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China Moves to Ease Mounting Anger With Reset of Virus Fight

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(Bloomberg) — China took action on two fronts to gain control of the spiraling coronavirus outbreak gripping the country: reporting a dramatic increase in cases and ousting top officials who failed to check the disease’s expansion.First, health authorities revealed Thursday that cases in Hubei province, where the disease first emerged, had surged by 45% to almost 50,000 after they included a new group of patients. That raised the global tally to almost 60,000, dashing hopes that the epidemic might be easing. Additional cases announced Friday by China increased the total further to more than 64,000 worldwide. Authorities also announced the replacement of the two most senior Communist Party officials in Hubei and its hard-hit capital, Wuhan. Shanghai Mayor Ying Yong — a former top judge who once served under President Xi Jinping — was named to replace embattled provincial boss, Jiang Chaoliang.The shakeup represented the biggest political fallout yet from an outbreak that has in a little over two months shaken confidence in China’s leaders and caused countries from the U.S. to Japan to restrict or block visits by its citizens. The decision on the heels of the expanded case tally was reminiscent of a boardroom reset, in which bad numbers are disclosed first to give the new team a clean slate.“First of all, they are trying to clean up the backlog of untested people who haven’t been confirmed,” said Ether Yin, partner at Beijing-based consulting firm Trivium China. “It’s politically important for them to get the number right before the new party boss comes in, so that all the new confirmed cases happened under Jiang Chaoliang’s watch. The new party secretary needs a new starting line.”The surprise revision came amid mounting speculation that China was undercounting cases of the new coronavirus strain, as countries around the world struggle to contain a disease that appears to spread when patients show only mild symptoms. Daily declines in new cases in Hubei earlier this week helped push U.S. equity markets to record highs on Wednesday.Asia stocks were mixed Friday as traders continued to digest China’s latest coronavirus data, after most global equity markets fell on Thursday. The moves came hours after Xi urged a meeting of the Politburo’s supreme Standing Committee to follow through on epidemic-control efforts, which he said had achieved “positive” results.‘All-Out’ EffortsXi has ordered “all-out” efforts to contain the disease and forcibly quarantined more than 40 million people in Hubei, while the party appointed a task force led by Premier Li Keqiang to coordinate the nationwide response. In recent days, the central government sent two senior officials to help lead the response in Hubei, and removed two top members of the provincial health commission from their posts.Pressure has increased on the party after a nationwide outpouring of grief and fury over the death of Wuhan doctor Li Wenliang, who was accused by local police of spreading rumors after sounding one of the first warnings about the outbreak of the disease now known as COVID-19. Indications that news of Li’s death from the disease was also censored by Chinese authorities prompted further outrage on social media.“With the full support of the central leading team, the new frontline commanders, together with some newly appointed officials to head the local disease control and prevention systems, have been entrusted with the urgent mission of getting to grips with the situation in the hardest-hit region,” the China Daily, a state-run newspaper directed at an English-speaking audience, wrote in a commentary published Thursday.The reset met was with skepticism on Chinese social media, where residents had long speculated based on anecdotes reported in local media and shared online that case numbers were higher than the official tallies. Many compared the approach to the actions of a troubled company.