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  • The Centre of Expertise on Trade,
    Investment and Public Policy

    The Week in Asia

    Published On: 24 April 2020

    Asia House Advisory takes a look at the top developments in Asia this week affecting trade, investment and public policy.

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    Facebook signs landmark deal with Indian mega-company Reliance Industries

    Facebook this week announced a landmark deal with telecom business Jio, a part of mega-company Reliance Industries. Facebook will invest US$5.7 billion for a close to 10 per cent stake in Jio, which has 388 million users. The deal had been delayed by global lockdowns and travel restrictions due to the COVID-19 pandemic. This will mark Facebook’s largest-ever investment (outside of acquisitions) – but many view it as the company’s best bet to finding success in the Indian market. The partnership will initially be in e-commerce and payments, using WhatsApp’s 400 million user base in India to link consumers with local grocers through Jio’s platform. Partnering with a local company will also help Facebook navigate the complex regulatory landscape foreign firms face in entering and operating in the Indian market.

    Alibaba invests US$28 billion in cloud computing

    Alibaba is increasing its focus on cloud computing, with a US$28 billion three-year investment plan. This comes as the COVID-19 pandemic fuels demand for internet infrastructure and technologies that enable cloud computing globally. Alibaba will use the investment to build next-generation data centres and develop related technologies such as semiconductors and servers. The investment marks a significant increase in the company’s expenditures on such technology, as it builds capacity to gain control of the Chinese market. In Q4 2019, Alibaba held a 46 per cent market share. The pandemic has put stress on both the company and the Chinese economy, but has also driven the company to focus more on building out its digital economy capabilities.

    Gojek acquires payments startup

    Indonesian ride-hailing and food-delivery unicorn Gojek has acquire Moka for US$130 million. Moka is a mobile point-of-sale start up, and the deal has been under negotiations since last year. Gojek is using its recent fundraising round to cement its position in Indonesia’s digital payments industry, particularly as the COVID-19 pandemic is accelerating a shift away from cash in the country. Moka is present in more than 100 cities across Indonesia and currently provides point-of-sale and payments services to owners of more than 35,000 stores and restaurants. Gojek last month raised US$1.2 billion for expansion, despite turbulence in the tech sector amid the pandemic, and is aiming to cement its place in the region’s payments industry.

    BHP and Rio Tinto see rebound in Chinese steel sector

    Both BHP and Rio Tinto have seen a rebound in demand in China’s steel sector. In a review published this week, BHP notes that it expects steel production in China to increase slightly this year, if a second wave of COVID-19 infections is avoided. Industrial activity is already improving in China, supported by various credit and fiscal policies. Rio Tinto has similarly noted signs of China’s economy restarting and an increase in demand for raw materials. China is currently the world’s largest producer of steel, producing around 1 billion tonnes last year, and the largest consumer of iron ore from which steel is made. The resilience of the country’s steel industry has surprised many in the face of the economic downturn from the COVID-19 pandemic, but there is likely to be a contraction in steel production outside of China. Weak demand in China has raised fears however of a build-up of steel inventories that could take months to digest, leading to an unbalanced market for the commodity.

    Japan’s megabanks commit to stop financing new coal power projects

    Japan’s megabanks, including Mizuho Financial Group and Sumitomo Mitsui Financial Group (SMBC), have announced commitments of varying degrees to stop financing new coal power projects. This comes as Japan’s big banks face global criticism for being the world’s top financiers of new coal plants. Since January 2017, Mizuho, SMBC, and Mitsubishi UFJ Financial Group have accounted for 32 per cent of direct lending to coal power plant developers. These banks have increasingly been the target of international criticism following a report released at November’s UN Climate Change Conference in Spain. The country’s three biggest banks are now committed to begin ‘decarbonising’ as a result, a move being mirrored in other advanced economies’ financial services companies.


    Next session of Standing Committee of the 13th NPC: The next session of the Standing Committee of the 13th National People’s Congress (NPC) will be in held in Beijing next week from 26 to 29 April. This signals the first steps towards recovery following widespread lockdowns in the country due to the COVID-19 pandemic.

    CKGSB Business Condition Index (BCI): The April edition of the influential BCI – a key indicator of Chinese executives’ sentiment on China’s macroeconomic environment – is released next week. This month’s BCI is of particular note, as it follows news of the first Q1 GDP contraction in China since current records began. Asia House is hosting a webinar with CKGSB exploring COVID-19’s impact on the Chinese economy. Find out more.


