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Coronavirus cases surge in U.S., Brazil and rise in Germany

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People enjoy the beach in Leme, south of Rio de Janeiro, Brazil, on June 21, 2020 during the Covid-19 coronavirus pandemic.

CARL DE SOUZA

A surge in coronavirus cases in the U.S. and Brazil, and further outbreaks in Germany — where the reproduction rate of the disease has risen substantially — are concerning global health experts, but international financial markets don’t seem too worried.

The largest single-day increase in global coronavirus cases was recorded on Sunday, according to the World Health Organisation (WHO), after more than 183,000 new cases were reported worldwide.

Brazil, with nearly 55,000 new infections, saw the largest number of cases reported, followed by the U.S., with more than 36,000 new cases reported Sunday. India, meanwhile, saw more than 15,000 new infections, the WHO said.

It should be noted that increases in the numbers of coronavirus cases could be down to increased and more widespread testing, and also anomalies in data collection. Brazil’s large spike in cases on Sunday, for instance, was in part due to a lag in reporting from three states (Bahia, Rio de Janeiro and Sao Paulo) compounding data from two days, WHO noted.

Nonetheless, the surge in cases does not appear to be a one off. In the U.S., more than 30,000 new coronavirus cases were reported on both Friday and Saturday, with infections rising in states across the South, West and Midwest.

Still, global markets don’t seem too perturbed by the uptick in coronavirus cases; U.S. stock futures rose early Monday morning following a solid weekly performance on Wall Street, while in Asia, shares were mixed Monday. European markets opened lower but pared early losses to trade down just 0.1%.

The total number of global confirmed cases since the start of the outbreak is now nearing 9 million and the death toll is close to half a million, with 468,331 reported deaths, according to Johns Hopkins University.

Germany’s rising ‘R’ rate

Even Germany, a country which has been heralded as a poster-child for its coronavirus strategy, saw its reproduction rate jump to 2.88 on Sunday.

The closely-watched “R” rate refers to the number of people that an infected individual goes on to infect, on average. Germany’s current R rate means that 100 people infected with the virus would, on average, go on to infect 288 people. Experts want to keep the reproduction number, or R rate, under one to slow the spread. 

The data from Germany’s public health body, the Robert Koch Institute, is a moving 4-day average, which reflects infection rates about one-two weeks ago, it said. The R rate “reacts sensitively to short-term changes in case numbers, such as those caused by individual outbreaks. This can lead to relatively large fluctuations, especially if the total number of new cases is small,” the RKI noted.

The rise in the country’s R rate and new infections (687 were reported Sunday) reflects localized outbreaks in nursing and retirement homes, among several religious communities and schools, as well as an outbreak at a meat-processing factory, where more than 1,000 employees tested positive for Covid-19, the RKI noted.

Germany’s data is sobering given that it has been praised for its coronavirus strategy. It implemented early contact tracing and managed to keep its death toll low compared to other countries. It has reported 8,895 deaths, according to Johns Hopkins University, despite 191,272 confirmed cases of the virus — a far lower fatality rate than its western European peers. France, for example, has recorded a similar amount of cases, of just over 197,000, but its death toll stands at 29,643.

Economic concerns

The uptick in cases seen worldwide comes after many countries lifted a number of the restrictions imposed on public and business life during lockdowns. 

The International Monetary Fund warned last week that the global economy was on track for a more significant contraction than the 3% it estimated in April.

Economists are watching the global numbers carefully, however, weighing up their potential impact on a global economic recovery. 

“Could a rise in new infections force advanced economies to re-impose lockdowns that are so harsh and widespread that they would shatter confidence and disrupt the nascent economic rebound? Four months after the virus started to hit Europe badly, that remains the key risk to watch for the economic outlook as well as for financial markets,” Holger Schmieding, chief economist at Berenberg, said in a note Monday.

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Amcham survey on impact of China national security law in Hong Kong

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A barge displays the words ‘Celebrate national security law’ on Victoria Harbour on July 1, 2020 in Hong Kong.

Anthony Kwan | Getty Images

A large majority of American companies in Hong Kong said they were concerned about the new national security law passed by China last month, according to a poll — but over 64% said their companies have no plans to leave the city.

The survey — conducted by the American Chamber of Commerce in Hong Kong between July 6 and July 9 — polled 183 respondents, which represent 15% of its membership, on China’s new national security law and what it means for businesses.

Beijing says new law is aimed at prohibiting secession, subversion of state power, terrorism activities and foreign interference. But critics say it undermines the autonomy promised to Hong Kong for 50 years after it was handed over to China from the U.K. in 1997.

Survey results showed that of the 76% who expressed concern about the new security law, about 41% were “extremely concerned,” while 36.6% was “somewhat concerned.”

