Connect with us

Economy

The coronavirus could be much worse for China's economy than SARS – CNN

Published

 on


The virus outbreak escalated just before the new year, one of China’s most significant economic events. Chinese consumers spent more than 1 trillion yuan ($145 billion) last year on holiday shopping, dining, entertainment and travel, according to state news agency Xinhua.
Extensive travel restrictions and fears about the virus mean people aren’t spending as much this week. But the extended holiday — to February 2 nationwide and for another week beyond that in Shanghai and several provinces — will impact millions of people in other ways as government offices and schools remain closed.
How the coronavirus is already hurting global business
Major companies such as Tencent (TCEHY), Huawei and Alibaba (BABA), will feel the effects, too, as head offices remain shut. Tencent (TENC) has told its roughly 54,000 employees that it will be extending holidays until February 9.
Exactly how big the economic hit will be is hard to predict. China hasn’t come to a complete standstill — the Shanghai Stock Exchange is reopening on February 3. Grocery stores and food delivery services are still up and running, even in areas under lockdown.
ING economist Iris Pang said Wednesday that the outbreak would knock a modest 0.3 percentage points off China’s first quarter growth.
But Tommy Wu, analyst at Oxford Economics, said the impact could be worse than the SARS outbreak in 2003, given the coronavirus is spreading rapidly and coincides with the holiday travel rush. Economists at Nomura warned that the outbreak could knock more than two percentage points off growth in the first quarter — larger than the quarterly drop registered during SARS.
Patrick Perret-Green, an economist with research firm AdMacro, said the hit to China’s annual growth rate could be even more severe.
“There will be no quick recovery. China was growing strongly [during SARS], as was the rest of the world,” he said. “Now China and the global economy is like a patient on dialysis, and somebody just pulled an IV out.”

A big hit to growth

Before the outbreak escalated this month, the International Monetary Fund and the World Bank had forecast China’s annual economic growth to fall to about 6%, down from 6.1% in 2019.
Perret-Green said the outbreak and measures to contain it could push China’s 2020 GDP growth rate near levels last seen in 1990, when it was 3.9%, according to World Bank data.
The Wuhan virus is the last thing China's economy needs right nowThe Wuhan virus is the last thing China's economy needs right now
“Officially it may be closer to 4.5% and possibly the reality could be close to zero,” said Perret-Green, who suggested the government severely overstates its GDP figures to begin with.
Margaret Yang, an analyst at brokerage firm CMC Markets, said the “adverse economic impact is enormous.”
All sectors will likely feel the effects of the delay in getting back to work, she said in a research note Tuesday, singling out transportation, tourism, entertainment, retail and commercial property.
The Wuhan coronavirus has already killed 132 people, and infected over 6,000 others in China, but is not yet as lethal as the 2003 SARS outbreak. SARS had a roughly 10% fatality rate, compared to the estimated 3% for the coronavirus right now.
But the economic costs aren’t only about how deadly the virus is, according to Andrew Batson and Ernan Cui, analysts at research firm Gavekal Dragonomics.
“These costs are instead going to be determined by the measures China’s government takes to contain its spread — measures which have rapidly escalated to an unprecedented severity,” they wrote in a research note on Tuesday.
Travel and tourism will have an outsized effect, Batson and Cui said. They noted that the sector raked in 514 billion yuan ($74 billion) during the seven-day holiday in 2019, equivalent to 2% of first quarter GDP.

