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China Last Week – Megan Gummer Discusses Working From Home In China & Trade Updates

Hi, I’m Megan, a marketing analyst at KraneShares. Welcome to China Last Week.

This week, the outlook on the coronavirus appears to be improving. According to the Chinese National Health Counsel, with the exception of Hubei Province, the number of confirmed cases within China has continuously declined over the past 16 days. On Feb 19th, only 45 new cases were found across 30 provinces, which is a 95% decline from 2 weeks ago.  An increasing number of provinces have no new daily confirmed cases.

The impact of the virus has caused companies to experience some challenges. Apple was the first US company to revise its quarterly estimates due to the coronavirus. The company said that the virus and ensuing travel restrictions hampered sales and forced the company to close many stores within its massive China portfolio. However, stores and factories began to reopen with limited hours last week. The company says that returning to business as usual has been a slow process.

Additionally, the virus has created a new stay-at-home lifestyle in China. People have been relying on internet services for everything from work to entertainment. According to Tencent, since February 10, the business volume of its office collaboration application, Enterprise WeChat, has increased 10 fold. The daily active users of DingTalk, a communication platform developed by Alibaba Group, has reached its highest levels in five years, with 200 million daily active users. Huawei’s office software, Huawei Cloud, has gained more than 1 million new users each day.

As the situation improves, more and more people are returning to work. Companies across various industries are trying to make up for losses from temporary closures. In the manufacturing sector, things are returning to normal… in a statement from its chairman, Midea, one of China’s top electrical appliance manufacturers, told the press that they will not lay off employees or give pay cuts.

Companies allowing employees to return to work have adopted strict sanitation routines… for example, the employees of Hytera, a leading Chinese telecommunication company, are required to have regular temperature checks and hand disinfections.

In US-China Trade News…

Trade officials in China have begun to accept applications for tariff waivers on 696 American products. This is a great sign of good faith in trying to meet phase one trade deal commitments even in the face of the coronavirus.

Mainland investors continue to invest in China’s stock market. We believe improved trade sentiment paired with the expectation for continued stimulus to help absorb the economic impact of the Cornavirus, are drawing investors into China’s mainland markets.

According to data from Alipay, a global payment platform similar to Applepay but with additional functions such as investing, Alipay found that average daily purchases of mutual funds by its users has increased 400% since before the Lunar New Year.

Thank you for watching! If you would like to see more, please subscribe to us at chinalastnight.com. Tune in next week for the latest update on China. Many thanks from KraneShares.