Over half of the respondents said they felt “less safe” living and working in the city, while 26% said they felt safer, according to the Amcham survey. Despite that, 48% said they personally had no plans to leave.

CNBC reached out to the Hong Kong and Macao Affairs Office of the State Council for comment and did not immediately hear back.

It’s the ambiguity that is making people worried, so they are worried about the rule of law, and whether that will actually continue to exist the way it has under one country, two systems.

Tara Joseph

president, American Chamber of Commerce in Hong Kong

Tara Joseph, president of the American Chamber of Commerce in Hong Kong, told CNBC on Monday: “There is a small minority who feel much better because the streets … are quieter, and they feel they are safer there. But the majority … were concerned, or extremely concerned about the national security law.”

“So what it’s showing us is that the new normal in Hong Kong is not so normal, and there are a lot of question marks out there as far as businesses are concerned,” she added.

The introduction of the law sparked concerns among some about the impact of Hong Kong’s status as a global financial hub. Washington said it will revoke Hong Kong’s special trading status with the U.S.

Last week, a Bloomberg report surfaced, which said U.S. officials in the Trump administration were looking for ways to undermine the Hong Kong dollar’s peg to the greenback.

Despite those fears, however, more than 64% of the respondents indicated their companies have no plans to move out of Hong Kong.

They cited that there was potential in China and the Greater Bay area, an economically prosperous region comprising nine Chinese cities in Guangdong province and two special administrative territories — Hong Kong and Macao. 

However, the respondents were generally downcast about the overall business prospects in Hong Kong, saying that the city’s image has taken a hit as a result of the security law.

Around 42% said they were “pessimistic,” and around 25% said they were negative in the short run, but optimistic longer-term.

“Nobody wants to leave, but there are some question marks now that are arising now as a result of the national security law. And what makes people most uncomfortable as the survey is telling us is: they really want to hear some answers,” Josephs said.

“It’s the ambiguity that is making people worried, so they are worried about the rule of law, and whether that will actually continue to exist the way it has under one country, two systems. They are worried very much as well… about this idea of foreign interference, and where does that leave the U.S. community,” she added.

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The U.S. warns citizens of ‘arbitrary detention’ in China

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The national flags of the U.S. and China waving outside a building.

Teh Eng Koon | AFP via Getty Images

The U.S. has asked its citizens to “exercise increased caution” in China due to a “heightened risk of arbitrary detention” — a claim slammed by Chinese state-backed media Global Times as a “blatant distortion of truth.”

The U.S. advisory was issued on Saturday and did not specify what prompted the alert.

But it came amid worsening U.S.-China relations over a range of issues that include Beijing’s handling of the coronavirus pandemic, Hong Kong, as well as alleged human rights violations by Chinese officials in Xinjiang and Tibet.

“Exercise increased caution in the People’s Republic of China (PRC) due to arbitrary enforcement of local laws for purposes other than maintaining law and order. This arbitrary enforcement may include detention and the use of exit bans,” read the advisory.

“U.S. citizens may be detained without access to U.S. consular services or information about their alleged crime,” it added.

The advisory also said that U.S. citizens may be “subjected to prolonged interrogations and extended detention for reasons related to ‘state security'” and warned that they could be detained and/or deported “for sending private electronic messages critical of the PRC government.”

Chinese state-backed publication, Global Times, citing a professor from the China Foreign Affairs University, accused the U.S. of hyping up fears of China and a “blatant distortion” on how Chinese authorities enforce the country’s laws. Global Times is a tabloid under the People’s Daily, which is the official newspaper of the Communist Party of China. 

The report said foreigners will only be arrested on “solid evidence of illegal acts” and not “just for a few critical comments.”

Relations between the U.S. and China have been at their worst in decades. But the U.S. is not alone in warning its citizens of the potential risk that laws may be arbitrarily applied within Chinese territory.

Last week, Australia advised its citizens not to travel to Hong Kong, and to reconsider their need to remain in the city, due to uncertainties surrounding the new national security law there. Hong Kong is a special administrative region of China.

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What going back to work in an office will be like after lockdown

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Social distancing and masks may become commonplace in offices when coronavirus lockdowns ease.

Miodrag Ignjatovic | Getty Images

What will it be like to go back to the office when countries start to loosen their lockdowns?

Before the coronavirus pandemic hit, Tuomas Peltoniemi was used to traveling to China, Japan and Australia for up to 100 days a year in his role as executive vice-president and managing director for the Asia-Pacific region at ad agency R/GA. But since lockdowns started during the Lunar New Year in January, he’s been based in his family home in Singapore.

