FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

China Business Weekly1 April 2020

URGENT: CALL FOR MEDICAL SUPPLIESThe Flanders-China Chamber of Commerce (FCCC) calls on its member companies to donate face masks and othermedical supplies to our hospitals, which urgently need those supplies to care for the increasing numbers of Covid-19patients.

We also like to thank the Alibaba Foundation and Chairman Jack Ma for the medical supplies which have alreadyarrived at Liege Airport, destined for Belgium and also other European countries. More cargo flights with medicalsupplies are expected in the coming days.

Contact: info@flanders-china.be

COVID-19 RESOURCES GUIDE v.3.1

The latest version of the Covid-19 Resources Guide v.3.1 is available here and can also be downloaded as a PDF on the website of the Flanders-China Chamber of Commerce (FCCC). The latest statistics of cases and deaths can be consulted on Johns Hopkins University’s CSSE page: https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html

Changes added to the chapter on travel restrictions:Traveling abroad for non-essential purposes is now prohibited in Belgium. The People's Republic of China has closed itsborder to entry by foreign passport holders, even if they hold valid visas or residence permits. There are some exceptions,including for diplomats. Travelers who have an urgent and valid reason to go to China may apply for new visas at ChineseEmbassies and Consulates abroad. International flights to and from China are severely restricted to one destinationabroad per airline served once a week. Those flights are now reserved mainly for Chinese citizens and students returningto China.

Follow the Flanders-China Chamber of Commerce onLinkedIn – Click here

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

China Business Weekly1 April 2020

URGENT: CALL FOR MEDICAL SUPPLIESThe Flanders-China Chamber of Commerce (FCCC) calls on its member companies to donate face masks and othermedical supplies to our hospitals, which urgently need those supplies to care for the increasing numbers of Covid-19patients.

We also like to thank the Alibaba Foundation and Chairman Jack Ma for the medical supplies which have alreadyarrived at Liege Airport, destined for Belgium and also other European countries. More cargo flights with medicalsupplies are expected in the coming days.

Contact: info@flanders-china.be

COVID-19 RESOURCES GUIDE v.3.1

The latest version of the Covid-19 Resources Guide v.3.1 is available here and can also be downloaded as a PDF on the website of the Flanders-China Chamber of Commerce (FCCC). The latest statistics of cases and deaths can be consulted on Johns Hopkins University’s CSSE page: https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html

Changes added to the chapter on travel restrictions:Traveling abroad for non-essential purposes is now prohibited in Belgium. The People's Republic of China has closed itsborder to entry by foreign passport holders, even if they hold valid visas or residence permits. There are some exceptions,including for diplomats. Travelers who have an urgent and valid reason to go to China may apply for new visas at ChineseEmbassies and Consulates abroad. International flights to and from China are severely restricted to one destinationabroad per airline served once a week. Those flights are now reserved mainly for Chinese citizens and students returningto China.

Follow the Flanders-China Chamber of Commerce onLinkedIn – Click here

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

MEMBERS' NEWSFelix Europe donates protective clothing to hospitals in East-Flanders

Mr. Tom Zhou, Felix Europe BVBA, donates more than 1000 medical protective clothing to hospitals in theProvince of East-FlandersThe Province of East-Flanders and the Flanders-China Chamber of Commerce facilitated the donation to combat theCovid-19 virus.

Mr. Tom Zhou, born in Weihai, Shandong province, and living in Belgium, is General Manager of Felix Europe BVBA,exporter of quality goods from Europe to China. The company donated more than 1,000 medical protective overalls tomultiple hospitals in Flanders e.g. UZ Gent, Maria Middelares, Sint-Vincentius Hospital Deinze and A.S.Z Hospital Aalstto support the fight against the Covid-19 virus.

The overalls are produced by the Chinese No. 1 manufacturer, Dishang Group in Shandong province.

