Economy

Omicron dashes China’s hopes of Olympics boosting its economy – Aljazeera.com

Published

3 years ago

January 31, 2022

China’s Winter Olympics may be more of a drag on Beijing’s regional economy than a boost, as virus flare-ups and pollution curbs weigh on consumer and industrial activity.

A ban on public spectators means there won’t be the usual bump up in tourism and consumption that a city hopes to gain from hosting the international games. Tighter controls to contain the outbreaks of two virus variants are keeping holidaymakers away. And restrictions on polluting industries to ensure there are clear skies over the capital during the games means steel plants are curbing output.

“The Winter Olympics will affect industrial production and infrastructure construction in the first quarter,” said Lu Ting, chief China economist at Nomura Holdings Inc. “It won’t boost consumption either because of virus outbreaks.”

Beijing is battling a growing cluster of coronavirus infections, which rose to 96 cases since mid-January. It’s the last thing authorities want in the face of a world event, especially with its resolution to maintain a Covid Zero strategy.

The outbreak prompted authorities to decide not to sell Olympics tickets to the general public but only allow certain invited spectators to watch the game. Athletes and staff, on the other hand, will be moving within a vast bubble of transportation, accommodation and venues.

The games, which are jointly held in Beijing and the adjacent city of Zhangjiakou in Hebei province, will run from Feb. 4 to 20. The Winter Paralympics will follow from March 3 to 13.

To contain the recent flare-up, the city has put in place more stringent virus control measures, such as requiring residents who buy anti-fever medicine to get Covid tests and increasing the testing of inbound travelers.

Eric Zhu, a China economist at Bloomberg Economics, said Beijing is likely to keep restrictions largely in place through the first quarter, given the Winter Paralympics and the annual national legislative sessions scheduled in March. That will continue to dent the already-struggling tourism and service sectors, he wrote in a report.

In addition, cities around Beijing have curbed the output of industries like steel, in order to improve air quality in the capital. That’s after the Ministry of Ecology and Environment expanded the annual winter campaign to improve air quality to over 60 cities this year from the 28 cities previously.

‘Mild disruptions to industrial production’

Each of these cities, spanning from the eastern province of Shandong to the central province of Shanxi, have targets to meet in terms of the level of PM2.5 particles in the air and the number of clear air days.

“I expect some mild disruptions to industrial production from factory closures ahead of Winter Olympics, but the overall impact to growth may be temporary and limited,” said Liu Peiqian, China economist at NatWest Group Plc.

The positive effects of the games may only be evident over the longer term. It could help China achieve its ambitious target of making sports into a 5 trillion yuan ($786 billion) industry by 2025, a 70% increase from 2019 levels. Authorities say they’ve already more than met their target of involving 300 million Chinese in skiing, hockey and other cold-weather pastimes.

“Similar to Tokyo’s Summer Games, the timing of global sport events are less than ideal due to the pandemic,” said Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group Ltd. “However, such an event is seen to spark a ‘white economy’ meaning that more people will be interested in winter sports domestically. That’s the long term benefit to the economy.”

China had estimated in 2014 the Winter Olympics and the Paralympics would cost $1.56 billion in operational spending, according to a report from the International Olympic Committee. The city budgeted for capital investment of $1.51 billion, with 65% funded by the private sector and 35% by various levels of government.

The investment was expected to bring long-term benefits to the region. Ticketing revenue was estimated at the time to reach $118 million, which is unlikely to be recovered now.

The economic drag of the games will likely be temporary and probably won’t result in any significant impact on China’s first-half growth, Nomura’s Lu said.

“Unfortunately it won’t drive consumption demand this time because of the pandemic,” he said. “Overall, there is some short-term impact, but don’t exaggerate the impact on the first half and full year.”

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Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

Published

14 hours ago

October 21, 2024

Anne Joseph

OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

5 days ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

5 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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