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China Insights

SwedCham China Insights for the week of August 2-6, 2021

Top news of the week:

  • Risk of government intervention halts Chinese companies’ plans of US IPO
    August 2, 2021

    The US Securities and Exchange Commission stopped accepting registrations for the issuance of securities by China-based companies. The agency said that they will not allow Chinese companies to raise money in the United States unless they fully explain their legal structures and disclose risks of Beijing interfering in their businesses. The China Securities Regulatory Commission responded that they hope to see increased dialogue about how to create rules for listing.

  • Latest outbreak in China traced to airline from Russia
    August 3, 2021

    According to the National Health Commission, from Monday to Sunday in the past week, 269 new domestically transmitted symptomatic infections and 95 new domestically transmitted asymptomatic infections have been identified. This outbreak starting in Nanjing has been linked to a plane arriving from Russia.

     

  • China urges nationwide improvement on physical exercises by 2025
    August 4, 2021

    On 3 August, the State Council published the national fitness plan 2021 – 2025 as a guiding plan for Chinese people to better practice fitness for better health. The plan specified that by 2025, all communities should be within a “15-minute” zone for public fitness equipment and/or facilities and aim to reach a total value of five trillion-yuan sports industry by then. Analysts see the plan partially as a measure to stimulate domestic demand.

  • China confronts and struggles to contain new outbreak
    August 5, 2021

    The outbreak of the SARS-CoV-2 Delta variant in China has now spread to 17 provinces with over 144 high or medium risk regions reported, making a new record high after China claimed normalised disease prevention and control. Jiangsu and Hunan remain the most severe areas hit by the Delta variant, with Nanjing, Zhangjiajie and Zhengzhou applying a strict lockdown, and Jiangsu province closing its road boarders.

  • Realistic approach to carbon emissions plans necessary
    August 6, 2021

    China is working to balance the long-term goal of reducing carbon emission and the current pressure of supply and price turbulence of commodities. In the CPC Politburo meeting held last week, top leadership urged all to correct “campaign-like” carbon reductions, especially to stop ineffective actions at the local level, including setting unpractical goals, shutting down factories unreasonably, and taking a “slogan over actions” approach. Experts also worry that these short-term campaigns will significantly impact traditional enterprises.

Insight of the week:

As more cases continue to be identified of the more contagious Delta variant of COVID-19, many cities re-enact hard-line measures to curb the potential spread of COVID-19. The outbreak of the SARS-CoV-2 Delta variant in China has now spread to 17 provinces with over 144 high or medium risk regions with over 500 confirmed cases reported, marking a new record high after China claimed normalised disease prevention and control. Jiangsu and Hunan remain the most severe areas hit by the Delta variant, with Nanjing, Yangzhou, Zhangjiajie and Zhengzhou applying a strict lockdown, and Jiangsu province closing its road boarders. The variant breached into the capital city as well, which significantly upgraded the national disease prevention and control measures. Even cities with no confirmed cases are also applying strict measures to prevent local outbreaks. For example, Harbin of Heilongjiang province, proactively closed all entertainment businesses and forbid gathering. China’s airline and railway authorities published free-refund policies for all travellers traveling domestically in August, which instantly triggered massive refunding. For international travels, authority has suspended issuing new passports to citizens unless it is proven to be necessary and urgent. Analysts believe the previously expected high frequency of travel and tourism during the summer vacation will have an early end, which may bring significant impacts to the tourism industry. Places like Hainan that rely heavily on tourism have already identified several cases in Haikou and Sanya, leading to new testing requirements and domestic travel restrictions. Although China has recorded a total of over 1.7 billion doses of vaccination, the average vaccination rate for the entire population remains low which the government will continue to promote. The Delta variant, which has been proven to be more vaccine-resistant and infectious than the initial coronavirus could prove to be a catalyst for a change in COVID-19 strategy throughout China. The “zero tolerance” approach to COVID-19 that has been incredibly effective against the initial strains and outbreak control is currently being put to the test across China.

About Kreab

Founded in Stockholm, Sweden, in 1970, Kreab is a global strategic communications consultancy with offices in 25 countries, serving over 500 global clients. Kreab advises on communication issues of strategic importance in business, finance, and politics, helping clients solve complex communications challenges and achieve their strategic goals. The Kreab Beijing team is well known for its track record of helping clients manage and strengthen their reputation through services spanning corporate communications, financial communications, public affairs, and social media. Contact Kreab at kchina@kreab.com, follow Kreab on WeChat (ID: KreabChina), or visit Kreab’s website at https://www.kreab.com/beijing.