    As countries move into second, third, and fourth weeks of full national lockdowns, governments are in some cases expressing cautious optimism that such policies are working as the number of new infections begins to plateau. Countries like, South Korea, China, Australia, and New Zealand are starting discussions on easing lockdown restrictions in the coming weeks.

    The economic impact of the pandemic and its resulting restrictions on movement continues to rise. India as a result has allowed the resumption of key economic activities, though the wider population continues to remain under strict lockdown measures. Indonesia has issued over 11,000 licenses for companies in the chemical, pharmaceutical, and textiles industries to resume operations, with the country’s industry minister stating that “there is no choice but to keep the economic engine running.” Countries in the region are beginning to feel the pinch as more economic stimuli are needed to support the economy during the ongoing lockdown measures.

    These COVID-19 insights are taken from Asia House Advisory’s focused monitoring service, one of the ways in which Asia House is providing analysis on economic and public health policy measures being taken by government across Asia and the Middle East. Please reach out to Ed Ratcliffe, Head of Advisory, at for further details on this and our other advisory services.

    Asia House Advisory helps organisations understand new operating environments and meet business-critical challenges. Find out more.




    China’s Q1 GDP contracts for the first time since 1992

    China released its Q1 growth figures today, recording a 6.8 per cent contraction in GDP so far this year. This is the first such contraction since Beijing began reporting quarterly GDP figures in 1992, and reflects the huge hit the country has taken from the COVID-19 outbreak. According to World Bank modelling, China may see growth fall to two per cent this year, from six per cent last year. If the state of the global economy continues to deteriorate, China’s growth this year could be as low as 0.1 per cent. Companies are however starting to resume operations in China, as lockdown measures implemented to contain the virus begin to be lifted, but there is likely to be lower demand as the rest of the world continues to keep containment measures in place. The contraction in China’s growth figures may be a sign of how difficult it will be for economies to restart growth after the pandemic.

    Asia House is convening several events exploring the ecomic impact of COVID-19 on China’s economy, including an online discussion with the Chinese Ambassador to the UK and Lord Green, Chairman of Asia House; a webinar with CKGSB; and a briefing with Zhu Guangyao, former Vice Minister of Finance, China.

    Moon’s Democratic Party wins landslide in South Korea 

    South Korea went to the polls on Wednesday, becoming one of the first countries to hold large-scale legislative elections during the COVID-19 pandemic. The country voted for its 300-seat National Assembly in a vote that was widely viewed as a referendum on President Moon Jae-in’s government. The election has handed Moon’s Democratic Party a landslide victory, and its first majority in 16 years. This has strengthened his mandate for the remainder of his term and puts the party in a good place ahead of presidential elections. However, the government’s increase in approval ratings largely stems from South Korea’s effective response in containing COVID-19, rather than on this administration’s economic record, which will likely still be the critical test for Moon’s re-election prospects.

    Facebook in talks with Indonesian e-payment companies

    Facebook is in discussions with major Indonesian digital payments players. The Indonesian e-payment business and market is expected to see nine-fold growth in the next five years, and could become a lucrative market for companies operating in the country. Indonesia’s payments market was estimated to be worth US$10.4 billion in 2019, and may grow to US$95.2 billion by 2025, according to recent Goldman Sachs reports. Following the announcement of its payment platform in 2019, Facebook has stated that it is looking to grow its digital payments business worldwide. Facebook’s potential entry into this market in Indonesia may also have tax implications, particularly as the government has been looking for ways to tax revenue for business generated in Indonesia by foreign companies.

    SoftBank warns of historic loss from Vision Fund hit

    SoftBank has warned of a US$12.5 billion annual operating loss. This comes as its Vision Fund, a US$100 billion investment fund, sustained heavy losses due to market volatility from the COVID-19 outbreak. These declines are exacerbated by a further loss on key investments in the group, including at WeWork and OneWeb, a satellite internet start up that filed for bankruptcy last month. The largely global lockdowns have had a severe and negative impact on many of the company’s key groups in its portfolio, including Uber and Oyo. SoftBank’s stock price plunged to a four-year low in March, prompting emergency meetings in which senior executives considered taking the company private, before choosing to launch plans for a US$41 billion asset sale to ease pressure. The company has seen operating losses over the last year, signalling that the current market downturn has highlighted investor attention on the group’s liabilities.

