Worldwide: Headlines
Coronavirus: China’s industrial engine revved strongly in May, but consumption weak as slow recovery continues
China reported strong growth in its industrial engine for the month of May, as the economy continued to slowly recover from the effects of the coronavirus pandemic, data released on Monday showed.
In May, China’s industrial production, a gauge of manufacturing, mining and utilities sector activity, grew by 4.4 per cent from a year earlier, up from 3.9 per cent growth in April, but slightly below the median forecast of a Bloomberg poll of analysts, which called 5.0 per cent growth. Within that, manufacturing grew by 5.2 per cent, with mining up 1.1 per cent.
Retail sales, a key indicator of consumption in the world’s biggest consumer market, remained negative at minus 2.8 per cent growth from a year previous, but was improved on April’s 7.5 per cent slump, the National Bureau of Statistics data showed. Analysts had expected a 2.3 per cent contraction.
Fixed asset investment, the year-to-date value of spending on real estate, infrastructure and capital equipment, fell by 6.3 per cent from a year earlier in the first five months of 2020, worse than the median result of the Bloomberg poll of analysts, which predicted minus 6.0 per cent. It was also better than April’s reading of minus 10.3 per cent.
Investment in the manufacturing sector dropped 14.8 per cent in the first five months, with a 6.3 per cent drop in infrastructure investment. Property investment, however, appeared to be rebounding, with a contraction of just 0.3 per cent.
The surveyed jobless rate dropped to 5.9 per cent in May, from 6.0 per cent in April. However, while this is an indicator of the unemployment rate in a certain segment of the urban population, it is not viewed as an accurate depiction of the overall employment situation.
Full Coverage: South China Morning Post
Asian stocks, oil sell off on second wave fears
SYDNEY (Reuters) – Asian markets started the week on the backfoot on Monday while oil prices slipped as fears of a second wave of coronavirus infections in China sent investors scurrying for safe-havens.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.25% with Australian shares off 0.4% and South Korea slipping 0.6%. Japan’s Nikkei fell 0.75%.
The losses follow a strong rally in global equities since late March, fuelled by central bank and fiscal stimulus and optimism as countries gradually lifted restrictions put in place to curb the spread of the novel coronavirus.
However, risk sentiment took a knock after Beijing recorded dozens of new COVID-19 cases in recent days, all linked to a major wholesale food market.
Investors are also fretting over a spike in cases in the United States.
Another large coronavirus outbreak could roil financial markets, which had been rallying recently on hopes for economic recovery.
Full Coverage: Reuters
Oil prices drop as rising U.S. coronavirus cases stoke fears of weak fuel demand
SEOUL (Reuters) – Oil prices fell on Monday, with U.S. oil dropping more than 2%, as a spike in new coronavirus cases in the United States raised concerns over a second wave of the virus which would weigh on the pace of fuel demand recovery.
Brent crude futures fell 66 cents, or 1.7%, at $38.07 a barrel as of 0016 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 81 cents, or 2.2%, to $35.45 a barrel.
Both benchmarks ended down about 8% last week, their first weekly declines since April, hit by the U.S. coronavirus concerns: More than 25,000 new cases were reported on Saturday alone as more states, including Florida and Texas, reported record new infection highs.
“Concerns about the recent uptick in COVID-19 infections in the U.S. and a potential ‘second wave’ are weighing on oil at the moment,” said Stephen Innes, chief global market strategist at AxiCorp.
Meanwhile, an OPEC-led monitoring panel will meet on Thursday to discuss ongoing record production cuts to see whether countries have delivered their share of the reductions, but will not make any decision, according to five OPEC+ sources.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, have been reducing supplies by 9.7 million barrels per day (bpd), about 10% of pre-pandemic demand, and agreed in early June to extend the cuts for a month until end-July.
Full Coverage: Reuters
EU won’t ally with US against China, foreign policy chief says before Pompeo meeting
The European Union’s foreign policy chief has ruled out a transatlantic alliance against China and dismissed “systematic rivalry” with Beijing, just hours before he is due to talk to his US counterpart.
EU High Representative for Foreign Affairs Josep Borrell called for a “big, positive agenda for EU-China cooperation” on Sunday, just a day before he and the 27 foreign ministers from the bloc are expected to have a videoconference with US Secretary of State Mike Pompeo.
The meeting is expected to focus on China and “disinformation”, and will be followed in a week’s time by the first EU-China summit under European Commission President Ursula von der Leyen and European Council President Charles Michel. The two EU chiefs will meet Chinese Premier Li Keqiang, with the discussions expected to focus on market access.
In a post on his official site on Sunday, Borrell said the EU would not pick a side in the US-China conflict, adding that the European style of diplomacy focused on multilateralism and cooperation.
