Driving the Day
1. No revenge travelling
This morning, the National Health Commission (NHC) dropped the latest numbers for domestic COVID-19 cases.
On April 29 (NHC):
- There were only four new confirmed cases, the second lowest number recorded in April.
Even better: There were no new local cases.
- There were, however, 33 new asymptomatic infections, of which two were imported – up a bit from 26 asymptomatic cases with five imported on April 28.
Beijingers got some good news today (BJ News):
- The city lowered its public health emergency response rating from Level 1 to Level 2for the first time since January.
What it means: People coming to Beijing from low risk areas in China will no longer be subject to quarantine.
Folks in Beijing are understandably psyched and have celebrated by leaving the city in droves.
- According to online travel agency Qunar, purchases of outbound plane tickets from Beijing shot up by a factor of 15 within 30 mins after the announcement.
But China’s roads are still looking pretty lonesome and tumbleweedy (The Paper 2):
- The Ministry of Transport (MoT) estimated daily traffic in the next five days will be around 35% of last year.
Get smart: Actual traveller numbers will be a bit better than MoT’s estimates. That’s because more people are driving these days – something not captured in the MoT stats.
Get smarter: Even still, the overall picture is a gloomy one.
2.PBSC steps up support for Hubei
On Wednesday, Xi Jinping chaired a meeting of the Politburo Standing Committee (PBSC).
The focus: Supporting the Hubei economy.
Some context: Being the epicenter of the epidemic, Hubei’s GDP contracted 39.2% y/y in the first quarter.
Some more context:
- At roughly USD 650 billion, Hubei’s GDP in 2019 was seventh-largest among Chinese provinces.
- If Hubei were its own country, it would be the 21st-largest economy in the world.
Now it seems businesses in Hubei aren’t getting the financial support they need.
According to a March 20 survey on 176 companies in Wuhan conducted in consultation with the Wuhan branch of the Chinese People’s Political Consultative Conference (The Paper):
- 140 of them had not received any discounted loans from banks.
- 21 had their loan repayments deferred.
- Eight received re-financing.
- Four received interest rate cuts.
- Two had their loan amounts increased.
- One received a government special project loan.
That’s not good.
To rectify the situation, the PBSC endorsed a package of policies to step up fiscal, tax, financial, credit, investment, and foreign trade support.
Specifically, the meeting emphasized efforts to:
- Support people in need
- Accelerate work and business resumption, especially for the auto manufacturing, information technology, new materials, and bio-medicine industries
- Construct both old and new infrastructure
- Expand production and sales channels for farm produce
Get smart: Putting almost the entire province on lockdown to contain the virus had a devastating impact on Hubei’s economy. Beijing knows it’s time to pay people back for their sacrifice.
Gov.cn: 习近平主持中央政治局常委会会议 分析国内外新冠肺炎疫情防控形势 研究部署完善常态化疫情防控举措 研究确定支持湖北省经济社会发展一揽子政策
Xinhua:Xi Focus: Xi chairs leadership meeting on regular epidemic control, supporting Hubei development
3.PMIs take a dip
On Thursday, both the National Bureau of Statistics (NBS) and Caixin dropped their Purchasing Managers’ Index (PMI) for April.
Welcome to contraction country, buckaroos.
- The NBSPMI came in at 50.8, down from 52.0 in March.
- The Caixin PMI registered 49.4, down from 50.1 March.
As a reminder: Anything above 50 represents an expected improvement. A reading below 50means thatfirms feel less optimistic inApril thanthey did in March.
This month’s readings straddle the good/bad threshold.
Harken back: Last month, we told you that March’s huge PMI rebound was largely attributable to the abysmally low baseline set in February (see March 31 Tip Sheet).
More context: The two PMIs survey different companies.
- The Caixin PMI tilts toward small, private manufacturers.
- The NBS sample size is far larger.
Get smart: Any way you slice it, things are tough for manufacturers right now.
Get smarter: Slumping foreign demand is taking a major toll on Chinese manufacturers. There’s not much policymakers can do about that.
Caixin: 4月财新中国制造业PMI降至49.4 再回收缩区间
Reuters: China’s April factory activity unexpectedly dips as export orders collapse – Caixin PMI
4.Premier Li makes nice with EU leader
On Wednesday, Premier Li Keqiang spoke with European Commission President Ursula von der Leyen.
Some context: The call comes amid the backdrop of a tense week for Sino-EU relations. The two have been squabbling behind the scenes about whether or not China is waging a “global disinformation campaign” on the coronavirus epidemic (NYT).
According to the official readout, Wednesday’s call focused on cooperation (Gov.cn 2):
- “As the novel coronavirus epidemic is spreading around the world, China and the EU should support and help each other, the Premier said.”
- “Under the current circumstances, China would like to join hands with the European side to enhance exchanges and cooperation on epidemic control and economic recovery.”
Von der Leyen said that’s cool:
- “Fighting against the global epidemic needs cooperation and coordination among different countries in the world, she said, adding that the European side is willing to strengthen cooperation with China on combating the epidemic, recovering the economy and developing vaccines and medicines.”
Get smart: China’s diplomacy has been pretty schizophrenic of late, vacillating between calls for human solidarity and petulant attacks on those who criticize China. The former had the chance to raise China’s standing in the world; but the latter has erased any reputational gains China may have made.
5.Legislature concludes bi-monthly meeting
Yesterday, the National People’s Congress Standing Committee (NPCSC) – China’s legislature – finished up its bi-monthly gathering.
The legislature passed one law:
- A revision to theLaw on the Prevention and Control of Environmental Pollution by Solid Waste
They also discussed the agend for the upcoming Two Sessions, which will begin in three weeks(see yesterday’s Tip Sheet).
At this year’s Two Sessions, lawmakers will consider:
- The long-awaited draft Civil Code
- The government work report and other staple documents
Some context: The Civil Code will replace nine existing laws covering six areas, including contracts, property rights, personality rights, marriage and family, inheritance, and tort liability.
But this stole the spotlight – a slew of public health-related legislation is in the pipeline:
- “Lawmakers…heard a report on strengthening public health legislation, including a specific legislative plan that involves 17 health-related laws to be formulated or revised in 2020 and 2021.”
According Shen Chunyao, director of the NPCSC’s Legislative Affairs Commission, the new legislative plan will:
- Fill up the “gaps” and “weaknesses” of China’s current public health legal system exposed by the COVID-19 epidemic.
Get smart: There’s still no word on how long the Two Sessions will run or this year – or what the format will be.
Xinhua: China to open “two sessions” in May, step up public health legislation