“Past liabilities got cleared, so the new officials can start afresh, unburdened by the prior failures,” wrote a Weibo user named Maitian with more than 200,000 followers. The post was widely shared on the Twitter-like platform before disappearing. By early Friday, “Wuhan case number unclear” had become a top trending topic on Weibo.The reshuffle raises the stakes for Xi as he takes greater personal responsibility for the response. Ying was appointed mayor of Shanghai in January 2017 after a career spent mostly in the financial center and neighboring Zhejiang province, including stints under the future president.Jiang, a former governor of Jilin province who’s held posts at several banks, has led Hubei’s provincial party committee since October 2016. He had previously led the People’s Bank of China’s Shenzhen and Guangzhou branches during the Asian financial crisis.Local officials often bear the brunt when crises threaten the ruling party. China fired more than 100 officials, including the health minister and the mayor of Beijing, after allegations that local governments suppressed information about a similar outbreak of Severe Acute Respiratory Syndrome, or SARS, in 2003.“This is a critical juncture of the campaign, so you also want to show resolve — that the central government is winning the war, and is even willing to change the leadership to get that done,” said Yanzhong Huang, a senior fellow for global health at the New York-based Council on Foreign Relations and director of Seton Hall University’s Center for Global Health Studies. “This is a demonstration of resolve — and the fact that they’re willing to take heed of public opinion.”Counting MethodThe change in counting method will renew concern over the effectiveness the tests currently used to identify stricken patients globally, and raise questions over the true scale of the outbreak that has killed almost 1,400 people, all but three on mainland China.The traditional nucleic acid test identifies the virus in a patient’s body through its specific genetic sequence, but reports of a severe lack of test kits and the unreliability of test results have circulated since the start of the crisis. In Wuhan, people with symptoms like fever and coughing wait for hours in line to get tested. Those who test negative are usually turned away from the hospital.The issue has cropped up outside China, as well. On Wednesday, the U.S. Centers for Disease Control and Prevention said that test kits shipped to labs around the world last week have proved faulty.The spike in number will likely intensify public anger against the government’s handling of the crisis. In an update to its treatment guidelines on Feb. 5, China’s National Health Commission added the category of “clinically diagnosed cases” in recognition of a shortage of nucleic acid tests. Hubei didn’t include that category in its count until Thursday, a week later.Yin, the Trivium partner, said the revision could actually help counter skepticism about China’s official data on the outbreak. “If the government is willing to see numbers jump by over 10,000 overnight, I would say that actually shows the government is not hiding the numbers this time,” Yin said.(Updates with latest markets and case totals.)\–With assistance from Iain Marlow, Linly Lin and Yueqi Yang.To contact Bloomberg News staff for this story: Peter Martin in Beijing at pmartin138@bloomberg.net;Dandan Li in Beijing at dli395@bloomberg.net;Dong Lyu in Beijing at dlyu3@bloomberg.netTo contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, ;Rachel Chang at wchang98@bloomberg.net, Karen Leigh, Sharon ChenFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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Germany, Spain Cases Slow; Dimon Sees Recession: Virus Update