“Amid US-China tensions as the main axis of global politics, the pressure to ‘choose sides’ is increasing,” he said. “We as Europeans have to do it ‘My Way’, with all the challenges this brings.”
He also offered the clearest sign yet that the EU was prepared to tone down its rhetoric of treating China as a “systemic rival”, a policy reached by the last EU Commission team whose term ended late last year.
Full Coverage: South China Morning Post
Boris Johnson desperately needs his lockdown gamble to pay off
London (CNN)The UK is taking a tentative step in its slow emergence from coronavirus lockdown. As of Monday, lockdown measures will be eased in England, allowing non-essential shops to reopen along with some public spaces like zoos and theme parks.
It’s impossible to overstate how important it is for Prime Minister Boris Johnson that this goes well after a painful few weeks.
His pandemic response has been attacked across the political spectrum, as has his handling of recent Black Lives Matter protests across the country, with critics accusing Johnson of using language that enflames racial division, leading ultimately to ugly scenes as far-right extremist groups took part in violent counter-protests at the weekend. So, from the government’s perspective, this easing of lockdown must not end in disaster.
The worst-case scenario is that unlocking leads to a second wave of coronavirus infections, resulting in more deaths and the country being locked down again. It will be very hard to sell this to a public which, despite largely obeying measures since March, has the highest death rate in Europe.
“I don’t think it’s too much to say that his survival as Prime Minister is in danger if we get a second spike,” says Tim Bale, professor of politics at Queen Mary University. “I’m not sure he could restore public confidence in his government if anything like a return to the lockdown had to be executed. The government really has to get this right and pray it’s not too early, as some people claim it may be.”
These claims that lockdown is being lifted too soon range from the editorial pages of the left-leaning Guardian newspaper, which believes Johnson is “seeing polls, not science” and “gambling with the health of the nation,” to scientists advising the government who have called it a “political decision.”
Full Coverage: CNN
China and US can still cooperate as competitors, Beijing’s former top trade negotiator says
Despite growing tensions, China and the United States must find a way to cooperate because their economies are too intertwined to decouple, according to a former top Chinese trade negotiator.
“At a time when the [coronavirus] pandemic is still threatening global cooperation, I think it’s even more important to uphold and carry forward a spirit of cooperation,” Long Yongtu, head of the Chinese team that negotiated the country’s 2001 entry into the World Trade Organisation, told a seminar in the eastern province of Jiangsu on Friday.
“Although the relationship between China and the US has been positioned as competitive, competitors don’t have to confront or clash with each other. Just like in a market economy, although many companies are competitors, competition doesn’t lead to exclusion or prevent finding a common interest.
“Since China and the US are already intertwined, [they] can find a place to cooperate.”
A transcript of Long’s comments were published Saturday by Chinese media and technology company iyiou, an organiser of the seminar.
“The US said it would like to continue to have an open and constructive relationship with China. So as long as China and the US are willing to seek common ground while reserving differences, they can form a cooperative relationship after the pandemic,” Long said, referring to US President Donald Trump’s sweep of announcements aimed at China over a range of issues including Beijing’s proposed national security law for Hong Kong.
Full Coverage: South China Morning Post
Trump Rally Is the ‘Perfect Storm Setup,’ for Viral Spread, Disease Expert Says
Campaign rallies like those planned by Trump and other social gatherings could spread infections this summer. People should adhere to wearing masks and continue social distancing, public health researchers say.
The coronavirus won’t be loosening its grip on the United States any time soon, leading infectious disease experts said on Sunday. They are also uncertain how the viral spread will be affected by the patchwork of states reopening businesses and by large events like protests and President Trump’s upcoming campaign rallies.
“This virus is not going to rest” until it infects about 60 percent to 70 percent of the population, Dr. Michael T. Osterholm, the director of the Center for Infectious Disease Research and Policy at the University of Minnesota, said on “Fox News Sunday.”
Experts have estimated that without a vaccine, about 70 percent of the population will need to be infected and develop immunity in order to stop the virus’s spread, a concept called herd immunity. The number of confirmed American cases now exceeds 2 million, less than 1 percent of the U.S. population, according to the Johns Hopkins Covid-19 Dashboard and the Centers for Disease Control and Prevention.
Joseph Fair, a virologist and epidemiologist who recently recovered from a serious bout of Covid-19, echoed that view on NBC’s “Meet the Press.”
“Once it gets so ingrained in the population, there’s not a point where we can come back from that other than having a vaccine in place,” said Dr. Fair, who is a medical contributor to NBC News.
Dr. Osterholm said that recent data show the rate of new cases has been level in eight states, increasing in 22 states and decreasing in the rest. The increase is not simply because of more widely available testing, the experts said, noting that an especially worrisome development is a rise in hospitalizations in several states.
Full Coverage: The New York Times