirus software creator charged with cheating investors
  • Authorities say that McAfee and cohorts fooled investors through social media to make over $13 million
  • McAfee and his team are accused of capitalizing on zeal over the emerging cryptocurrency market as they lied to investors

NEW YORK: Antivirus software entrepreneur John McAfee was indicted on fraud and money laundering conspiracy charges alleging that he and cohorts made over $13 million by fooling investors zealous over the emerging cryptocurrency market, authorities said Friday.
McAfee, 75, was charged in a newly unsealed indictment in Manhattan federal court along with Jimmy Gale Watson Jr., who served as an executive adviser on what prosecutors described as McAfee’s “so-called cryptocurrency team.”
Prosecutors said Watson, 40, was arrested Thursday night in Texas and would make an initial appearance Friday before a federal magistrate judge in Dallas. McAfee, authorities said, is detained in Spain on separate criminal charges filed by the US Justice Department’s tax division.
Attorney Arnold Spencer, representing Watson, said his client is a decorated former Navy Seal.
“He fought for other people’s rights and liberties, and he is entitled to and looks forward to his day in court to exercise some of those very rights,” he said in an email.
“Criminal indictments are blunt instruments, not precise scalpels,” Spencer added. “This is not the right place to debate whether cutting edge technologies like cryptocurrencies are securities, commodities, or something else.”
It was not immediately clear who might represent McAfee. There was still no lawyer listed for him in the Memphis, Tennessee, federal court where tax charges were lodged against him in October.
“McAfee and Watson exploited a widely used social media platform and enthusiasm among investors in the emerging cryptocurrency market to make millions through lies and deception,” US Attorney Audrey Strauss said in a statement describing crimes in 2017 and 2018.
“The defendants allegedly used McAfee’s Twitter account to publish messages to hundreds of thousands of his Twitter followers touting various cryptocurrencies through false and misleading statements to conceal their true, self-interested motives,” she added.
In October, McAfee was charged in Tennessee with evading taxes after failing to report income made from promoting cryptocurrencies while he did consulting work, made speaking engagements and sold the rights to his life story for a documentary.
McAfee developed early Internet security software and has been sought by authorities in the US and Belize in the past.
The Tennessee indictment said McAfee failed to file tax returns from 2014 to 2018, despite receiving “considerable income” from several sources.
In July 2019, McAfee was released from detention in the Dominican Republic after he and five others were suspected of traveling on a yacht carrying high-caliber weapons, ammunition and military-style gear, officials on the Caribbean island said at the time.


More than 20,000 US organizations compromised through Microsoft flaw

More than 20,000 US organizations compromised through Microsoft flaw
Updated 06 March 2021

More than 20,000 US organizations compromised through Microsoft flaw

More than 20,000 US organizations compromised through Microsoft flaw
  • The hacks are continuing despite emergency patches issued by Microsoft on Tuesday
  • Microsoft and the person working with the US response blamed the initial wave of attacks on a Chinese government-backed actor

WASHINGTON: More than 20,000 US organizations have been compromised through a back door installed via recently patched flaws in Microsoft Corp’s email software, a person familiar with the US government’s response said on Friday.
The hacking has already reached more places than all of the tainted code downloaded from SolarWinds Corp, the company at the heart of another massive hacking spree uncovered in December.
The latest hack has left channels for remote access spread among credit unions, town governments and small businesses, according to records from the US investigation.
Tens of thousands of organizations in Asia and Europe are also affected, the records show.
The hacks are continuing despite emergency patches issued by Microsoft on Tuesday.
Microsoft, which had initially said the hacks consisted of “limited and targeted attacks,” declined to comment on the scale of the problem on Friday but said it was working with government agencies and security companies to provide help to customers.
It added, “impacted customers should contact our support teams for additional help and resources.”
One scan of connected devices showed only 10% of those vulnerable had installed the patches by Friday, though the number was rising.
Because installing the patch does not get rid of the back doors, US officials are racing to figure out how to notify all the victims and guide them in their hunt.
All of those affected appear to run Web versions of email client Outlook and host them on their own machines, instead of relying on cloud providers. That may have spared many of the biggest companies and federal government agencies, the records suggest.
The federal Cybersecurity and Infrastructure Security Agency did not respond to a request for comment.
Earlier on Friday, White House press secretary Jen Psaki told reporters that the vulnerabilities found in Microsoft’s widely used Exchange servers were “significant,” and “could have far-reaching impacts.”
“We’re concerned that there are a large number of victims,” Psaki said.
Microsoft and the person working with the US response blamed the initial wave of attacks on a Chinese government-backed actor. A Chinese government spokesman said the country was not behind the intrusions.
What started as a controlled attack late last year against a few classic espionage targets grew last month to a widespread campaign. Security officials said that implied that unless China had changed tactics, a second group may have become involved.
More attacks are expected from other hackers as the code used to take control of the mail servers spreads.
The hackers have only used the back doors to re-enter and move around the infected networks in a small percentage of cases, probably less than 1 in 10, the person working with the government said.
“A couple hundred guys are exploiting them as fast as they can,” stealing data and installing other ways to return later, he said.
The initial avenue of attack was discovered by prominent Taiwanese cyber researcher Cheng-Da Tsai, who said he reported the flaw to Microsoft in January. He said in a blog post that he was investigating whether the information leaked.
He did not respond to requests for further comment.