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(Bloomberg) — Germany and Spain reported lower numbers of new cases, a tentative sign that lockdown measures are easing the outbreak. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said he expects the fallout to include a major economic downturn and stress similar to the crisis that almost brought down the U.S. financial system in 2008.Japanese Prime Minister Shinzo Abe said he’ll propose a state of emergency in some prefectures, while U.K. Prime Minister Boris Johnson was hospitalized as a precaution. Austria said it is taking the first steps to restart the economy after Easter.Stock markets rallied after President Donald Trump said he sees signs the pandemic is beginning to level off in the U.S. In New York State, fatalities fell for the first time on Sunday, though Governor Andrew Cuomo said it was too early to say if the outbreak had reached a peak.Key Developments:Global cases near 1.3 million; deaths top 70,000: Johns HopkinsTrump and Pence see signs the U.S. outbreak is ‘stabilizing’Tesla shows ventilator prototype made from car componentsIndia bans exports of “game changer” virus drugWuhan emerges from lockdown with a missionVirus spurs global free-for-all in medical tradeGlaxo to Develop Covid-19 Drugs in $250 Million Partnership (8:14 a.m.)U.K. pharmaceutical giant GlaxoSmithKline Plc is joining dozens of companies in the hunt for therapies to treat the illness caused by the coronavirus, signing a partnership with Vir Biotechnology Inc. and agreeing to invest $250 million in the U.S. company.South Africa’s Economy May Shrink as Much as 4%, Central Bank Says (8:09 a.m. NY)South Africa’s economy could contract by 2% to 4% this year due to the coronavirus pandemic and measures to curb its spread, according to the Reserve Bank. The monetary policy committee projected in March that the economy will contract by 0.2%.U.K. PM Johnson Had ‘Comfortable Night’ and Is in ‘Good Spirits’ (8:07 a.m. NY)Prime Minister Johnson is in “good spirits” after spending a “comfortable” night in St. Thomas’s hospital in central London, his spokesman, James Slack, said on Monday. Johnson went to the hospital on Sunday as a “precaution,” he said.Mass Layoffs Push Canada’s Consumer Confidence to All-Time Low (8:00 a.m. NY)The Bloomberg Nanos Canadian Confidence Index, a composite gauge based on a telephone survey of households, declined sharply for a third week as extensive lock downs triggered mass layoffs. The aggregate index dropped to 42.7 last week, the lowest reading since polling began in 2008.Romania to Extend State of Emergency Until Mid-May (7:53 a.m. NY)Romanian President Klaus Iohannis said that he plans to extend the state of emergency over the crisis by another month because “we haven’t reached the peak of the epidemic, so it’s not time to relax.”Netherlands Has Slowest Death Growth in Week (7:40 a.m. NY)The Netherlands reported 101 new fatalities, the smallest increase since March 30. Total reported cases rose 5% to 18,803. An additional 260 patients were admitted to hospitals, according to the RIVM National Institute for Public Health and the Environment.China to Strengthen Transport Control Measures Along Borders (7:15 a.m. NY)China will tighten quarantines in border areas, following a meeting chaired by Premier Li Keqiang. The number of confirmed coronavirus cases found in people who arrived through a land border has surpassed those that came by air.Dimon Sees ‘Bad Recession’ and Echoes of 2008 Crisis Ahead (7:11 a.m. NY)“At a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008,” the CEO said Monday in his annual letter to shareholders. “Our bank cannot be immune to the effects of this kind of stress.”Nigeria to Borrow $6.9 Billion to Offset Virus Impact on Economy (7:03 a.m. NY)The government plans to raise as much as $6.9 billion from multilateral lenders to offset the impact of the pandemic. The state will seek $3.4 billion from the International Monetary Fund, $2.5 billion from the World Bank and a further $1 billion from the African Development Bank, Finance Minister Zainab Ahmed told reporters Monday.French Firms Have Requested Guarantees for EU20 Billion of Loans (6:58 p.m. NY)French Finance Minister Bruno Le Maire said 100,000 companies requested government loan guarantees for a total of 20 billion euros ($21.6 billion). In addition, more than 500,000 small companies have requested aid from France’s solidarity fund.Redhill Announces First Covid-19 Patient Treated With Opaganib (6:19 a.m. NY)RedHill Biopharma said the first patient with a confirmed coronavirus diagnosis was dosed with opaganib in Israel, and additional patients are expected to be treated in the coming days. Pre-clinical data demonstrated anti-viral effects in other viruses, anti-inflammatory activities and the potential to reduce lung inflammation, the company said.Hungary Announces Virus Stimulus Plan of Up to 20% of GDP (6:17 a.m. NY)Hungary’s government will pay some-private sector wages, offer loan guarantees and boost spending on infrastructure and pensions as part of a major fiscal