A weekly round-up of leading business/economic stories shaping East Asia from the pages of the regional press – April 12
Aviation/Air Asia – “The founders of AirAsia Group Bhd will not take salaries and its staff has agreed to an as much as 75% cut in pay due to the impact of the Covid-19 outbreak on the airline, its chief executive said late on Saturday. Tan Sri Tony Fernandes said in an Instagram post that he and Executive Chairman Datuk Kamarudin Meranun ‘will not be taking a salary during this period,’ while staff from across the business ‘have accepted temporary pay reductions of anywhere between 15-75%, depending on seniority, to share the impact this is having on our business.’ The budget airline has no incoming revenue and 96% of its fleet is grounded, Fernandes said,” Reuters/Edge Markets Malaysia reports.
Japan/Uniqlo – “Fast Retailing, owner of casual clothing chain Uniqlo, forecast a 44% fall in full-year (September-August) profit after the coronavirus outbreak hit sales in China and dealt a setback to its ambitions of conquering the U.S. and European markets. The pandemic briefly disrupted Uniqlo’s supply chain throughout China and forced it to shut over half of its 750 stores in the country, the company’s biggest growth market in recent years. ‘This is the biggest crisis for humanity since the end of the war,’ CEO Tadashi Yanai told a news conference on Thursday,” Japan Today reports.
China/Autos – “China’s passenger car market saw a strong month-on-month rebound in March as business resumption gained momentum amid further containment of the novel coronavirus epidemic. Retail sales surged more than 300 percent from February to 1.04 million units, and 90 percent of dealers were back on track for services and mostly online sales, the China Passenger Car Association said yesterday,” Shanghai Daily reports.
China/Hubei – “Chinese e-commerce giant JD announced it will invest more than 6 billion yuan ($849 million) in Hubei, the hardest-hit region by the COVID-19 outbreak on the Chinese mainland, over the next three years. The investment is part of a bid to help boost the economic recovery and development of local small and medium-sized enterprises in the area,” China Daily reports.
Shipping – “Container shipping companies are cancelling sailings and merging routes to cut losses and stay afloat amid a drop in demand and a worsening outlook for global trade because of the Covid-19 pandemic. The number of “blanked” or cancelled sailings rose last week from 45 to 212, according to a report by shipping consultancy Sea-Intelligence on Monday. The report added that the largest capacity withdrawal was from the Asia-Europe routes, where 29 to 34 per cent of capacity has been removed,” The South China Morning Post reports.
World Trade – “Global trade could plummet by a third this year due to the coronavirus pandemic, the World Trade Organization said Wednesday, warning the deepest recession ‘of our lifetimes’ could be on the horizon. ‘COVID-19 has completely upended the global economy and with it international trade,’ WTO chief Roberto Azevedo told reporters in a virtual briefing from Geneva. The global trade body was projecting that ‘trade in 2020 will fall steeply in every region of the world, and basically across all sectors of the economy.’ he said,” AFP/Jakarta Post reports.
S. Korea/Doosan – “Doosan Heavy Industries & Construction, as we know, is in deep financial trouble. The company, which has staggered through years of growing losses, has finally reached out to the government for help. Its ballooning debt level and lack of new contracts have taken a toll on the Doosan Group, the 15th largest conglomerate in Korea, with even distant affiliates taking hits to their credit ratings. For the past several years, good news has been hard to come by at Doosan Heavy Industries. Domestic energy policies have turned away from coal and nuclear power — historically, the construction firm’s bread and butter. Similarly, the international company has suffered from a global shift toward renewable energy sources and pivoted away from traditional ones.” Korea JoongAng Daily reports.
S. Korea/KIA – “Kia Motors Corp., South Korea’s second-biggest carmaker, is considering temporarily suspending some of its plants in the country later this month due to the fallout from the novel coronavirus pandemic, industry sources said Sunday. It is planning to halt operations of three factories — two in Gwangmyeong, south of Seoul, and one in Gwangju, 330 kilometers south of Seoul — from April 23-29, according to the sources. The company runs nine domestic manufacturing facilities, including one as a joint venture. The three plants produce most of Kia Motors’ export vehicles, including the Sportage and Soul,” The Korea Herald reports.
Indonesia/Coronavirus – “Indonesia has imposed curbs on public transport ahead of the annual exodus to home villages that marks the end of the Muslim fasting month of Ramadan, in a bid to slow the spread of the coronavirus, the government said on Sunday. About 75 million Indonesians usually stream home from bigger cities at the end of Ramadan, due this year at the end of May, but health experts have warned against a surge in cases after a slow government response masked the scale of the outbreak,” Reuters reports.
Taiwan – “If the Wuhan coronavirus (COVID-19) pandemic lasts beyond the summer, Taiwan could find it hard to see its economy grow by even just 1 percent, business leaders said Friday (April 10). Most forecasts from before the pandemic saw Taiwan’s Gross Domestic Product expand by at least 2 percent during 2020, though as the virus started affecting more countries, economists and institutes started adjusting the figure downward to just above or under 2 percent,” Taiwan News reports.
Aviation/Vietnam/Cambodia – Vietnam’s national flag carrier is divesting its stake in Cambodia Angkor Air and has also signed a contract to sell five aircraft. This information was revealed in post-audit notes to Vietnam Airlines’ audited 2019 consolidated financial statement released Friday, which explains how the company has been impacted by the Covid-19 epidemic this year,” VN Express reports.
Singapore/Digital Payments – “The coronavirus pandemic is likely to help drive digital payments’ adoption in Singapore, with non-cash payments expected to take a 54% market share in 2020, a report by GlobalData revealed. Coupled with the support of the government, cashless payments are expected to grow exponentially in the country, eventually taking more than half of market share at 61% in 2023,” Singapore Business review reports.
Philippines/Coronavirus – “The number of Covid-19 cases in the country soared to 4,648 as the death toll also rose to 297, with the highest number of deaths so far in a day – 50 — reported. In a virtual presser, Health Undersecretary Maria Rosario Vergeire said that as of 4p.m. Sunday (April 12), the Department of Health (DOH) reported 220 new cases (PH4,429-PH4,648),” Business Mirror reports.
Petrochemicals – “Energy traders have chartered at least ten clean tankers to load refined products — primarily the blendstock naphtha — in the Americas this month for shipment to Asia, where Covid-19 containment measures are loosening and petrochemical plants are starting up,” Argus reports.