And since March, when R/GA’s Shanghai office re-opened (complete with temperature checks, hand sanitizer, masks and extra cleaning), Peltoniemi has been devising plans for how some of the company’s other employees can go back to their regular workplaces for when shelter-in-place restrictions are lifted.

“I’m looking at it more from a perspective of, you know, what is truly and genuinely the role of the office space? … What are the expectations from people from working from an office space and working from wherever they choose to work from? … This return to (a) new normal, if you want to call it that, is not a linear, absolute date,” Peltoniemi told CNBC by phone.

When reopening in Shanghai, R/GA was flexible with how staff chose to go back, given that some of them had returned to family homes elsewhere in China or overseas for the New Year celebrations and may have felt uneasy about traveling. “A lot of the issues don’t so much come from the virus itself, it comes from the fear and uncertainty. Especially in Shanghai, there was no precedent for it,” Peltoniemi stated.

Research from jobs website Totaljobs suggests that, in the U.K. at least, people are keen to get back to their workplaces, with 54% wanting to do so by the end of June. The survey of nearly 7,000 people was conducted online between May 12 to May 15.

Masked meetings

Masks have been mandated by some governments for people on public transport, but don’t expect to see people wearing them in the workplace long term, says Sean McEvoy, a director at interior fit-out contractor Portview.

“It’s not a natural thing for us to run around with masks and gloves … the solution has to be in the space,” he told CNBC by phone.

Businesses may run in shifts, or only have people come to their workplace three days a week. Perspex screens might divide desks and boardroom tables might make way for socially-distanced podiums, McEvoy suggested.

A computer-generated image from interiors contractor Portview shows how office space may be segregated as people go back to the workplace after the coronavirus lockdowns are eased.

Portview

For Leo Curtis, a product marketing manager at Lenovo in Beijing, returning to the office in March felt “refreshing.”

“When I first went back, I was hesitant, but it is a nice thing to have a collective place to see your colleagues and have a face to face — mask to mask — meeting on some things,” he told CNBC by email.

To manage childcare, Curtis is now working from home much more than before the pandemic. “That’s a difficult adjustment — managing distractions and spotty internet connections,” but it’s made easier by communicating on WeChat for any quick issues, Curtis stated.

Office space

The need for office space may reduce, but we’re not going to see flagship buildings turn residential any time soon, according to Patrick Plant, real estate partner at law firm Linklaters.

“I don’t think we’ll suddenly see (London skyscraper) The Shard suddenly becoming a block of apartments from top to bottom, or anything of that kind,” he told CNBC by phone.

But, how offices have adapted will be up for comparison, he suggested. “Peers and contemporaries I’m sure will be comparing notes about what their organization has done or maybe what it hasn’t done … I’m a great believer in the physical space being very much a physical manifestation of the culture of an organization,” Plant said.

Eliot Wilson, head of research at reputation management company Right Angles sees more meetings happening at members’ clubs and says having premises in the U.K. capital is “hard to justify” given their cost.

“Banter with colleagues — that ‘watercooler culture’ — is a nice-to-have, but once you put a cold, hard monetary value on it, I don’t think it stacks up,” he told CNBC by email.

Technology may go some way to providing virtual watercooler moments. Panion is an internal social media platform for businesses, and CEO and founder Melanie Aronson said employees used it to form support groups and find others with similar interests during lockdowns.

Since January, it has seen an 86.7% increase in unique users joining hangouts it calls “gatherings,” for example.

Employee social media app Panion saw a rise in usage during lockdowns caused by the coronavirus.

Panion

Only a quarter of staff will be allowed into the London office of ad agency M&C Saatchi at a time — and on a voluntary basis.

CEO Camilla Kemp hopes that flexible working will attract a more diverse range of people. “We will open up the doors of talent too — making us a more inclusive environment for more talent who otherwise might not have considered a career with us, because they couldn’t physically be ‘in the office’ at conventional working hours,” she told CNBC.

For Peltoniemi at R/GA, life is never likely to be the same again. “I think the nine to five … it’s kind of out of the question now, actually. We did a global work from home survey for our staff and 95% of our global staff feel like they’ve been able to connect and do work at or above the levels that they had been in the past, during the course of the pandemic.”

And while the streets of a city such as Shanghai appear “normal” again, people’s mindset has shifted, Peltoniemi said.

“I was speaking to our leadership team and one of them said it feels like Covid never happened when you walk around Shanghai … When you speak to people more, so much has changed, actually.”

Employees are eating better, taking fitness classes and drinking less alcohol, and they are keen to make their working days more efficient, Peltoniemi said.

“Now that the sort of freedom of doing what we want was taken away from the teams, albeit for a short period of time, it’s almost opened up people’s eyes and minds to, there is more I need to consider than just work and the office life,” he added.

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