admin
Businesswoman looking at stock exchange market display screen board in downtown financial district.
Asian markets rose Wednesday on signs US lawmakers are edging towards agreeing a new stimulus for the struggling economy, while hopes for a vaccine helped temper worries about surging virus infections around the world.
After months of stuttering talks, and with a deadline approaching, Democrats and the White House said they were closing the gap on their proposals, with House Speaker Nancy Pelosi saying legislation was being drawn up.
The comments fanned optimism for a much-needed spending boost for Americans and US businesses, just as a fresh wave of coronavirus hits the country and threatens to trigger the reimposition of economically painful containment measures.
However, while Pelosi said she was hopeful a bill could be passed before the November 3 election, she warned it must go through legislative steps.
“I am optimistic,” she said, but “legislation is tough”.
The White House has upped its offer by $80 billion to $1.88 trillion, which is still short of the Democrats’ $2.2 trillion plan, but Donald Trump has said he is willing to go even higher.
Senate Majority Leader Mitch McConnell – who has rejected massive spending packages – changed course and said he would bring the package to a vote if there is a bill Trump supports.
But he would still have to win round other fiscally conservative Republicans, which could prove a tough task.
“It’s very unlikely that a number of that level would make it through the Senate, and I don’t support something of that level,” Senator Mitt Romney told reporters, referring to the $1.8 trillion plan.
Virus flare-ups
However, Axi strategist Stephen Innes said in a note: “Provided both parties are talking, if there is a will, there is a way as the political calculus allows for a pre-election deal. After all, what politician wants to be painted as voting for unemployment.”
Markets remain upbeat even if nothing is passed before November 3, with traders broadly expecting a new package to be passed at some point, whoever wins the election.
And with Joe Biden well ahead in polls – while Democrats could possibly win both houses of Congress – there is speculation an even bigger deal could be pushed.
All three main Wall Street indexes ended well up, and most of Asia followed suit.
Hong Kong rose more than one percent, with local carrier Cathay Pacific surging more than three percent after announcing it would make huge job cuts and shut down one of its airlines.
Tokyo rose 0.3 percent with Sydney, Singapore, Seoul and Taipei all in positive territory. Mumbai jumped one percent and Manila rallied 2.7% as strict curfew measures were eased in the Philippine capital.
But Shanghai dipped after recent gains, while there were also losses in Wellington and Jakarta.
London was flat at the open, while Paris and Frankfurt edged up.
Vaccine hopes were given a lift after Moderna said its jab could be given approval for emergency use as early as December, while a report said AstraZeneca is expected to be allowed to restart trials in the US after being suspended worldwide in September when a volunteer fell ill.
The firm has already revived tests in Britain and elsewhere after being given permission.
The news comes as the disease sees frightening new flare-ups across the United States and in Europe, where numerous countries have been forced to introduce targeted lockdowns that have fanned fears for business survival and warnings of a possible double-dip recession.
China extends economic recovery lead quarter by quarter – Xinhua
by Xinhua writers Liu Yinglun and Zhou Qianxian
BEIJING, Oct. 21 (Xinhua) — China has embraced its best quarterly economic performance of the year in the third quarter (Q3), rendering a 0.7-percent year-on-year expansion for the first nine months as the first major economy to return to growth following the economic fallout of COVID-19.
This marks a striking rebound from a 6.8-percent contraction in the first quarter when the virus took its drastic toll. With the outbreak gradually under control, the economy clawed back growth and notched a 3.2-percent growth in Q2. The third quarter saw a 4.9 percent year-on-year growth.
“Seen from the trends of the key indicators, China’s epidemic prevention and economic recovery are at the world’s forefront, which shows the strong resilience and vitality of the economy,” Liu Aihua, spokesperson of the National Bureau of Statistics (NBS), told a Monday press conference on third-quarter data.
DECISIVE EPIDEMIC CONTROL
Reflecting upon China’s economic rebound trajectory, it is difficult not to recognize the significance of epidemic control efforts.
Ever since the onset of the COVID-19 outbreak, China has spared no time in saving lives and developed an approach characterized by mass testing, thorough contact tracing, and strict lockdowns, which later brought the epidemic under control.
The containment of a recent hospital cluster in east China’s city of Qingdao, once again, attested to how China’s approach is effective. Over 10 million people were tested within five days, an undertaking unseen worldwide, and the “patient zeros” were traced within the same period, ruling out risks of community transmission.
“China received a total of 637 million visits during the eight-day National Day holiday ending Oct. 8, which demonstrated that the virus has been kept in check,” said Zhong Nanshan, a renowned respiratory disease expert at the opening of the 2020 World Young Scientist Summit on Sunday.
POTENT ECONOMIC MEASURES
With the same dedication and resolve it put into saving people’s lives, China has worked to cushion market entities and individuals against COVID-19 blows since the early stages of the epidemic, cranking up credit support, slashing fees, and expanding investment.
Official data showed the country’s tax and fee cuts totaled 1.88 trillion yuan (about 280.9 billion U.S. dollars) in the first eight months of the year, benefitting businesses nationwide; from fast fashion boutiques to circuit board manufacturers.
To deliver much-needed liquidity for firms, especially smaller ones, China has come up with solutions, like devising new credit instruments and using tax-paying records to back loans, so that even hog breeders in the agriculture-intensive municipality of Chongqing could receive loans to tide over difficulties.
While employment was affected by the epidemic during the first several months of the year, China has outlined multi-pronged measures to support the resumption of work, facilitate recruitment of key groups, and revive labor demands by encouraging new forms of businesses.
On top of shoring up the economy against COVID-19 headwinds, China has sought to enhance inherent strength for the long haul as companies embraced digital transformation, investment flowed into new infrastructure, and calls for greener growth amplified.
The country’s pledge to install in every county a medical waste disposal system will likely nurture an industry of 11 billion yuan by 2023, and construction of new infrastructures like 5G, AI, and cloud computing could spawn new drivers of domestic demand and attract foreign investment.
Hailing China’s growth as “a positive impulse for the world economy,” Managing Director Kristalina Georgieva of the International Monetary Fund (IMF) said China’s growth is also important for countries that are connected to the Chinese economy through global value chains, as demand from China is an engine for growth there.
Official data showed that foreign direct investment (FDI) into the Chinese mainland, in actual use, expanded by 25.1 percent year on year to 99.03 billion yuan in September, the sixth consecutive month for the country to witness positive growth in FDI.
A bevy of leading global firms, like lift equipment manufacturer JLG, Uniqlo, and Nestle, have announced or made new investments in China this year. Many others reported robust earnings in the country compared with other regions.
“We are confident in the long term prospect of the Chinese market and will continue to invest in the country,” BMW China chief Jochen Goller said.
Challenges remain for China to sustain the growth momentum. NBS’s Liu cautioned that the foundation for sustainable recovery requires further consolidation due to global uncertainties and uneven performances at home.
Yet with the virus now largely under control in China, consumers have streamed back into restaurants and malls, hopped on flights and trains, and packed movie theaters and tourist districts. The Chinese economy is getting increasingly closer to pre-COVID-19 levels.
The IMF projected China’s economy to grow by 1.9 percent in 2020 in its latest World Economic Outlook report, with the global economy expected to post a 4.4-percent decline.
“Overall, China has the foundation, conditions and confidence to maintain the current trend in Q4 and the full year,” Liu said. Enditem
Bongani Ndlovu