One of the emerging industries in the city of Weihai is the medical & healthcare industry. The core industries of Weihaiare machinery, food, transportation equipment, textiles and garments, medicine and medical devices, electronics andnew materials.

The Flanders-China Chamber of Commerce and the City of Weihai have a longstanding cooperation agreement. Thecity has major investments from several member companies such as those from Bekaert, Beaulieu Technical TextilesBeaulieu Fibres & Yarns.

www.flanders-china.be - gwenn.sonck@flanders-china.be

https://oost-vlaanderen.be/ - info@oost-vlaanderen.be

Linklaters: COVID-19: Key attention points regarding Belgian company law anddisclosure

The Covid-19 crisis is raising unprecedented legal questions for companies throughout the world. We have put togethera checklist summarising the main points of attention under company law, for both listed and non-listed companies,related to the impact of Covid-19. Please click here to access it. We are advising a number of companies on those issuesand will be happy to answer any questions you may have: feel free to reach out to your usual contacts at Linklaters.

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

MEMBERS' NEWSFelix Europe donates protective clothing to hospitals in East-Flanders

Mr. Tom Zhou, Felix Europe BVBA, donates more than 1000 medical protective clothing to hospitals in theProvince of East-FlandersThe Province of East-Flanders and the Flanders-China Chamber of Commerce facilitated the donation to combat theCovid-19 virus.

Mr. Tom Zhou, born in Weihai, Shandong province, and living in Belgium, is General Manager of Felix Europe BVBA,exporter of quality goods from Europe to China. The company donated more than 1,000 medical protective overalls tomultiple hospitals in Flanders e.g. UZ Gent, Maria Middelares, Sint-Vincentius Hospital Deinze and A.S.Z Hospital Aalstto support the fight against the Covid-19 virus.

The overalls are produced by the Chinese No. 1 manufacturer, Dishang Group in Shandong province.

One of the emerging industries in the city of Weihai is the medical & healthcare industry. The core industries of Weihaiare machinery, food, transportation equipment, textiles and garments, medicine and medical devices, electronics andnew materials.

The Flanders-China Chamber of Commerce and the City of Weihai have a longstanding cooperation agreement. Thecity has major investments from several member companies such as those from Bekaert, Beaulieu Technical TextilesBeaulieu Fibres & Yarns.

www.flanders-china.be - gwenn.sonck@flanders-china.be

https://oost-vlaanderen.be/ - info@oost-vlaanderen.be

Linklaters: COVID-19: Key attention points regarding Belgian company law anddisclosure

The Covid-19 crisis is raising unprecedented legal questions for companies throughout the world. We have put togethera checklist summarising the main points of attention under company law, for both listed and non-listed companies,related to the impact of Covid-19. Please click here to access it. We are advising a number of companies on those issuesand will be happy to answer any questions you may have: feel free to reach out to your usual contacts at Linklaters.

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

HEALTHForeigners temporarily not allowed to enter China

As of 0:00 h. on March 28, China banned foreignersfrom entering the country, even those with a valid visaor residence permit. Only a few exceptions are allowed,such as for diplomats or those who have obtained a newhumanitarian visa. The measure aims to stop theincreasing number of travelers arriving in China fromabroad who are infected with the SARS-CoV-2 virus.Chinese passport holders are still allowed to enter thecountry, but they will be tested for the coronavirus andquarantined for 14 days. Chinese airlines drasticallyreduced the number of international flights, as they are nowalmost exclusively reserved for Chinese nationals. About90% of all the imported cases are Chinese passportholders, Vice Foreign Minister Luo Zhaohui said, addingthat 40% were Chinese students returning home.

“In view of the rapid spread of the new coronavirusepidemic worldwide, China has decided to temporarilysuspend entry of foreigners with currently valid visas andresidence permits in China,” the Chinese Ministry ofForeign Affairs said. “This is an interim measure that Chinahas to take in order to respond to the current epidemicsituation, with reference to the practice of many countries,”it added. “The Chinese side will adjust the above measuresaccording to the epidemic situation through separateannouncements.” Foreign citizens coming to China for“necessary economic, trade, scientific or technologicalactivities or out of emergency humanitarian needs” can stillapply for visas.

