Driving the Day
1.Coronavirus update: cautious optimism
On Wednesday, there were more signals that coronavirus isbeing brought under control.
- The total number of outstanding coronavirus cases is decreasing as more people are treated, cured, and discharged.
- A total of 15 provinces and municipalities have lowered their emergency response level.
There were also comforting words from China’s patron saint of respiratory disease prevention and control, Zhong Nanshan (Xinhua):
- “With the strong measures taken by the central government and the joint efforts made by medics across the country, we’re confident that the epidemic will be basically under control by the end of April.”
The Chinese government seems similarly confident that coronavirus will be well in hand by spring (NDRC).
- The National Development and Reform Commission announced that the annual China Brand Day expo would go ahead as planned in Shanghai from May 10-12.
Get smart: China’s not out of the woods yet, but things are certainly looking up.
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Xinhua: 国家卫健委：2月26日新增确诊病例433例 累计治愈出院病例32495例
Xinhua:Confident novel coronavirus outbreak under control by late April: health expert
NDRC:国家发展改革委关于做好参加2020年中国品牌日活动的通知
Finance Economics
2.PBoC tightens oversight of re-lending program
Yesterday, we told you that the central bank (PBoC) has decided to up its re-lending program from RMB 300 billion to RMB 800 billion (see yesterday’s Tip Sheet).
Some context: The program sees the PBoC offer cheap loans to banks, which then re-lend those funds to specially designated businesses – at preferential rates (see Feb 10 Tip Sheet).
The loans are supposed to only go to companies in “key industries” related to epidemic prevention and control, as well as companies producing daily necessities such as grain and cooking oil.
But there’s a problem: Quite a few companies have been gaming the system.
- Several coal companies and local government financing vehiclesmanaged to get onthe list of firms eligible for the program.
Now regulators are tightening oversight (Caixin):
- “On February 25, Caixin reporters learned from various banks and regulators that…48 companies that had been listed as key epidemic prevention enterprises were no longer on the special refinancing list.”
- “This means that banks will not be allowed to put in special refinancing loans for [them].”
- “If banks have already extended loans to these companies, these loans will not receive the preferential [rates].”
Get smart: Regulators want to be targeted in support measures. But that’s easier said than done.
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Caixin: 独家|不是谁都能拿专项再贷款！煤炭、城投等48家企业出局
The Paper:央行：重点支持复工复产、春耕备耕、外贸行业等资金需求
Politics Policy
3.PBSC donates to virus relief
On Wednesday, President Xi Jinping chaired a meeting of the Politburo Standing Committee (PBSC)
Some context: This is the fourth PBSC meeting discussing measures to contain COVID-19 since the start of the epidemic.
Xi said the situation may have turned a corner (Xinhua):
- “The positive trend in preventing and controlling the epidemic is expanding.”
- “Economic and social development is rapidly recovering.”
But it’s still too early to declare victory:
- “The situation in Hubei Province and its capital city of Wuhan remains complex and grim.”
- “The risk of a rebound of the epidemic in other regions cannot be overlooked.”
The Party wants its 80 million members to donate to the cause of epidemic relief.
- To set a good example for their comrades, all seven PBSC members made donations.
To help businesses get back to work, Xi wants the government to:
- Smooth out the kinks in transportation and logistics
- Secure sufficient protective supplies for companies
- Abolish unreasonable local administrative approvals
Get smart: Nothing really new here policy-wise. Xi and co. are now drilling down to the hard work of implementation.
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Gov.cn: 习近平主持中央政治局常委会会议 分析新冠肺炎疫情形势研究近期防控重点工作
Xinhua:Xi Focus: Xi chairs leadership meeting on COVID-19 control, makes donation
Politics Policy
4.The cough suppressants
On Wednesday, reporters at Caijing and Caixin publishedstoriesdetailing how the National Health Commission (NHC) and Hubei Provincial Health Commission (HBPHC) hid key information in early days of the coronavirus outbreak.
According to Caixin, officials from both agencies tried to suppress discussion of the outbreak(Caixin):
- “On January 1, …. an official of the HBPHC, informed [personnel at a gene sequencing company which tested early case samples] that…they should destroy existing case samples and were not allowed to disclose sample information.”
- On January 3, the NHC issued a document which forbadeinstitutions and individuals from publicizing any info related to case testing.
According to an anonymous expert which the NHC sent to Hubei on January 8, local officials hid evidence of infection among medical staff(Caijing via Guancha):
- “’Everywhere [we] went, we asked if there were any medical staff infections.”
- “But all the answers were ‘No.’”
Why that matters: Staff infections would have shown that there was human-to-human transmission.
Some context: Human-to-human transmission wasn’t publicly confirmed until January 20.
Get smart: There are still many unknowns about how much crucial info was buried prior to January 20.
Enjoy it while it lasts: This great investigative reporting by independent Chinese media is only really allowed in extreme times like these.
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Guancha: 追问卫健委第二批专家：为何没发现“人传人”？
Caixin:新冠病毒基因测序溯源：警报是何时拉响的
Politics Policy
5.Grounded at home
In response to the coronavirus, China has grouped all its counties and districts into three different risk levels. Those deemed low risk should (theoretically) be getting back to normal soon.
But things on ground aren’t quite so simple.
China Economic Weekly recently took a look at work resumption in Jiangxi province, where 96% of counties are considered low risk.
The provincial government also lifted many restrictive measures early.
- It removedall checkpoints byFebruary 13.
- It cancelledthe 14-day quarantine requirement for employees from non-epidemic areas.
And yet, the economy is still struggling.
- Only 44% of big businesses in Jiangxi were operating at more than half-capacity as of February 22.
The big problem: Lack of staff.
According to a local auto supplier, his employees can’t leave their village (CEW via Sina):
- “As of February 24, the village won’t release eight of my employees.”
- “The village could get a reward of RMB 20,000 if they don’t release any residents until February 26.”
Get smart: Discordant local regulations are just one of the many obstacles companies face in getting back to work.
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Sina: 江西企业主叹员工到岗难：省里天天发文 村里就是不放人