China says wants economy to grow over 6 percent in 2021

China says wants economy to grow over 6 percent in 2021
Updated 06 March 2021

China says wants economy to grow over 6 percent in 2021

China says wants economy to grow over 6 percent in 2021
  • Some analysts suggest the economy could expand by as much as 9% this year

BEIJING: China’s leaders said Friday they had set a target for GDP to grow more than 6 percent this year, as the world’s second largest economy surges out of a pandemic-induced slump.

The global growth powerhouse stuttered in 2020, logging its slowest expansion in four decades as strict virus containment measures at home collided with a freeze in international trade.
The slowdown raised doubts about the Communist Party’s ability to deliver on its pledge of continued prosperity in return for unquestioned political power.
But with the coronavirus largely brought under control domestically, analysts expect a strong comeback, with some suggesting the economy could expand by as much as nine percent this year.
Beijing usually sets a target it feels it can exceed. It did not set one at all last year.
Announcing the figure at the start of the annual legislative session, Premier Li Keqiang said the government had “taken into account the recovery of economic activity.”
The target of over 6 percent also dovetails with future goals, Li said, and these include reform, innovation, and “high-quality development.”
Authorities say they want to create 11 million new urban jobs this year, and keep urban unemployment around 5.5 percent.
Outside observers caution that China’s unemployment figures may not tell the whole story, with many people across the vast nation involved in the informal workforce.
Analysts had widely predicted the continued global uncertainty would make it tricky for China to set a GDP target again this year, and greeted the 6 percent figure as deliberately cautious.
“The bar is set too low ... (it’s) as if there is no target,” ING chief economist for Greater China Iris Pang told AFP.
This could be because Beijing does not want to slash its growth target next year, when distortions from the pandemic subside, added Nomura chief China economist Lu Ting.
The figure also reflects “the shifting focus from quantity to quality of economic growth,” said Zhu Chaoping, a strategist at JPMorgan Asset Management.
That could include resources being allocated to long-term initiatives like environmental protection, Zhu added.
Leaders also did not specify a growth target in its new five-year plan draft published Friday, as is its usual custom, only saying it would be “maintained within a reasonable range.”
China has been trying to rebalance the economy from its export- and investment-led economic model to one driven by consumer spending and high-quality development.
The post-COVID economic rebound saw China’s GDP growth recorded at about 2 percent last year, which made it the only major economy to post positive figures in a year lost to the virus.
With weakness around the world caused by the prolonged pandemic shutdown, capitals around the globe will be watching China’s economic performance eagerly.


Travel industry bets on vaccine passports to draw Brits to Med

Travel industry bets on vaccine passports to draw Brits to Med
Updated 06 March 2021

Travel industry bets on vaccine passports to draw Brits to Med

Travel industry bets on vaccine passports to draw Brits to Med
  • Britain is the only major European country likely to inoculate a large share of working-age adults by summer