International flight routes will also be drastically cut.China’s aviation regulator has asked domestic airlines toreduce their international routes to only one percountry while capping the number of flights to no morethan one flight per week. Airlines are required to cap thepassenger load factor on inbound and outbound flights at75% to curb contagion risks. Some Chinese provinceshave suspended all international flights, initially for 14 days.On March 25, Shanghai Pudong International Airportranked first in international connections, still accepting 51overseas flights, followed by 18 flights to Guangzhou, 10flights to Beijing, and seven flights to Xiamen in Fujianprovince. But those number were down from the beginningof the month, when Shanghai welcomed 52 internationalflights, Beijing 25 and Guangzhou 18.

The number of scheduled international flights isexpected to drop to 108 this week, down from 734 for theprevious week and only 1.2% of the weekly volumebefore the pandemic. Beijing, Shanghai and Guangzhou,will operate 61 international flights this week, down by 89%from the week before. The daily number of incoming airtravelers will also go down from 25,000 to 4,000 for thesame period, officials said.

Last week, for the first time in two months, cities inHubei province – except for Wuhan – lifted some travelrestrictions, allowing for visitors from outside the provinceto return home and for migrant workers to return to theirworkplaces. The lockdown in Wuhan will be lifted on April8. Several days after China reported no new cases –except for imported ones – Premier Li Keqiang warnedlocal authorities not to cover up new cases of Covid-19 toprevent new outbreaks now that Chinese employees returnto work. He ordered them to stick to the preventionmeasures of ‘early detection, reporting, isolation andtreatment’, to stop the epidemic in certain areas andprevent an even bigger outbreak.” Airports in Hubeiprovince have resumed flight services except for WuhanTianhe International Airport, which will follow on April 8.Wuhan has had its coronavirus risk evaluation downgradedfrom “high risk” to “medium risk”.

About 6 million Hubei residents now work outside theirhome province and 70% of them had returned to theirhometowns for the Spring Festival holidays in January andhave been stranded ever since. For some of those trappedat home, the prolonged holidays have become much morestressful rather than relaxing as they might have facedlosing their jobs due to a delayed return, or being kickedout by landlords in the cities where they work due todiscrimination against Hubei natives. Those stranded inHubei – except for Wuhan – have now started returning towork in other cities in China. In Wuhan, services resumedon 117 bus routes, around 30% of the city’s total bustransport capacity. Six metro lines restarted service onMarch 28. Seventeen railway stations in Wuhan startedreceiving arriving trains and will begin outbound operationson April 8 – also the date the city is scheduled to reopen allinbound and outbound bus services.

Commercial businesses in Wuhan, the hardest-hit city inChina by COVID-19, partly reopened on March 30 aftermore than two months of suspension, signaling amilestone in the country's hard fight against the epidemic.The first day some shopping malls reopened, someemployees and shop owners told the Global Times thenumber of visitors and the shops' income was more thanhalf of the normal figures. “Some people are still cautiousabout going to public places. Besides, not everyone isallowed to go out due to the restrictions in residentialcommunities,” an employee at the Zhongshang mall toldthe Global Times on condition of anonymity.

Wuhan’s cargo and logistics transportation is alsoresuming. On March 28, a China-Europe freight train

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

HEALTHForeigners temporarily not allowed to enter China

As of 0:00 h. on March 28, China banned foreignersfrom entering the country, even those with a valid visaor residence permit. Only a few exceptions are allowed,such as for diplomats or those who have obtained a newhumanitarian visa. The measure aims to stop theincreasing number of travelers arriving in China fromabroad who are infected with the SARS-CoV-2 virus.Chinese passport holders are still allowed to enter thecountry, but they will be tested for the coronavirus andquarantined for 14 days. Chinese airlines drasticallyreduced the number of international flights, as they are nowalmost exclusively reserved for Chinese nationals. About90% of all the imported cases are Chinese passportholders, Vice Foreign Minister Luo Zhaohui said, addingthat 40% were Chinese students returning home.

