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News roundup

  • Hundreds of foreign nationals were being evacuated from Wuhan, the epicentre of a coronavirus outbreak that has infected 9,000 and claimed 213 lives in China as of Thursday. Major airlines worldwide including British Airways cancelled flights to mainland China as the World Health Organisation finally declared the coronavirus to be a global health emergency.
  • The Chinese government extended the nationwide Chinese New Year holidays by three days in order to contain the ongoing coronavirus outbreak. That meant the A-share market will only reopen for trading on February 3. The selling pressure notably shifted to Hong Kong which carries a heavy weighting of Chinese stocks. The key Hang Seng Index started the first two trading days of the Year of the Rat down nearly 1,500 points, or 5.3%.
  • The Chinese New Year holidays will be even longer in major industrial provinces such as Guangdong and Zhejiang, with a number of local governments extending the break for an extra week. That means millions of migrant workers have no need to rush back to the production lines until February 10.
  • One of the major factories being affected is Tesla’s Gigafactory in Shanghai. The company said that the production of its Model 3 will be delayed for a week and a half. Yet buoyed by the prospect of higher sales in the China market, Tesla’s share price has gained nearly 40% so far this year, taking its market value over the $100 billion mark for the first time (see this week's "Auto Industry").
  • The much-anticipated comedy Lost in Russia became the only blockbuster to debut during the Chinese New Year after its main producer Huanxi Media decided to offer the movie online for free. The bold decision saw Lost in Russia shown on Bytedance’s popular social media platforms including Douyin and Toutiao. Huanxi will receive a one-time fee of around $100 million plus add-ons based on an advertising income split. However, Huanxi has also come under heavy fire from counterparts for circumventing the spirit of a joint agreement made in the wake of the Wuhan coronavirus’ spread, which saw Chinese studios pull all their new releases ahead of the lucrative Spring Festival window.
  • The European Union published new guidelines directing its member states to take steps to ensure their 5G network security, but stopped well short of the outright ban on Chinese telecom major Huawei demanded by Washington. The decision came just a day after the UK said it would allow Huawei limited access in its 5G networks’ buildout (see this week's "Talking Point")
  • The White House has moved to ban former national security adviser John Bolton’s new book from publication given the manuscript in its current form appeared to contain “a significant amount of classified information”. According to the New York Times, Bolton wrote in his book about his concerns that US President Donald Trump had effectively granted a personal favour to Chinese leader Xi Jinping when deciding to lift sanctions on Chinese state firm ZTE in 2018.
  • Rmb3 million The fine slapped on a drug store in Beijing for hiking the price of 3M brand face masks by nearly six times the online price to Rmb850 ($121) per box, says the Beijing government, which has investigated 31 cases of price violations since January 23 amid the Wuhan coronavirus outbreak.
  • Rmb15 billion The value of digital hongbao that Chinese internet companies have pledged to distribute during the Chinese New Year this year, according to Caixin. Pinduoduo is one of the biggest spenders, burning over Rmb4 billion, while video platform Douyin plans to dole out Rmb2 billion.
  • $4.7 billion China’s investment in Indonesia last year, doubling the amount for 2018, pointed out Xinhua. Backing 2,130 projects in Indonesia, China displaced Japan as the second largest investor in the Southeast Asian country.
  • Rmb4 billion Huayi Brothers’ estimated net loss in 2019, which widened from Rmb1.09 billion ($160 million) a year ago. The accumulated loss effectively wipes out all of the studio’s net profits in the last decade. The film producer will be delisted from the Shenzhen bourse should its losing streak extend through 2020.

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