LONON/MADRID: The race to roll out vaccination passports is spurring competition among travel companies and tourist destinations for the large number of Britons set to receive COVID-19 shots before the summer.
Thanks to its swift vaccine deployment, Britain is the only major European country likely to inoculate a large share of working-age adults by summer. They may become the first big regional test of digital health credentials in development.
Airlines such as easyJet saw outbound bookings from Britain surge last week as the government raised the prospect of a return to quarantine-free summer travel, and the EU agreed to develop vaccine passports under pressure from tourism-dependent southern countries.
But cooped-up consumers’ getaway plans face reality checks — from unpredictable virus variants to lingering EU divisions over vaccine passports, with France leading resistance from several states over political and discrimination concerns.
Britain’s tentative move toward restoring travel “puts pressure on other countries to do the same, which is good for us,” said Grigoris Tasios of the Greek Hoteliers’ Federation. Greece has eased restrictions for vaccinated Israelis and is discussing a similar arrangement with the UK.
Tourism from Germany, another big travel market lagging the UK on vaccinations, hinges on Berlin dropping quarantines for tested passengers, Lufthansa CEO Carsten Spohr said this week.
In the aftermath of Britain’s departure from the EU, its reputedly unruly tourists are at the center of a battered travel industry’s hopes for the peak season.
Spain, typically Britons’ No. 1 destination by far, has pushed hard for EU vaccination certificates. The island of Mallorca’s mostly shuttered hotels anxiously await details, their spokeswoman Maria Duran said.
“We’re paying very close attention to the UK, the first country to design and share a roadmap for restoring mobility,” she said. Spain saw UK visitor numbers plunge to 3.1 million last year from more than 18 million in 2019.
Athens is appealing directly to British consumers.
Those with shots will be spared tests, with or without the EU’s blessing, Tourism Minister Harry Theocharis said in UK media interviews.
Tourism sustains a fifth of Greece’s workforce and economy, hit by a 76 percent drop in international arrivals last year and €14 billion ($17 billion) in lost sector revenue.
Greece’s position, and similar Spanish assurances, contrast with the message from France, the second-ranked destination for Britons — which is in no hurry to welcome them back.
“Don’t come,” the mayor of Nice, Christian Estrosi, advised potential overseas visitors last month as the Mediterranean city grappled with a faster-spreading COVID-19 variant first identified in Britain. “It’s not the time.”
As a result, airlines and tour operators are pushing “sun-and-sea” bookings to Spain, Greece and Portugal in a bid to bring in much-needed cash.
“The trend now is toward what’s likely to be open,” said Toby Kelly, CEO of UK travel agency Trailfinders, pointing to a “massive pickup in demand” to Greek destinations.
“Greece has been the big story, with its government totally behind vaccine certificates.”
Without waiting for Brussels, Cyprus joined the rush on Thursday, announcing that vaccinated UK tourists could enter from May 1 without testing or quarantine.
Andy Davies, a 43-year-old British company director who booked a Mallorca villa for July after getting vaccinated, said he was reassured by Britain’s reopening plans and “noises coming out of Europe about the vaccine passport.”


US hiring surges back in February, adding 379,000 jobs

US hiring surges back in February, adding 379,000 jobs
Updated 06 March 2021

US hiring surges back in February, adding 379,000 jobs

US hiring surges back in February, adding 379,000 jobs

WASHINGTON: The US economy added a 379,000 jobs in February and the unemployment rate dipped slightly to 6.2 percent, the Labor Department said on Friday, a better-than-expected result as the country recovers from COVID-19.
The biggest hiring gains were seen in the leisure and hospitality sector, which had been badly damaged by business restrictions during the pandemic, but added 355,000 jobs last month, even as the government warned the pandemic continues to hit the labor market.
“Leisure and hospitality lost half-a-million jobs during the peak of the winter COVID-19 spike in December, and about broke even in January,” said Robert Frick of Navy Federal Credit Union, who called its gains last month “a good sign the beginning of a strong economic recovery may be getting underway.”

FASTFACT

9.5 million

The economy still had 9.5 million fewer positions than February 2020.

However, hiring was tepid outside of that sector, and the report said the economy still had 9.5 million fewer positions than February 2020, before the coronavirus pandemic caused business restrictions that prompted mass layoffs.
The world’s largest economy saw unemployment spike to 14.7 percent in April 2020 after the restrictions were imposed, but joblessness has declined in the months since, albeit at a slower and slower pace.
Outside the strong hiring among restaurants and other sectors saw much weaker gains, with temporary health services adding 53,000 jobs and health care and social assistance adding 46,000.
However, other industries saw job losses, including in education which shed nearly 70,000 positions, and construction which dropped 61,000.
The Labor Department also revised its employment data for the previous two months to show a steeper decline in December payrolls and larger increase in January, for a net gain of 38,000 positions over the two months.