stimulus plan aimed at averting a recession and mass unemployment as the coronavirus pummels the economy. The package, valued at 18% to 20% of gross domestic product including planned stimulus from the central bank, will also see the 2020 budget deficit rise to 2.7% of GDP from 1%, Prime Minister Viktor Orban said on Monday.Iran Reports 136 New Deaths, Compared With 151 on Sunday (5:53 p.m. HK)The nation also reported 2,274 new infections, taking the total to 60,500. Total deaths now stand at 3,739.Austria Takes First Steps Toward Economic Restart Next Week (5:43 p.m. HK)Austrian small retailers, hardware and gardening shops will reopen next week after national lockdown measures succeeded in slowing the spread of coronavirus. Chancellor Sebastian Kurz said. But social distancing rules will apply at least until the end of April.Nestle Struggles to Keep Up With Rising Demand, CEO Says (5:40 p.m. HK)Nestle SA is struggling to keep up with consumers’ appetites as obstacles slow down production at the world’s largest food and beverage company, Chief Executive Officer Mark Schneider said. The maker of Pure Life bottled water and DiGiorno pizzas is seeing very strong demand for essential food and drink items, though many of its factories are unable to run at 100% capacity, Schneider said in an interview on Bloomberg Television.Spain Reports Lowest Number of New Virus Cases Since March 22 (5:34 p.m. HK)Spain reported the lowest number of new cases in more than two weeks, a sign that Europe’s biggest outbreak is slowing. New infections were 4,273, taking the total to 135,032, according to Health Ministry data on Monday. The death toll rose by 637 to 13,055 in the past 24 hours, a smaller gain than Sunday’s 674 and the lowest number of daily fatalities since March 24.Airbus Tells Employees Production Rebound Unlikely in Short Term (5:33 p.m. HK)Airbus SE has told employees that a return to full operations isn’t feasible in the short term because of parts shortages and the inability of struggling airlines to take delivery of new aircraft, according to a person familiar with the matter.Dubai Said in Talks to Raise Funds as Shutdown Weighs on Economy (5:30 p.m. HK)Dubai is in talks to raise funds to shore up its finances as the pandemic shuts down much of the economy, according to people familiar with the matter. The emirate’s Department of Finance is holding discussions with banks about a potential bond sale or loan, the people said, asking not to be identified because the information is private.Poland Backs EU Plan to Issue Coronavirus Bonds: Premier (5:02 p.m. HK)Poland is ready to participate in mechanisms to guarantee the issuance of coronavirus bonds by the European Union to help fight pandemics, Premier Mateusz Morawiecki tells parliament.Japan’s Abe Moves to Declare Emergencies in Tokyo, Osaka Areas (4:57 p.m. HK)Prime Minister Shinzo Abe said he will propose a state of emergency in prefectures including Tokyo and Osaka for about a month, after a renewed surge of coronavirus cases in some of Japan’s biggest metropolitan areas. The move hands powers to local governments to try to contain the spread, including by urging residents to stay at home.Abe also announced a much larger-than-expected stimulus package of 108 trillion yen ($988 billion) to support households and businesses struggling from the impact of the pandemic.Hong Kong Reports 24 Additional Coronavirus Cases April 6 (4:45 p.m. HK)Eighteen had travel history, including five who returned from Peru on a government chartered flight, Hong Kong Department of Health official Chuang Shuk-kwan said. That brings the city’s total number of confirmed coronavirus cases to 914.U.K.’s 50 Billion-Pound Subsidies for Companies Wins EU Approval (4:30 p.m. HK)The U.K.’s plan to grant 50 billion pounds ($61.5 billion) to companies suffering the economic effects of the coronavirus outbreak won approval from the European Commission.Indonesia Coronavirus Cases Seen Soaring to 95,000 by Next Month (4:28 p.m. HK)Coronavirus may infect as many as 95,000 people in Indonesia by next month before easing, as authorities ordered people to wear face masks to contain the pandemic. The dire forecast is based on a projection by the nation’s intelligence agency, University of Indonesia and Bandung Institute of Technology, Finance Minister Sri Mulyani Indrawati said.Denmark Faces Budget Deficit of 6.5% Under Optimistic Scenario (4:04 p.m. HK)Denmark faces a budget deficit of 6.5% of gross domestic product this year under the most optimistic scenario provided by the Danish Economic Councils, an independent government adviser. In that model, GDP would fall by 3.5% this year as the economy quickly returns to normal, the group, known as the Wise Men, said in a statement on Monday.Milan Region Official Sees Italy Lockdown Lasting 2-3 More Weeks (3:51 p.m. HK)Italy’s lockdown should be prolonged for at least another couple of weeks, Lombardy’s top health official said. “Clearly, we cannot stay indoors for ever, but we believe that this sacrifice needs to be continued at least for another two to three