Travel industry suffering

There has already been a plunge in the number of trips made during the holiday. Liu Xiaoming, China’s vice minister for transport, told reporters on Sunday that the overall number of trips made across the country on the first day of the Lunar New Year fell nearly 30% from a year ago. Travel by plane and train fell more than 41%, he added.
Major travel companies, hotels and airlines are waiving cancellation fees and offering refunds through most of February. Some airlines are suspending services.
British Airways suspends all flights to China as coronavirus spreadsBritish Airways suspends all flights to China as coronavirus spreads
Meanwhile, major tourist spots including museums, Beijing’s Forbidden City and even Disney’s (DIS) parks in Shanghai and Hong Kong have shuttered their doors. Beijing and other cities across China also canceled Lunar New Year celebrations, trying to limit crowds.
“This will mean a permanent loss of revenue from tourist activities, as the canceled excursions are not going to be repeated after the holiday is over,” wrote Batson and Cui.
Even after the extended vacation ends, China won’t be returning to business as usual. Many people will likely remain cautious, staying indoors and avoiding crowded areas.
— CNN’s Vanessa Yung, Serenitie Wang and Yong Xiong contributed to this report.

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Securing good jobs, clean air, and a strong economy – Prime Minister of Canada

Published

 on


Autoworkers have been a keystone of the Canadian economy for generations. By investing in the future of the auto industry, we are not only securing good middle-class jobs, we are fighting climate change, and building an economy that works for generations to come. 

Since January alone, Canada has secured several historic manufacturing deals for electric vehicles (EVs), hybrids, and batteries – deals that will create and secure thousands of good, middle-class jobs and provide the world with clean vehicles. Today, we are seeing the results of one of those deals start to roll off the line.

The Prime Minister, Justin Trudeau, was joined today by Premier of Ontario, Doug Ford, to open Canada’s first full-scale EV manufacturing plant, General Motors of Canada Company’s (GM) CAMI assembly plant in Ingersoll, Ontario. Starting today and going forward, the plant will build fully electric delivery vans – the BrightDrop Zevo 600 – which will help cut pollution and keep our communities healthy for our children and grandchildren.

Genius Dog 336 x 280 - Animated

Thanks in part to a $259 million investment from the Government of Canada, GM’s CAMI assembly plant was able to retool its operations to build these electric vans. By 2025, the plant plans to manufacture 50,000 EVs per year. This investment has helped secure thousands of well-paying, high-quality jobs across GM facilities, and is helping advance the electrification of Canada’s automotive sector.

The Government of Canada will continue to work to attract investment from companies around the world as we build our EV supply chain – from mining critical minerals to manufacturing batteries, and vehicles. By taking action today, we are positioning Canada as a global leader in EVs, fighting climate change, securing good jobs, and building an economy that works for all Canadians – now and into the future.

Quotes

“When we invested in GM’s project to build Canada’s first full-scale electric vehicle manufacturing plant in Ingersoll, we knew it would deliver results. Today, as the first BrightDrop van rolls off the line, that’s exactly what we’re seeing. This plant has secured good jobs for workers, it is positioning Canada as a leader on EVs, and will help cut pollution. Good jobs, clean air, and a strong economy – together, that’s the future we can build.”

The Rt. Hon. Justin Trudeau, Prime Minister of Canada

“Today is proof that our historic investments in EV manufacturing are paying off. With the first BrightDrop vans coming off the assembly line, we’re seeing the skill of Canadian workers making a huge difference as the world moves to EVs. Our government, in partnership with GM, is cementing Canada’s leadership in the EV supply chain.”

The Hon. François-Philippe Champagne, Minister of Innovation, Science and Industry

“This milestone represents GM at our best – fast, flexible and first in the industry. The BrightDrop Zevo is a prime example of GM’s flexible Ultium EV architecture, which is allowing us to quickly launch a full range of electric vehicles for our customers. And, as of today, I am proud to call the CAMI EV Assembly team the first full-scale all-electric manufacturing team in Canada.”

Mark Reuss, President, General Motors

“This is a very exciting moment – a revolution in the way we transport people and goods. Today marks a huge day for BrightDrop, as we expand our footprint and begin producing the Zevo electric vans at scale, and a huge milestone for Canada on the road to a brighter future. Opening the CAMI plant is a major step in providing EVs at scale and delivering real results to the world’s biggest brands, like DHL Express, who will be our first Canadian customer.”