“In view of the rapid spread of the new coronavirusepidemic worldwide, China has decided to temporarilysuspend entry of foreigners with currently valid visas andresidence permits in China,” the Chinese Ministry ofForeign Affairs said. “This is an interim measure that Chinahas to take in order to respond to the current epidemicsituation, with reference to the practice of many countries,”it added. “The Chinese side will adjust the above measuresaccording to the epidemic situation through separateannouncements.” Foreign citizens coming to China for“necessary economic, trade, scientific or technologicalactivities or out of emergency humanitarian needs” can stillapply for visas.

International flight routes will also be drastically cut.China’s aviation regulator has asked domestic airlines toreduce their international routes to only one percountry while capping the number of flights to no morethan one flight per week. Airlines are required to cap thepassenger load factor on inbound and outbound flights at75% to curb contagion risks. Some Chinese provinceshave suspended all international flights, initially for 14 days.On March 25, Shanghai Pudong International Airportranked first in international connections, still accepting 51overseas flights, followed by 18 flights to Guangzhou, 10flights to Beijing, and seven flights to Xiamen in Fujianprovince. But those number were down from the beginningof the month, when Shanghai welcomed 52 internationalflights, Beijing 25 and Guangzhou 18.

The number of scheduled international flights isexpected to drop to 108 this week, down from 734 for theprevious week and only 1.2% of the weekly volumebefore the pandemic. Beijing, Shanghai and Guangzhou,will operate 61 international flights this week, down by 89%from the week before. The daily number of incoming airtravelers will also go down from 25,000 to 4,000 for thesame period, officials said.

Last week, for the first time in two months, cities inHubei province – except for Wuhan – lifted some travelrestrictions, allowing for visitors from outside the provinceto return home and for migrant workers to return to theirworkplaces. The lockdown in Wuhan will be lifted on April8. Several days after China reported no new cases –except for imported ones – Premier Li Keqiang warnedlocal authorities not to cover up new cases of Covid-19 toprevent new outbreaks now that Chinese employees returnto work. He ordered them to stick to the preventionmeasures of ‘early detection, reporting, isolation andtreatment’, to stop the epidemic in certain areas andprevent an even bigger outbreak.” Airports in Hubeiprovince have resumed flight services except for WuhanTianhe International Airport, which will follow on April 8.Wuhan has had its coronavirus risk evaluation downgradedfrom “high risk” to “medium risk”.

About 6 million Hubei residents now work outside theirhome province and 70% of them had returned to theirhometowns for the Spring Festival holidays in January andhave been stranded ever since. For some of those trappedat home, the prolonged holidays have become much morestressful rather than relaxing as they might have facedlosing their jobs due to a delayed return, or being kickedout by landlords in the cities where they work due todiscrimination against Hubei natives. Those stranded inHubei – except for Wuhan – have now started returning towork in other cities in China. In Wuhan, services resumedon 117 bus routes, around 30% of the city’s total bustransport capacity. Six metro lines restarted service onMarch 28. Seventeen railway stations in Wuhan startedreceiving arriving trains and will begin outbound operationson April 8 – also the date the city is scheduled to reopen allinbound and outbound bus services.

Commercial businesses in Wuhan, the hardest-hit city inChina by COVID-19, partly reopened on March 30 aftermore than two months of suspension, signaling amilestone in the country's hard fight against the epidemic.The first day some shopping malls reopened, someemployees and shop owners told the Global Times thenumber of visitors and the shops' income was more thanhalf of the normal figures. “Some people are still cautiousabout going to public places. Besides, not everyone isallowed to go out due to the restrictions in residentialcommunities,” an employee at the Zhongshang mall toldthe Global Times on condition of anonymity.