weeks,” Giulio Gallera, the top health official of the Lombardy region, said on Canale 5. “Then, we’ll have to use precautions — masks, or other facial protections — to avoid starting another round of outbreaks.”Russia Reports 18% Increase in Covid-19 Cases (3:36 p.m. HK)Russia reported 954 new cases of overnight, bringing the total number to 6,343, Interfax said, citing Russian consumer health watchdog Rospotrebnadzor. There were two deaths, for a total of 47.Japan Consumer Confidence Tanks to Lowest Since Financial Crisis (3:23 p.m. HK)Japan’s consumer confidence tumbled in March, reflecting the massive hit to shoppers as the pandemic keeps people indoors. The cabinet office released numbers Monday showing a 7.4 percentage-point drop to 30.9. It also cut its overall assessment of consumers’ mindset to “worsening” from “stalling” in the previous month.Germany’s Virus Outbreak Slows With Lowest New Cases in Six Days (3:13 p.m. HK)Germany saw the lowest number of new coronavirus cases in six days in a tentative sign that lockdown measures are easing the outbreak. As restrictions across Europe’s largest economy enter their fourth week, infections rose by 4,031 to 100,123, according to data from Johns Hopkins University. The death toll increased by 140 to 1,584 on Monday, the lowest daily increase in five days.Paris Hospitals Head Sees Some Stability in France (2:56 p.m HK)The epidemic in France has “sort of” stabilized thanks to confinement measures, Martin Hirsch, head of Paris hospitals, said Monday on France Inter radio. The decrease in cases will be slow and any loosening of the confinement could actually restart the epidemic, he said.Indonesia Orders Citizens to Wear Face Masks (2:43 p.m. HK)Indonesian President Joko Widodo ordered citizens to wear face masks when leaving home to contain the pandemic that’s killed almost 200 people in the world’s fourth most populous nation.Authorities must ensure availability of face masks for every household, Widodo told a cabinet meeting. The appeal for compulsory use of masks follows a change in the World Health Organization’s advisory on use of protective face covers, the president said.Singapore Adds $3.6 Billion to Stimulus (2:26 p.m. HK)Singapore increased its cash payout to households and announced additional steps to save jobs in a third stimulus package as the city state prepares to go into a partial lockdown to contain a spike in coronavirus cases.The additional stimulus will cost S$5.1 billion ($3.6 billion), taking the nation’s total virus relief to almost S$60 billion, or 12% of gross domestic product, Deputy Prime Minister Heng Swee Keat said Monday in Parliament. The government will seek to draw an extra S$4 billion from past reserves and push up its budget deficit in the current fiscal year to 8.9% of GDP, he said.Thailand Sees Fewest New Cases Since March 20 (1:18 p.m. HK)Thailand reported 51 new coronavirus cases, the lowest number since March 20. The new infections bring the total number of cases to 2,220. The country confirmed three more deaths, bringing total fatalities to 26, according to Taweesilp Witsanuyotin, a spokesman for the Covid-19 center.Tesla Shows Ventilator Prototype (12:06 p.m. HK)Tesla Inc. engineers showed footage of a prototype ventilator the company is trying to make with auto parts amid a shortage of the machines for coronavirus patients. According to the video on Tesla’s YouTube channel, the design includes a touch screen, computer and control system from a Model 3 electric car.New York Governor Andrew Cuomo said supply-chain disruption is the biggest hurdle for every manufacturer, including Tesla. “Their timeframe frankly doesn’t work for our immediate apex,” he said at a press conference.South Korea Sees Lowest New Cases Since Surge (9:51 a.m. HK)South Korea reported 47 new coronavirus cases over 24 hours, the lowest number since the start of a surge on Feb. 21 connected to a religious sect. The health ministry said there are a total of 10,284 cases in the country, with 186 total deaths. The nation has seen five consecutive days of less than 100 new cases within a 24 hour period, according to statements. The latest development comes after the government extended its advisories of social distancing for two more weeks as of Sunday, canceling group events and recommending against religious activities and protests as well as delaying school classes nationwide.China Finds 78 New Asymptomatic Cases (8:41 a.m. HK)China reported 78 new cases of people who tested positive but showed no symptoms of the coronavirus, according to the National Health Commission.The country reported 39 additional cases for April 5, with all but one imported. Of the confirmed cases, five of them were earlier classified as asymptomatic. China has a total of 81,708 confirmed virus cases.Hubei province reported one new fatality, bringing the country’s total death toll to 3,331.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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After Trump Bans All N95 Mask Exports, Canadians Remind U.S. That They Helped Americans After 9/11