    Iran launches its biggest-ever IPO to boost government income

    Iran launched its biggest-ever IPO this week, selling a 10 per cent share of Shasta, its wealthiest state-run holding company. The move sought to generate funds for the government as it struggles with the economic impact of both the COVID-19 pandemic and continuing US sanctions. Shasta is the investment arm of Iran’s Social Security Organisation, which is the country’s leading pension fund. The holding company’s interest runs from petrochemicals and cement to finance and shipping. Shares were largely bought by retail investors, generating US$440 million. President Hassan Rouhani has urged other ministries and the armed forces to sell shares of their major holding companies as well, to relieve budget pressure on the central government.

    HNA Group’s liquidity problems worsen

    Chinese-owned airline-to-insurance business HNA Group this week announced its financial troubles were worsening. Just three years ago, HNA was China’s largest buyer of overseas assets, buying up more than US$40 billion in global assets, including large stakes in Hilton Worldwide and Deutsche Bank. In a letter published on Thursday, the group criticised its finance department for its handling of an investor meeting which led to a suspension of trading of a bond issued by HNA. This came after HNA called a last-minute meeting on Tuesday to tell investors of its intention to delay both principal and interest payments for a year for a bond issued in 2013. This week’s actions have highlighted the group’s growing credit problems, which have been compounded by the economic volatility stemming from the COVID-19 pandemic.


    China to launch national blockchain platform: The Chinese government is set to launch its national blockchain platform, the Blockchain-based Service Network, on 25 April. The initiative is aiming to help companies deploy blockchain applications faster and more cheaply, by helping to create a public infrastructure network.

    India to resume some economic activity: Though the government has extended its nationwide lockdown through 3 May, some industries will be allowed to resume operations from 20 April to mitigate the economic impact on the national economy. Agricultural activities and construction will be allowed to resume, among other key industries.


    This week, the IMF has forecast that growth in Asia will stall at zero per cent in 2020. Changyong Rhee, the Director of the Asia and Pacific Department, sees huge uncertainty about 2020 growth prospects and even more uncertainty about the 2021 outlook.

    Countries across the region have in many cases extended or widened national lockdowns in a bid to contain the spread of the virus. Indonesia has widened its partial lockdown to encompass 34 million people, mostly in the greater Jakarta area. The Philippines, Vietnam, and India have all extended lockdown periods, though in many cases have allowed the resumption of activity in key industries such as agriculture and manufacturing to mitigate the economic impacts of the lockdowns. However, some countries in the region are starting to see tentative results of widespread lockdowns, with Malaysia reporting its lowest daily number of cases for the first time since implementing its movement control order.

    As the economic impact of the pandemic continues to increase, governments are looking at ways to boost the economy and support relief measures for people affected by the downturn. Some countries are struggling to fulfil commitments in relief packages. Thai Prime Minister Prayut Chan-o-cha announced this week that the government may only be able to pay one month of the promised three-month cash relief package due to funding issues. Other governments are looking to sell government bonds and launch IPOs to increase funds for relief measures.

    These COVID-19 insights are taken from Asia House Advisory’s focused monitoring service, one of the ways in which Asia House is providing analysis on economic and public health policy measures being taken by governments across Asia and the Middle East. Please reach out to Ed Ratcliffe, Head of Advisory, at for further details on this and our other advisory services.

    Asia House Advisory helps organisations understand new operating environments and meet business-critical challenges. Find out more.


    THURSDAY 9 APRIL [This week’s edition is published on Thursday ahead of Good Friday]


    China Mobile chooses Huawei and ZTE to build 5G network

    China Mobile, the country’s largest state-owned mobile carrier, has chosen Huawei and ZTE to build out its 5G mobile network. The US$5.2 billion contract will cover more than 200,000 base stations – the majority of the target buildout for 2020. Beijing has encouraged foreign companies to bid for participation in the buildout of the country’s 5G network – with both Ericsson and Nokia entering bids. China Mobile has turned largely to two domestic companies – Huawei and ZTE.  Swedish telecoms group Ericsson was the only foreign company granted a tender of 11.5 per cent of this year’s target buildout. Though Huawei has been awarded 91 contracts to build 5G networks globally, the company is still largely dependent on its home market for revenue. The building out of 5G networks globally has become a controversial political issue and has been a key point in the growing tensions between China and the US, among other countries, in the last year.