Wuhan’s cargo and logistics transportation is alsoresuming. On March 28, a China-Europe freight train

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

carrying 50 cargo containers left Wujiashan RailwayContainer Station in Wuhan en route to Duisburg,Germany, for the first time since the outbreak began.Nearly 90% of all goods aboard were produced locally inWuhan, including 166.4 metric tons of medical supplies.

Several tourist spots and cinemas in Chinese citiesreopened their doors last week, but have now beenordered to close again, as fears mount that infectedtravelers and those showing no symptoms could causenew outbreaks. Qiu Yunqing, Executive Vice President ofthe First Hospital affiliated to the Zhejiang University

School of Medicine in Hangzhou and the leader of medicalteam from Zhejiang province that went to Italy to help localhospitals cope with the Covid-19 pandemic, said the bestway to minimize the risk of being infected is to stay athome. Qiu also advised Chinese people overseas not torush back to China unless the trip is absolutely necessary.“The risk of coronavirus infection could be higher on theway to China than at home,” Qiu said.

This summary was compiled based on reports by the ChinaDaily, Shanghai Daily, Global Times, the Guardian and theSouth China Morning Post.

China ramping up production of ventilators

Chinese ventilator manufacturers are ramping upefforts to supply countries ravaged by the novelcoronavirus, while calling for a smoother and integratedglobal supply chain to guarantee production. “With demandfor ventilators soaring all over the world, we're short ofcomponents, from basic items like steel metal parts toimported parts,” Cui Gang, Clinical Director of BeijingSiriusmed Medical Device, told the Global Times. He saidthere are nearly 1,000 orders from overseas that thecompany's manufacturing facility will fill by June, andcertain domestic companies may have orders lasting untilthe fourth quarter of this year. However, insufficient supplyof raw materials, especially core components, is thebiggest problem that curtails production, Cui said. “Weeven use new ventilator products to trade for corecomponents that are in tight supply,” Cui said. Other bigmanufacturers like Mindray and Beijing Aeonmed Co arealso accelerating manufacturing amid surging overseasdemand.

London-based analytics firm GlobalData estimatedthat about 880,000 more ventilators are in demandglobally amid the epidemic, with the U.S. reporting a gapof 75,000 ventilators, while France, Germany, Italy, Spainand the UK are collectively short of 74,000 devices. In theU.S., Ford, General Motors and Tesla have responded togovernment calls to make ventilators, while the UK lastweek began to deliver ventilator blueprints to over 60military engineering companies and car manufacturersincluding Rolls-Royce and Unipart. China's AnhuiZhongding Sealing Parts Co announced it would supplyprecision premium rubber sealing parts for GM's ventilator

manufacturing project.

“Overseas ventilator orders have been soaring. The ordersare mainly from Europe. In early March, we received anorder for nearly 10,000 pieces of medical equipment,mainly ventilators and monitors, from Italy. The goods havealready been shipped and we expect the entire order to becompleted by the middle of April,” said May Li, Executive ofmedical equipment manufacturer Mindray. “The companyhas a relatively localized layout, such as in operations,sales, and after-sales, in the overseas markets. Only asmall amount of our raw materials comes from overseasmarkets, which we have already sourced, and we havealso found alternatives to them. In addition, with theincreasing production capacity and the improvement of thesituation in China, we see no problem in timely productdeliveries,” Li said. Li Kai, Assistant to the Chairman ofBeijing Aeonmed, an anesthesia and respiratory medicalequipment enterprise, said: “Our plants are working aroundthe clock to increase production capacity as we havereceived orders from several countries”. He added thatearlier demand for ventilators, which are normally used inthe intensive care units (ICUs) of hospitals, was not thathigh.