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(TORONTO) — The premier of a Canadian province that sheltered thousands of stranded American airline passengers after the 9/11 attacks questioned the humanity of U.S. President Donald Trump on Sunday after Trump banned the export of N95 protective masks to Canada.

The conservative leader of another province compared it to one family member feasting while letting another one starve. And yet another premier said it reminded him of 1939 and 1940, when Canada was part of the fight against global fascism while the United States sat out the first years.

Canadians across the country expressed hurt and disappointment that their neighbor and longstanding ally is blocking shipments of the masks from the United States to ensure they are available in the U.S. during the coronavirus pandemic. Canadian health care workers — like those in the U.S. — are in dire need of the masks that provide more protection against the virus that causes COVID-19.

Newfoundland Premier Dwight Ball said one of the great lessons in humanity is that in times of crisis you don’t stop being human.

“To say that I’m infuriated by the recent actions of President Trump of the United States is an understatement,” Ball said. “I cannot believe for a second that in a time of crisis that President Trump would even think about banning key medical supplies to Canada.”

Ball noted that in 2001, more than 6,600 passengers descended on Gander, Newfoundland, a town of 10,000 without warning as more than 200 flights were diverted to Canada following the attacks on the United States.

Flight crews filled Gander’s hotels, so passengers were taken to schools, fire stations, church halls. The Canadian military flew in 5,000 cots. Stores donated blankets, coffee machines, barbecue grills. Locals gave passengers food, clothes, showers, toys and banks of phones to call home free of charge.

“Newfoundland and Labrador will never give up on humanity. We will not hesitate for one second if we had to repeat what we did on 9-11. We would do it again,” Ball said.

“This is a time when we need to work together to continue to protect our residents and keep them safe from COVID-19 no mater where they live or what passport they hold.”

Former Gander Mayor Claude Elliott also said he’s disappointed.

“I understand the United States is going through a very dramatic time, especially in New York, and they need a lot of supplies, but we’re fighting an enemy that is just not one state, it’s the whole world,″ Elliott said. “And when we come to those times of tragedy in our life, we need everybody helping each other.″

Trump used his authority under the 1950 Defense Production Act to direct the government to acquire the “appropriate” number of N95 respirators from Minnesota-based 3M and its subsidiaries. He also asked it to stop exporting such masks, also known as respirators, though 3M issued a statement saying that could have “significant humanitarian implications” for healthcare workers in Canada and Latin America. The company said possible retaliation by other nations could actually lead to fewer of the masks being available in the U.S.

Ontario’s conservative Premier Doug Ford also expressed disappointment.

“It’s like one of your family members (says), ‘OK, you go starve and we’ll go feast on the rest of the meal.’ I’m just so disappointed right now,” Ford said Saturday. “We have a great relationship with the U.S. and they pull these shenanigans? Unacceptable.”

Alberta Premier Jason Kenney, also a conservative, recalled resentments from the start of World War II: “The United States sat out the first two or three years and actually initially refused to even provide supplies to Canada and the United Kingdom that was leading the fight at the time,” he said.

Prime Minister Justin Trudeau took a more diplomatic approach, saying Sunday he’s confident Canada will still be able to import N95 masks from the U.S. despite the export ban and said he will talk to Trump in the coming days.

Trudeau noted Canada supplies the U.S. with many supplies, including pulp for surgical-grade N95 masks, test kits and gloves. Canadian nurses also work in the U.S.

Trudeau earlier said Canada won’t bring retaliatory or punitive measures against the United States.

“I’m confident we are going to be able to solve this and I look forward to speaking with the president in the coming days,” Trudeau said.





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Virus Spurs Global Free-for-All Over $597 Billion Medical Trade