Travis Katz, President and CEO, BrightDrop

Quick Facts

  • The Government of Canada’s $259 million investment supports GM’s more than $2 billion project to reignite production at its Oshawa assembly plant, after operations stopped in 2019, and transform its CAMI assembly plant in Ingersoll.
  • The investment is being made through both the Strategic Innovation Fund and its Net Zero Accelerator Initiative.
  • The Government of Ontario made a matching contribution of up to $259 million toward the project.
  • Founded in 1918, General Motors of Canada Company (GM) is one of the largest automotive manufacturers worldwide. It is headquartered in Oshawa, Ontario, and is one of Canada’s largest automotive manufacturers.
  • GM is planning to introduce 30 new electric vehicles by 2025, eliminate tailpipe emissions from new light-duty vehicles by 2035, and become carbon neutral in its global products and operations by 2040.
  • The automotive sector contributes $16 billion to Canada’s gross domestic product and is one of the country’s largest export industries.
  • The automotive sector supports the employment of nearly 500,000 Canadians.
  • The 2030 Emissions Reductions Plan, released in March, puts Canada on track to achieving our goal of cutting emissions by 40 to 45 per cent below 2005 levels by 2030 while continuing to build a strong economy.
  • To make zero-emission vehicles more affordable and accessible, the Government of Canada offers incentives of up to $5,000 off the purchase or lease of a light-duty zero-emission vehicle through the Incentives for Zero-Emission Vehicles (iZEV) Program. Since May 2019, close to 176,000 Canadians have taken advantage of this program.
  • Since 2015, the Government of Canada has invested $400 million in building approximately 35,000 zero-emission vehicle charging stations across the country.

Associated Links

Adblock test (Why?)



Source link

Continue Reading

Economy

UK's Economy To Dip Into Recession This Winter – OilPrice.com

Published

 on



UK’s Economy To Dip Into Recession This Winter | OilPrice.com

Genius Dog 336 x 280 - Animated


City A.M

City A.M

CityAM.com is the online presence of City A.M., London’s first free daily business newspaper. Both platforms cover financial and business news as well as sport and…

More Info

Related News

Recession

The UK’s recession will officially begin this winter and is likely to last for most of next year, a closely watched survey out today suggests.

S&P Global and the Chartered Institute of Procurement and Supply’s (CIPS) final purchasing managers’ index (PMI) measuring private sector activity in November was unchanged at 48.2, the lowest number since January 2021 when the UK was in the constrained by tough pandemic lockdowns.

The reading was below analysts’ expectations but held steady from an earlier estimate. The services PMI was unchanged at 48.8. Services firms generate about two thirds of UK GDP.

The figure prompted experts to predict the forewarned recession will start during the final weeks of this year. 

A recession is typically defined as two consecutive quarters of contraction. The UK economy shrank 0.2 percent over the summer.

PMI has slid this year

Source: S&P Global

Britain’s PMI has now been below the 50 point threshold that separates growth and contraction for four months now, indicating consumers and businesses started cutting spending during the summer when the cost of living crisis gathered pace.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said Britain is now in the teeth of the worst economic slowdown outside the Covid-19 pandemic since the financial crisis in 2008.

The economy is being spiked by the worst inflation crunch in 41 years, with prices rising 11.1 percent over the year to October.

Pay is failing to keep pace with inflation, putting households on track for the biggest living standards shock on record. The Office for Budget Responsibility reckons real incomes will fall 7.1 percent over the next two years.

That living standards squeeze is expected to drive a spending slowdown, keeping the UK in recession for at least a year. However, experts think the amount of GDP lost during the slump will be small compared to past recessions.

Businesses are being squeezed by soaring energy costs, forcing them to scale back unprofitable activity.

Gabriella Dickens, senior UK economist at consultancy Pantheon Macroeconomics, thinks businesses will have to shed workers to offset weaker spending.

“Firms will move decisively to reduce employment next year, as they are forced to consolidate costs in the face of higher financing costs and weaker demand,” she said.