    Indonesia sells Asia’s first 50-year bond to fight COVID-19

    Indonesia has raised US$4.3 billion through the issuance of a 50-year bond to fight the COVID-19 pandemic. This is the longest-dated dollar bond now in Asia. Finalised on Monday and sold in maturities of 10.5 and 30.5 years, it is also Indonesia’s largest-ever bond. The funds will be used to support COVID-19 relief and recovery efforts. The proceeds will also help increase foreign reserve exchanges at Bank Indonesia, which saw a drop of US$9.4 billion in March, as part of the central bank’s efforts to defend the rupiah. The government is also considering a sale of around US$27 billion of ‘pandemic bonds’ to support additional spending for the COVID-19 response.

    Singapore to close airport terminal for 18 months in response to downturn in demand

    Singapore’s Changi Airport will suspend operations in its Terminal 2 for 18 months from 1 May, as the COVID-19 pandemic continues to exert downward pressure on the aviation sector. Airlines currently operating out of Terminal 2 will be relocated to the airport’s other terminals. The move will allow Changi Airport Group to save on running costs during this time. With the majority of flights globally suspended, the move has been mirrored by airports both in the region and worldwide – and reflects concerns that a full recovery in the sector will take time.

    JP Morgan to take full control of China fund venture

    JP Morgan will reportedly spend close to US$1 billion to buy out the minority partner in its Chinese joint venture, China International Fund Management. The move comes after government reforms last week eliminated caps on foreign companies taking full control of local asset management operations. China has the world’s third-largest asset management market, behind the US and the UK. The local market is set to grow by US$9 trillion by 2023, and in recent months Beijing has moved to allow greater foreign participation in its financial sector. BlackRock has similarly recently applied to set up a mutual fund business in China in the face of the lifting of regulations on foreign company participation.

    India lifts restrictions on 24 drug exports

    India has lifted restrictions on the export of 24 pharmaceutical ingredients and drugs following the imposition of restrictions last month due to disruptions to supply chains from the COVID-19 pandemic. India is the world’s largest supplier of generic drugs. The restrictions had covered around 10 per cent of all of the country’s pharmaceutical exports, including several antibiotics and paracetamol. The country is expecting demand for the drugs covered under the new measures to double. The move comes after international pressure on the government to lift the export restrictions, particularly given the rapid spread of the pandemic.

    South Korea to hold parliamentary elections on 15 April: South Korea will go ahead with its parliamentary election next week as scheduled, with special measures in place to contain the spread of COVID-19 as voters head to the polls. The elections will determine the 300 members of the National Assembly and are likely to give a boost to President Moon Jae-in and his governing party.

    ADB and AIIB to boost support for governments to combat COVID-19: Both the Asian Development Bank and Asian Infrastructure Investment Bank are planning to boost support to countries and governments in the region to battle the pandemic. More than 20 countries have already reached out to the organisations for assistance.




    Both the APAC and MENA regions have seen increases in the number of confirmed cases this week. Public health measures have been tightened, with many governments such as Malaysia, India, and the Philippines considering extending lockdown measures to contain further spread of the virus. With more than one fifth of the world’s population now under lockdown measures, economic stimulus packages to boost national economies are becoming more critical. This week Malaysia committed an additional US$2.3 billion and Singapore announced an addition US$3.6 billion to support businesses, particularly SMEs.

    In China, transport restrictions in Wuhan were lifted this week, with residents once again able to travel out of the city after months of lockdown. Globally however, governments are remaining cautious of a ‘second wave’ of infections.

    These insights are taken from Asia House Advisory’s COVID-19 monitoring service, one of the ways in which Asia House is providing analysis on economic and public health policy measures being taken by governments across Asia and the Middle East. Please reach out to Ed Ratcliffe, Head of Advisory, at for further details on this and our other advisory services.

    Asia House Advisory helps organisations understand new operating environments and meet business-critical challenges. Find out more.


