In this file:
· Coronavirus outbreak will speed up US-China ‘decoupling’ more than the trade war, Milken Institute analyst says
· Coronavirus disrupts China meat imports, food supply during pork shortage
· China plans to restructure meat supply system after triple health scares sparked by animal virus: Jefferies
Coronavirus outbreak will speed up US-China ‘decoupling’ more than the trade war, Milken Institute analyst says
o Talk of the risk of the world’s two major powers “decoupling” surfaced as their trade battle, which began in 2018, heated up — leading to billions of dollars of tariffs imposed on each other’s goods.
o In the arena of technology, ties between the countries also steadily worsened, and China was said to start efforts to wean itself off U.S. tech.
o “We talked about China and the U.S. decoupling. The coronavirus more than the trade war has sped some of that decoupling as countries, as businesses think about their supply chain for the long run,” said Curtis Chin, an Asia fellow at the Milken Institute.
o “It can’t all be in China, we’ve seen some of the consequences of over reliance on just one key market,” he added.
Weizhen Tan, CNBC
Feb 11 2020
The ongoing coronavirus outbreak is speeding up the so-called “decoupling” between the U.S. and China more than their trade war did, according to an analyst from the Milken Institute.
“We talked about China and the U.S. decoupling. The coronavirus more than the trade war has sped some of that decoupling as countries, as businesses think about their supply chain for the long run,” said Curtis Chin, an Asia fellow at the Milken Institute, calling it an “increased disengagement” of both economies.
“It can’t all be in China, we’ve seen some of the consequences of over reliance on just one key market,” he told CNBC at the Milken Institute’s Middle East and Africa Summit in Abu Dhabi on Tuesday.
Talk of the risk of the world’s two major powers “decoupling” surfaced as their trade battle, which began in 2018, heated up — leading to billions of dollars of tariffs imposed on each other’s goods. Sticky issues also included the U.S. accusing China of intellectual property theft and forced technology transfer.
Last year, the White House reportedly considered some curbs on U.S. investments in China such as delisting Chinese stocks in the U.S. In the arena of technology, ties between the countries also steadily worsened, and China was said to start efforts to wean itself off U.S. tech.
Chin said: “The reality is that the US and Chinese economies, from supply chains to investment and trade flows, will be intertwined for years to come. The coronavirus crisis, however, has underscored to the United States and all of China’s trading and investment partners the value of diversification away from China.”
Nomura in a note on Tuesday flagged China’s deep integration with the global economy — the Asian giant contributed to 12% of global trade last year. The supply chains of many companies, including U.S. businesses, are heavily dependent on manufacturing in China.
The U.S.-China trade war and its tariffs have hit some Asian economies as companies to scrambled to avoid duties, diverting trade flows. But there have also been winners.
The outbreak, which began in Wuhan, China, has once again upended supply chains, as Chinese cities go into lockdown, restricting transportation and shuttering factories for longer than originally planned.
For instance, many automakers have been temporarily forced to shut down their plants in China due to the containment efforts to curb the outbreak. Apple’s biggest supplier Foxconn, has reportedly not yet fully resumed production at its factories in China as well, and analysts predicted a cut in iPhone shipment forecasts.
U.S. Secretary of Commerce Wilbur Ross even said that the deadly outbreak in China could be good for America. He said that it would lead businesses to reconsider their supply chains — and return jobs and manufacturing to the U.S...
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Coronavirus disrupts China meat imports, food supply during pork shortage
An outbreak of African swine fever, which infects only pigs, has decimated China's herd, pushing Chinese pork prices to record highs and increasing the need for meat imports.
By Karl Plume & Tom Polansek, Reuters
via The Western Producer (Canada) -February 12, 2020
CHICAGO, (Reuters) – Coronavirus is disrupting meat shipments to China as the country faces a shortage due to an outbreak of a fatal pig disease, Tyson Foods Inc and U.S. agricultural groups said last week.
An outbreak of African swine fever, which infects only pigs, has decimated China’s herd, pushing Chinese pork prices to record highs and increasing the need for meat imports.
However, coronavirus – which has killed 563 people so far – is keeping consumers and workers at home in China, delaying purchases at stores and restaurants and slowing the unloading of products at ports.
The disruption exasperates Beijing’s efforts to ensure adequate meat supplies and the plans of global companies like Tyson and JBS SA to profit from the shortage. The dual disease outbreaks also highlight the problems facing import-dependant China in its efforts to feed its population.
“There’s been disruptions at the ports,” Tyson Chief Executive Noel White said on a call with analysts. “That has skewed shipments, receivals.”
China has increased meat imports from the United States, Europe and Brazil as African swine fever has killed up to half its pigs since August 2018.
Beijing pledged to increase purchases of U.S. farm goods in an initial trade deal last month, raising traders’ expectations for more pork shipments. China also eased restrictions on U.S. beef imports and in November lifted a ban on U.S. poultry meat shipments.
But coronavirus has clouded the outlook for Chinese demand, White said, as cities have been quarantined. He said Tyson is still shipping meat to China and has orders on its books.
“Once we get past the coronavirus incident, whenever that might be, I do think there is going to be very strong demand,” he said.
Meat is shipped to China in refrigerated containers that must be plugged into electrical outlets once they are offloaded to keep products cold.
Importing companies normally...
China plans to restructure meat supply system after triple health scares sparked by animal virus: Jefferies
· China is said to be preparing to restructure meat production and distribution system after latest coronavirus crisis
· Move to benefit large state-owned meat importers and a catalyst to producers of plant-based meat substitutes
Ryan Swift, South China Morning Post
13 Feb, 2020
China is likely to restructure its meat production and distribution system by doing away with smaller producers in favour of large-scale animal farming once the coronavirus outbreak recedes, according to analysts at Jefferies. Producers of plant-based meat substitutes could benefit too, it said.
The government is approaching some meat importers and offering them the opportunity to set up state-of-the-art meat and animal processing factories on the mainland, the analysts said in the February 10 report, citing sources. It is also bringing in specialists in setting up meat processing production lines to advise on international best practices for food safety, the report added.
“We expect that in the wake of recent issues, the government will make further announcements ending, once and for all, the practice of butchering animals in cities/markets,” its Hong Kong-based analysts wrote. This will put protein production “in the hands of large corporations and SOEs.”
The thinking follows a series of health scares that have plagued the nation’s meat supply and security, with the latest coronavirus epidemic adding to recent outbreaks of African Swine Fever and Avian flu. Five Chinese provinces have temporarily closed live poultry trading and slaughtering locations, according to Jefferies, while the swine fever has forced the government to cull most of its hog herd in 2019, stoking inflation.
“We believe that the current senior party officials do not want this to be seen as their legacy,” according to the Jefferies report.
Jefferies said large corporations and state-owned enterprises such as WH Group, Wens, Muyuan and COFCO, would be the chief beneficiaries of the plan. The shift is also likely to quicken the acceptance of plant-based protein, Jefferies said. That has a big implication for Hong Kong, which imported all of its fresh pork and 94 per cent of its fresh beef from mainland China.
“The pace is going to accelerate with these unfortunate situations,” said Christian Cadeo, Singapore-based managing partner of Big Idea Ventures, which focuses on alternative-protein investments. “Eventually, with enough shocks of this magnitude, consumers will just say enough, and switch over.”
People will become much more conscious about what they consume, said David Yeung, founder of Hong Kong-based Green Common, which sells plant-based meat products in Hong Kong and China. “I can say with confidence that demand for healthy food will skyrocket in China as awareness on food safety must be at a whole new level.”
The conversion may take time...