Hundreds of Chinese businesses seek billions in loans to deal with coronavirus

More than 300 Chinese companies are seeking bank loans totaling at least 57.4 billion yuan ($8.2 billion) to help to soften the impact of the coronavirus outbreak, two banking sources said.

Authorities have cordoned off cities, suspended transport links and shuttered facilities where crowds gather, hammering economic growth that one senior economist said could slow to 5% or less in the first quarter.
Extended factory closures, meanwhile, will slow manufacturing and weigh on global supply chains.
Among the prospective borrowers are food delivery giant Meituan Dianping (3690.HK), smartphone maker Xiaomi Corp (1810.HK), ride-hailing provider Didi Chuxing Technology Co, facial recognition start-up Megvii Technology Inc and internet security business Qihoo 360 Technology Co, the sources said, adding that the companies seeking loans were either involved in the control of the epidemic or had been hardest hit.
China is fighting to contain the epidemic, which has killed more than 900 people in the country and infected more than 40,000.
The companies seeking loans in the Chinese capital are likely to get fast-track approvals and preferential interest rates, said the sources, who received copies of two lists of company names sent to Beijing banks by the city government’s finance bureau.
The two lists also contained the size of loans sought.

There is no official data showing the total loans Chinese companies are seeking nationwide to weather the outbreak.
“Banks will have the final say on lending decisions,” one of the sources said. “The interest rates are likely to be on par with those offered to banks’ top clients.”
Xiaomi, the world’s fourth-biggest smartphone maker, is seeking 5 billion yuan ($716 million) in loans to produce and sell medical equipment including masks and thermometers, according to the lists.
Meituan Dianping is seeking 4 billion yuan, partly to help finance free food and deliveries to medical staff in Wuhan, the epicenter of the outbreak in central Hubei province.
Privately held Didi Chuxing, “severely impacted by the virus outbreak”, is seeking 50 million yuan.

FACIAL RECOGNITION

Exchange disclosures showed that Xiaomi’s third-quarter revenue growth slowed, but gross profit surged 25.2% year on year to 8.2 billion yuan. Meituan Dianping has been profitable for the past two quarters.

Beijing-based Qihoo 360 is seeking 1 billion yuan ($143.3 million) to buy medical-related products and finance work on apps to track and contain the virus.
Facial recognition start-up Megvii applied for 100 million yuan to develop technology including means to improve the accuracy of identifying masked individuals in crowds, according to one of the lists.
Megvii declined to confirm the loan or the loan application.
Megvii said it is working to optimize the artificial intelligence-enabled body temperature screening product it launched last week to help fight the virus, by spotting and locating people in a crowd who have elevated temperatures, even if they are wearing masks. Megvii does not verify the personal identities of people wearing masks.
Beijing-based Megvii has sought to raise funds through an initial public offering in Hong Kong, but its efforts were initially delayed after its inclusion on a U.S. trade blacklist over alleged involvement in human rights violations related to Beijing’s clampdown on Uighurs in China’s Xinjiang region. The company has said it “strongly objected” to the U.S. move.
Meituan Dianping, Didi and Xiaomi declined to comment. Qihoo 360 did not immediately respond to requests for comment.
The financial bureau of the Beijing city government did not respond to an emailed request for comment.
The finance bureau previously said that businesses seeking financial support could ask for its help.
Companies on the bureau’s lists also include vegetable market operators, ambulance manufacturers, environmental protection firms and other businesses key to maintaining food supplies and supporting efforts to contain the outbreak. But it was not immediately clear if all of them are creditworthy.
“The banks won’t lend to all because they need to evaluate whether those companies are really able to pay back,” one of the sources said.
China’s central bank has injected cash into the banking system to shore up market confidence, while the banking and insurance watchdog has also urged lenders to lower interest rates.
The local bureaus of the National Development and Reform Commission (NDRC), the top economic planner, and the Ministry of Industry and Information Technology (MIIT) are also compiling lists of affected companies and offering them support.
https://www.reuters.com/article/us-china-health-lending-exclusive/exclusive-hundreds-of-chinese-businesses-seek-billions-in-loans-to-contend-with-coronavirus-sources-idUSKBN204182

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Novartis lung cancer drug gets priority U.S. review

Novartis has won fast-track U.S. regulatory review for capmatinib (INC280) in a hard-to-treat form of lung cancer, the Swiss drugmaker said on Tuesday.
Capmatinib is a MET inhibitor being evaluated as a treatment for first-line and previously treated patients with locally advanced or metastatic MET exon 14 skipping (METex14) mutated non-small cell lung cancer.
“If approved, capmatinib will be the first therapy to specifically target METex14 mutated advanced lung cancer, a type of lung cancer with a particularly poor prognosis,” Novartis said in a statement.
https://www.reuters.com/article/us-novartis-cancer/novartis-lung-cancer-drug-gets-priority-u-s-review-idUSKBN2050J9

Xi warned officials that efforts to stop virus could hurt economy

Chinese President Xi Jinping warned top officials last week that efforts to contain the new coronavirus had gone too far, threatening the country’s economy, sources told Reuters, days before Beijing rolled out measures to soften the blow.