    FRIDAY 3 APRIL 2020

    Goldman Sachs and Morgan Stanley approved to take control of Chinese ventures

    In a signal that China could be making good on its promises to open up its financial markets, Chinese regulators this week gave Goldman Sachs and Morgan Stanley permission to take majority control of their local securities joint ventures in the country. The two banks will be allowed to increase their holdings in existing securities companies to 51 per cent. Morgan Stanley currently holds a 49 per cent stake in its joint venture, and Goldman Sachs 33 per cent in its. This decision comes after financial services companies have spent decades trying to move further into the Chinese market. Foreign banks will be allowed to apply for 100 per cent ownership starting from this month.

    COVID-19 pandemic could speed up iPhone producers’ move to exit China

    Wistron Corp., one of Apple’s manufacturing partners, has said half of its capacity could move out of China by the end of 2020. The statement highlights growing concerns for many companies about the concentration of supply chains in a single country. Though these concerns have been mounting due to political uncertainty and the US-China trade war over the last few years, the COVID-19 pandemic may be accelerating such decisions. The move by key companies such as Wistron and other Apple partners to shift supply chains could reshape technology supply chains globally. Many are now considering other alternatives – such as India, Vietnam, Taiwan, and Mexico.

    Indonesia introduces regulation to tax new tech companies

    The Indonesian government has issued a new regulation in lieu of law (Perppu) this week to tax digital companies operating in the country. The regulation, which comes into effect next week, will charge technology companies value added tax on taxable intangible goods and services sold through electronic platforms. The government will also charge income tax or electronic tax on e-commerce activities carried out by companies with a significant economic presence. The government is likely planning to move its tax base further towards digital taxation as these activities have been growing significantly in the country. This is also part of a government effort to build up funds to address the economic impact of the COVID-19 pandemic.

    Saudi Arabia to ramp up oil production

    Saudi Arabia increased crude oil production this week to a record level of more than 12 million barrels per day – despite a drop in global demand due to the COVID-19 pandemic and pressure on the country to stop flooding the market amid its ongoing oil price war with Russia. OPEC restrictions on output of oil production expired on Tuesday, and Saudi Aramco has since warned its partners to prepare for a jump in oil output. It is planning to push production to its maximum capacity for the foreseeable future. However, supply to the market, both domestically and for export, may differ from production volumes depending on how much is kept in storage. Analysts predict that Saudi Aramco is likely to maintain higher output throughout April and May.

    Overseas investors sell record haul of Indian assets, as investors flee emerging markets

    Foreign investors sold a record US$16 billion of Indian stocks and bonds in March as the fallout from the COVID-19 pandemic led to flight from emerging markets. The Bombay Stock Exchange’s Sensex index fell 23 per cent in March to its lowest level since 2017, and the rupee dropped to a record low. The outflows last month were larger than during the entire year in 2008, around the global financial crisis. This is part of a broader exit from emerging markets, including South Korea and Taiwan, as markets continue to fall in response to rapidly growing concerns on COVID-19. However, concerns in India are increased due to its already slowing economic growth, which was expected to fall to a decade low this year.


    UNSC likely to meet next week to discuss COVID-19: The UN Security Council is likely to meet next week to discuss the COVID-19 pandemic.



    Across the APAC and MENA regions, COVID-19 containment measures were tightening this week. A fifth of the world’s population is now in lockdown, with more to join soon. The World Health Organization expects the number of cases in Malaysia – currently the worst-hit in Southeast Asia – to peak in mid-April. Governments across both regions are scrambling to pull together stimulus packages to mitigate the damage national economies are seeing from the pandemic. China has so far implemented cautious stimulus measures, despite initial optimism in markets that Beijing would take stronger action to prop up the country’s economy. Elsewhere, projected economic growth rates are being slashed, with Indonesia cutting its growth forecast from 5.3 per cent to 2.3 per cent this year.

    Across the board, regulation has been issued to provide fiscal and financial relief – Thailand, Indonesia, India, Malaysia, Qatar, and Oman are just a few countries in the region who have announced one of a series of stimulus packages to boost the hardest-hit sectors and support households through the economic downturn.

    These insights are taken from Asia House Advisory’s coronavirus monitoring service, which provides comprehensive, regular monitoring of the key economic and public health policy measures being taken by governments across Asia and the Middle East. Please reach out to Ed Ratcliffe, Head of Advisory at  for further details on this and our other advisory services.


    Asia House Advisory helps organisations understand new operating environments and meet business-critical challenges. Find out more.