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(Bloomberg) — Germany’s Vice Chancellor Olaf Scholz has said the shared experience of battling the coronavirus could lead to a “new age of solidarity.”There’s little sign of the crisis bringing nations closer together, though: From India to Europe and the U.S., governments are rushing to get hold of masks, ventilators, gloves and medicines in a free-for-all that’s stoking tensions in a world already stung by globalization. Countries are rushing to introduce export restrictions, contributing to what the World Trade Organization calls a “severe shortage” of goods needed to fight the virus.“Understandably, governments are taking protective measures to stem the pandemic,” the WTO said in a report published on Friday. However, “some of these measures may inadvertently impact the flow of critical medical goods across territories.”The tussles show just how vulnerable the world trade in medical supplies is to unilateral action by individual nations, and how dependent developing countries are on the richer world for basic medical gear to fight an epidemic. That’s all happening in a climate of distrust as President Donald Trump pushes his America First agenda, which has seen him frequently criticize global institutions as well as longstanding U.S. allies like Germany and France.The wrangling also reflects the rising economic clout of Beijing and its entrenchment in global supply chains. China is either a provider of raw materials for medical equipment for many countries, or their main source of completed goods.As the policy focus shifts to public health, the lack of control over supply chains translates into political pressure on governments. In India, the main opposition Congress Party berated Prime Minister Narendra Modi’s government for allowing the export of testing kits until Saturday, calling it “the ultimate betrayal to India.”India also ran afoul of Trump at the weekend when it banned all exports of hydroxychloroquine, a malaria drug the U.S. president has repeatedly championed in the fight against Covid-19. Trump said on Saturday that he spoke to Indian Prime Minister Narendra Modi to appeal for the release of shipments the U.S. has already ordered, and that India is giving his request “serious consideration.”A major exporter of generic drugs, India had already restricted foreign sales of certain medicines and pharmaceutical ingredients in response to the coronavirus crisis. That’s raised concern in Europe.The Indian export ban has been repeatedly discussed by the European Union’s Integrated Political Crisis Response mechanism, a group of experts and senior diplomats in Brussels seeking to coordinate the bloc’s policy, according to internal documents seen by Bloomberg. The EU’s executive arm has been negotiating with the government in New Delhi to ease the restrictions.Export LimitsSo far this year there have been 91 export curbs implemented by 69 jurisdictions, the “overwhelming majority” enacted in March as the virus epicenter shifted to Europe and then the U.S., according to Simon Evenett, professor of international trade and economics at the University of St. Gallen in Switzerland.That is setting off international friction.Officials in Germany and France have clashed with Washington over what they say are American attempts to unfairly obtain safety equipment.The interior minister of Berlin city state, Andreas Geisel, blamed “the U.S.A.” for confiscating 200,000 masks ordered from a U.S. producer when they were in transit through Bangkok. “We view this as an act of modern piracy,” Geisel said.French officials accused unidentified Americans of paying over the odds to secure masks in China that had been earmarked for France. The U.S. Embassy in Paris rejected any suggestion the federal government had been involved in such actions as “completely false.”Also at the weekend, Spain accused Turkey of retaining a shipment of respirators bought by two regional Spanish governments from a Turkish company.The Berlin official backed off his account on Saturday, saying on Twitter that the masks were ordered from a German company and why they didn’t reach Germany is being reviewed.The crunch affects critical medical equipment worth about $597 billion in 2019, according to the WTO. The issue arises because not all countries produce the necessary goods, from hand soaps and sanitizers to syringes and protective glasses. One example: China, Germany and the U.S. export 40% of the world’s personal protective products. China, meanwhile, is the world’s biggest exporter of face masks, with a 25% share.Joint ProcurementIn a bid to ease the flow of imports, the European Commission on Friday waived tariffs and value-added tax on such medical gear until end-July. That reduces the price of masks in Italy by a third, said Commission President Ursula von der Leyen. “We stand by our health workers and hospitals and we will do all we can to help them further,” she said in a video message.The commission has sought to begin joint procurement for various medical supplies while ramping up production of in Europe. Von der Leyen and Thierry Breton, the EU official responsible for the bloc’s internal market, held talks with industry representatives recently and concluded that boosting output under existing capacity was more feasible than retooling other manufacturing at the likes of auto and aerospace companies.By contrast the U.S., the world’s largest importer of medical products for the last three years, has turned to carmakers such as General Motors to produce ventilators during the crisis.Trump, who has equated himself to a “wartime president” as virus cases spiked in the U.S., said on Friday that he’d invoked the Defense Production Act to ban the export of crucial medical supplies, including high-functioning respirators, surgical masks, gloves and other personal protection equipment. That flies in the face of a recent call by Group of 20 leaders to work together against Covid-19.“We need these items immediately for domestic use, we have to have them,” Trump said.In a March 26 statement following a special video conference, G-20 leaders including Trump vowed to “work to ensure the flow of vital medical supplies, critical agricultural products, and other goods and services across borders.”Canada’s Prime Minister Justin Trudeau said Saturday he will speak to Trump in the coming days to point out that Canada also sends key equipment across the border.The race for medical supplies marks a return to geopolitical tensions just months after the U.S. and China reached an initial deal to stave off a global trade war. At root, the political conflict over sourcing the equipment is an extension of trade policy.“Governments have not aligned their trade and medical policy responses to coronavirus,” Evenett of St. Gallen said in a March report. That incoherence, he said, “threatens the lives of people at home and abroad, including those of front line professionals.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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