The pound slumped 0.34 percent against the US dollar on the news. The FTSE 100 climbed 0.24 percent.

By CityAM

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage



Related posts

Adblock test (Why?)



Source link

Continue Reading

Economy

B.C.’s economy forecast to remain steady, despite slower near-term economic growth | BC Gov News – BC Gov News

Published

 on

Like other jurisdictions, B.C. is expected to see slower economic growth through 2023 because of global inflation and higher interest rates, before steady growth resumes in the medium term, according to projections from private-sector forecasters.

Each year, B.C.’s finance minister meets with the Economic Forecast Council (EFC), a 13-member council of private-sector forecasters from throughout Canada, in preparation for the next year’s budget. This is the second year that an additional set of discussions was added, providing an opportunity to consult with an Environmental, Social and Governance (ESG) Advisory Council to explore how the provincial government can continue to build a more inclusive, sustainable economy and support well-being in British Columbia.

The EFC anticipates the province’s economy will grow by 2.9% in 2022 and 0.4% in 2023; slower than their January 2022 forecasts of 4.2% and 2.7%, respectively. The updated figures are similar to what was presented in the Province’s Second Quarterly Report. Real gross domestic product (GDP) growth is then expected to pick up, with an increase of 1.6% in 2024, followed by gains of 2.3%, 2.3% and 2.1% in 2025, 2026 and 2027, respectively. The reduction in the near-term outlook is consistent with other jurisdictions and reflects persistent global inflation and interest rates rising higher and more rapidly than expected throughout Canada.

Genius Dog 336 x 280 - Animated

“We’re entering this period of slower growth and challenging global economic times in a strong position to continue supporting people, because B.C.’s economy grew more than most last year,” said Selina Robinson, Minister of Finance. “We’ll use the resources we have to address the issues that matter most to people, including housing, health care and building a sustainable economy that works for everyone – but no matter what is on the horizon and no matter what the numbers show, this government will continue to be here to support people.”

Discussions with the EFC and the ESG Advisory Council focused on current events, issues affecting B.C.’s economy and the environmental, social and governance opportunities and challenges facing the province. Topics at the meetings included:

  • global inflation and monetary policy impacts;
  • government policies to stimulate investment and ensure shared prosperity;
  • socioeconomic factors in B.C., such as inequality, Indigenous partnerships, and well-being;
  • environment, climate change and the transition to a lower carbon economy;
  • housing affordability and supply;
  • labour market dynamics and immigration; and
  • opportunities for businesses to build on B.C.’s strong ESG profile.

“We are committed to building an inclusive economy, where environmental and social sustainability is the basis for future growth,” said Robinson. “A strong social, cultural and economic foundation is key to successful and resilient communities. We know this, and we know generations will benefit from the decisions we make right now.”

Forecasts and feedback from the two councils will be used to inform the next provincial budget, which will be released on Feb. 28, 2023. EFC members will also have an opportunity to submit revised forecasts in early January.

Quick Facts:

  • In the Province’s Second Quarterly Report, B.C. projected a revised operating surplus of $5.7 billion in the 2022-23 fiscal year.
  • Since the summer, B.C. has rolled out approximately $2 billion in affordability measures.
  • Environmental, Social and Governance are three main categories often discussed when evaluating sustainability performance, risk-mitigation planning and societal well-being.

Learn More:

To read B.C.’s Second Quarterly Report, visit: https://www2.gov.bc.ca/gov/content/governments/finances/reports/quarterly-reports

For information about new and existing support measures for B.C. residents, visit: https://strongerbc.gov.bc.ca/cost-of-living/

For more about the StrongerBC Economic Plan, visit: https://strongerbc.gov.bc.ca/plan/

To learn about the ways B.C. is committed to environmental, social and governance principles, read the ESG summary report here: https://www2.gov.bc.ca/assets/gov/british-columbians-our-governments/government-finances/debt-management/bc-esg-report.pdf

Source link

Continue Reading

Trending