China grinds back to work as wage cuts kick in

Business | Reuters, agencies and Winnie Lee 20 Feb 2020

Guangdong and Jiangsu provinces and Shanghai claimed they have resumed half of their operations, while there a rising number of private companies in China are cutting wages or freezing pay.

Thirty-six out of 37 key grain and oil processing enterprises are back on track, while 80 percent of major firms in the nonferrous metals industry have reopened.

Producers of disease prevention-related materials have registered marked progress in work resumption. Face mask factories are up to their ears, with over 100 percent of their production capacities in service.

PBOC and Ministry of Finance officials will be absent from the G20 meeting of finance ministers and central bank governors in Riyadh due to the virus outbreak.

A growing number of China's private companies have cut wages, delayed paychecks or stopped paying staff completely, saying the economic toll of the coronavirus has left them unable to cover labor costs.

It's hard to say how many people have lost wages, but in a survey of more than 9,500 workers by Chinese recruitment website Zhaopin, more than one-third said they were aware of it.

Unsurprisingly, hiring has all but ground to a halt. Zhaopin estimates the number of job resumes submitted in the first week after the January outbreak was down 83 percent from a year earlier.

Chinese recruitment website Zhaopin estimates that the number of job resumes submitted in the first week after the January outbreak was down 83 percent year-on-year.

Moody's forecast the virus may halve the global economic growth to 1.1 percent while S&P believes Chinese economy will recover in the third quarter if the virus can be contained in March.

AXA Investment Managers expects China's first-quarter GDP growth may slow to 4 percent and the central bank will cut LPR by 10 basis points on Wednesday.

AllianzGI says liquidity injected by the Central Bank cannot stimulate the economy unless the virus can be contained, marking an overall positive towards the Chinese market.

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