1. Zero new domestic coronavirus cases in China for first time since epidemic began
Mainland China has reported zero new domestic infections of coronavirus for the first time since the outbreak began, reported the South China Morning Post.
The National Health Commission said it was also the first time Hubei province – where the disease first emerged – recorded no new cases either domestically or from abroad. Nationwide, there were 34 new infections, all of them from overseas. The number of new deaths was down to single digits, with eight reported, bringing the total death toll to 3,245. The commission said 23 new suspected cases had been reported, with the total number of infections now standing at 80,928. A total of 70,420 patients have recovered.
2. Chinese economy may see first quarterly contraction since 1992
China’s economy could soon see its first quarterly decline since 1992 due to the ongoing coronavirus pandemic, reported Caixin.
Several financial institutions have lowered their forecasts of China’s GDP performance after the National Bureau of Statistics (NBS) released data showing major economic indicators, including infrastructure investment, factory output and retail sales, plunged by double-digit percentages in the first two months of this year.
Goldman Sachs (Asia) revised down its projection for China’s first quarter GDP to a year-on-year contraction of 9% from a previous estimate of 2.5% growth, according to a Tuesday research note. Standard Chartered Bank wrote in a Monday note that it had lowered its estimate to a 4.2% year-on-year decline from 2.8% growth.
Wang Tao, an economist of UBS Group AG, wrote in a Caixin column on Wednesday that she had lowered her first-quarter GDP forecast to a 5% decline and full-year estimate to 1.5% growth. Morgan Stanley forecasted China’s economy will contract 5% year-on-year in the first quarter before rebounding into expansionary territory in the second quarter in a Tuesday report.
3. Coronavirus proves a bonanza for Asia edtech start-ups
The coronavirus outbreak has been a bonanza for Asian online education companies as hundreds of millions of students have been prevented from attending school, reported the Financial Times.
Demand has been so intense that one Chinese provider, Yuanfudao, suffered a two-hour system crash last month after 5 million people took up its offer of free live courses, the company said.
Shares in GSX, a Nasdaq-listed Chinese online education provider, have jumped 92% since the start of the year. Last month, the company reported a 15 million increase in student enrolments for free online courses. This compared with 2.7 million in paid enrolments at the end of 2019, itself a three-fold increase on the year earlier, said Sandy Qin, GSX head of investor relations.
“Online education is an irresistible trend,” said Claudia Wang, a partner at Oliver Wyman, the consultancy. “There is a lot of online tutoring, and we expect the paid user base to double or triple in 2020 . . . and customer acquisition costs should fall drastically in the short term.”
4. China’s electricity consumption drops by most in five years
China’s energy consumption dropped by the biggest margin in five years in the first two months of 2020, as both the supply and demand sides of the industry were hit by the government’s strict measures to contain the coronavirus epidemic, reported Caixin.
Fresh data from the National Development and Reform Commission, the country’s top economic planner, showed Tuesday that the nation consumed 7.8% less electricity in January and February compared with the same period last year, led by a 12% fall in industrial consumption and a 3.1% drop in the services industry.
Consumption dropped most precipitously in China’s developed coastal regions. The eastern province of Zhejiang, home to the port city of Ningbo and the major commercial hub of Wenzhou, posted a 21.3% year-on-year plunge in the first two months of the year. Neighboring Jiangsu province consumed 16.84% less power and Shanghai, which is nestled between the two provinces, used 12.89% less, according to data from provincial governments.
Even these steep drops may not fully reflect the massive scale of the economic shutdown in the period as some companies and factories, under pressure from officials to meet work resumption targets, left manufacturing equipment, lights and air conditioners running to inflate power consumption figures.
5. China’s passenger car sales tumble 47% in first half of March due to virus outbreak
Retail sales of China’s passenger car crumbled 47% on an annual basis in the first 15 days of March, according to the China Passenger Car Association (CPCA), as the coronavirus outbreak slammed the brakes on businesses across the country, reported Reuters.
“Some cities are encouraging people to return to normal life, however, consumers’ confidence in car purchases is unlikely to return to normal before the end of March,” the industry body said.
6. Chinese economy suffers record blow from coronavirus
China’s industrial output contracted at the fastest pace on record in the first two months of this year and urban unemployment hit its highest rate ever in February. The official data — some of the worst official figures ever reported by China — suggest President Xi Jinping’s attempts to expedite an economic recovery in late February have not had the desired effect, reported the Financial Times.
Industrial output tumbled 13.5% in the first two months of this year, the National Bureau of Statistics said on Monday. This would represent the largest contraction on record, according to Reuters data. The urban unemployment rate also surged to 6.2% in February, the NBS said.
The latest economic data also showed that China retail sales plummeted 20.5% year on year in January and February and fixed asset investment fell 24.5%, down from 5.4% growth when the data were last reported.
“The actual shock could be much bigger than those deeply negative January-February numbers suggest, because the lockdowns started only from 23 January,” said Nomura’s chief China economist Ting Lu.
7. Restaurants in China are reopening, but finding it hard to recover business
Restaurants in China are gradually reopening as new Covid-19 infections wane, but they are finding it difficult to reach even half of their pre-outbreak revenues, reported Caixin.
Xibei Youmiancun, a northwestern Chinese cuisine catering brand run by Xibei Group, had resumed regular operations at 167 of its 376 branches as of Tuesday, with another 160 only accepting takeout or delivery orders. Xibei Group chairman Jia Guolong complained to local media in early February that daily revenue had fallen to around RMB 2 million ($286,000) with some 100 stores fulfilling delivery orders, “a drop in the bucket” compared to average daily revenue of RMB 20 million before the outbreak.
More and more restaurants have worked to resume business as usual, with most of China outside Hubei province returning to work in recent weeks, but multiple restaurant chains have told Caixin their cashflow remains well below half of what it was prior to the outbreak, even after adjusting strategies and shifting focus to deliveries and catering. The loss of dine-in business has far outweighed revenue from new experimental initiatives.
Higher-end restaurants may have taken the biggest hit. Dong Shaobo, a senior executive for famous Peking duck chain Dadong, said the company’s “income is close to zero, or 99% below normal.”
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