With growth at its slowest in nearly three decades, China’s leaders seem eager to strike a balance between protecting an already-slowing economy and stamping out an epidemic that has killed more than 1,000 people and infected more than 40,000.
After reviewing reports on the outbreak from the National Development and Reform Commission (NDRC) and other economic departments, Xi told local officials during a Feb 3 meeting of the Politburo’s Standing Committee that some of the actions taken to contain the virus are harming the economy, said two people familiar with the meeting, who declined to be named because of the sensitivity of the matter.
He urged them to refrain from “more restrictive measures”, the two people said.
Local authorities outside Wuhan – where the virus is thought to have first taken hold – have shut down schools and factories, sealed off roads and railways, banned public events and even locked down residential compounds. Xi said some of those steps have not been practical and have sown fear among the public, they said.
China’s state council information office did not immediately respond to requests for comment.

The official Xinhua News Agency, reporting on the Politburo meeting last Monday, called the coronavirus outbreak “a major test of China’s system and capacity for governance.” It added, without details, that “party committees and governments of all levels were urged to achieve the targets of economic and social development this year.”
Since the meeting, China’s central bank has vowed to step up support for the economy and prepared policy tools to offset the damage. The NDRC said at a weekend briefing that it was urging companies and factories to resume work, especially in “key industries” such as food and pharmaceuticals.
“In the context of the epidemic and the downward pressure on the economy, it is more important to maintain economic growth,” Pan Gongsheng, vice-governor of China’s central bank, said on Friday.
On Monday, Zhejiang province, an economic powerhouse in eastern China, ordered local authorities not to overreact by restricting everyday movement or shutting down “shops of chain stores and convenience stores that sell daily necessities such as vegetables, cooking oil as well as meat, eggs and dairy products,” according to a government release.
China has unveiled new tax policies as it tries to reduce the burden on industries hit heavily by the epidemic.
Reuters reported this month that policymakers in China are preparing measures, including more fiscal spending and interest rate cuts, amid expectations the outbreak will devastate first-quarter growth.

Many in China returned to work on Monday after the Lunar New Year holiday was effectively extended for about 10 days, but morning commutes were far less crowded than usual and numerous factories remained shut.
The ruling Communist Party’s propaganda department last week ordered state media to focus on “economic recovery”, according to a person with direct knowledge of the order, who declined to be named because of the sensitivity of the situation.
China’s official media has been trying to project calm. In a Monday editorial, the official People’s Daily urged the public to deal with the epidemic with a “positive mood”.
https://www.reuters.com/article/us-china-health-xi-economy/xi-warned-officials-that-efforts-to-stop-virus-could-hurt-economy-sources-idUSKBN2050JL

China’s top virus expert says outbreak may peak this month

China’s coronavirus epidemic may peak in February and then plateau before easing, the government’s top medical adviser on the outbreak said.
In an exclusive interview with Reuters, Zhong Nanshan, a leading epidemiologist who won international fame for his role in combating the SARS epidemic in 2003, said the situation in some provinces was already improving, with the number of new cases declining.
Zhong, who had previously predicted an earlier peak, said the forecast was based on modeling and developments in recent days, as well as government action.
“So, we suppose maybe, the peak time may be reached at the, maybe middle or late this month, February … and then keep a little bit plateau or something like that and, then going down,” he said.

He said containment measures in the city of Wuhan, the epicenter of the outbreak, were necessary, and the country should also permanently ban trade in wildlife.
It also needed to improve its disease control mechanisms and even help set up a global early warning system for contagious diseases.
https://www.reuters.com/article/us-china-health-doctor-exclusive/exclusive-chinas-top-virus-expert-says-outbreak-may-peak-this-month-idUSKBN2050VF

China launches coronavirus ‘close contact detector’ app

China has launched an app that allows people to check whether they have been at risk of catching the coronavirus.

The ‘close contact detector’ tells users if they have been near a person who has been confirmed or suspected of having the virus.
People identified as being at risk are advised to stay at home and inform local health authorities.
The technology shines a light on the Chinese government’s close surveillance of its population.
To make an inquiry users scan a Quick Response (QR) code on their smartphones using apps like the payment service Alipay or social media platform WeChat.
Once the new app is registered with a phone number, users are asked to enter their name and ID number. Every registered phone number can then be used to check the status of up to three ID numbers.

The app was jointly developed by government departments and the China Electronics Technology Group Corporation and supported by data from health and transport authorities, according to the state-run news agency Xinhua.
It is widely known that the Chinese government conducts high levels of surveillance on its citizens but experts in the field suggest, in this case at least, it will not be seen as controversial within the country.

 

Hong Kong-based technology lawyer at the law firm DLA Piper Carolyn Bigg told the BBC: “In China, and across Asia, data is not seen as something to be locked down, it’s something that can be used. Provided it’s done in a transparent way, with consent where needed.”
“From a Chinese perspective this is a really useful service for people… It’s a really powerful tool that really shows the power of data being used for good,” she added.
The Chinese government defines ‘close contact’ as coming near to, with no effective protection, confirmed, suspected or mild cases of the coronavirus while the person was ill, even if they were showing no symptoms at the time.
‘Close contact’ covers:

• People who work closely together, share a classroom, or live in the same home
• Medical staff, family members or other people who have been in close contact with patients and their caregivers
• Passengers and crew who have been on planes, trains and other forms of transport with an infected person

For example, all air passengers within three rows of an infected person, as well as cabin staff, are seen as being in close contact, while other passengers would be recorded as having general contact.
When it comes to air-conditioned trains, all passengers and crew members in the same carriage are regarded as being in close contact.
https://www.bbc.com/news/technology-51439401