According to market research consultancy Wismar, the topfive Chinese ventilator brands are Mindray, Aeonmed,Comen, Amoul and Superstar. During the first six monthsof last year, China exported respiratory medical equipmentto 166 countries and regions, valued at USD360 million, up8.41% on a yearly basis. Industry Expert Zhang Xun saidthat “Chinese enterprises have completed thetransformation from ‘Made in China’ to ‘Created in China’and become an integral part of the global respiratoryproduct market,” the China Daily reports.

Xu Kemin, an official with the Ministry of Industry andInformation Technology (MIIT), said overseas demand formultifunction ventilators is surging, and manufacturers inChina are toiling day and night to meet the growingdemand. “China has 21 multifunction ventilator makersand eight of them have obtained the European Union’scompulsory CE marking,” Xu said. The companies havealready signed contracts for 20,000 multifunctionventilators, and many more are pouring in every day.“Since March 19, these companies have provided morethan 1,700 multifunction ventilators to overseas hospitals.That equals half of this year’s supplies to domestic

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

carrying 50 cargo containers left Wujiashan RailwayContainer Station in Wuhan en route to Duisburg,Germany, for the first time since the outbreak began.Nearly 90% of all goods aboard were produced locally inWuhan, including 166.4 metric tons of medical supplies.

Several tourist spots and cinemas in Chinese citiesreopened their doors last week, but have now beenordered to close again, as fears mount that infectedtravelers and those showing no symptoms could causenew outbreaks. Qiu Yunqing, Executive Vice President ofthe First Hospital affiliated to the Zhejiang University

School of Medicine in Hangzhou and the leader of medicalteam from Zhejiang province that went to Italy to help localhospitals cope with the Covid-19 pandemic, said the bestway to minimize the risk of being infected is to stay athome. Qiu also advised Chinese people overseas not torush back to China unless the trip is absolutely necessary.“The risk of coronavirus infection could be higher on theway to China than at home,” Qiu said.

This summary was compiled based on reports by the ChinaDaily, Shanghai Daily, Global Times, the Guardian and theSouth China Morning Post.

China ramping up production of ventilators

Chinese ventilator manufacturers are ramping upefforts to supply countries ravaged by the novelcoronavirus, while calling for a smoother and integratedglobal supply chain to guarantee production. “With demandfor ventilators soaring all over the world, we're short ofcomponents, from basic items like steel metal parts toimported parts,” Cui Gang, Clinical Director of BeijingSiriusmed Medical Device, told the Global Times. He saidthere are nearly 1,000 orders from overseas that thecompany's manufacturing facility will fill by June, andcertain domestic companies may have orders lasting untilthe fourth quarter of this year. However, insufficient supplyof raw materials, especially core components, is thebiggest problem that curtails production, Cui said. “Weeven use new ventilator products to trade for corecomponents that are in tight supply,” Cui said. Other bigmanufacturers like Mindray and Beijing Aeonmed Co arealso accelerating manufacturing amid surging overseasdemand.

London-based analytics firm GlobalData estimatedthat about 880,000 more ventilators are in demandglobally amid the epidemic, with the U.S. reporting a gapof 75,000 ventilators, while France, Germany, Italy, Spainand the UK are collectively short of 74,000 devices. In theU.S., Ford, General Motors and Tesla have responded togovernment calls to make ventilators, while the UK lastweek began to deliver ventilator blueprints to over 60military engineering companies and car manufacturersincluding Rolls-Royce and Unipart. China's AnhuiZhongding Sealing Parts Co announced it would supplyprecision premium rubber sealing parts for GM's ventilator

manufacturing project.

“Overseas ventilator orders have been soaring. The ordersare mainly from Europe. In early March, we received anorder for nearly 10,000 pieces of medical equipment,mainly ventilators and monitors, from Italy. The goods havealready been shipped and we expect the entire order to becompleted by the middle of April,” said May Li, Executive ofmedical equipment manufacturer Mindray. “The companyhas a relatively localized layout, such as in operations,sales, and after-sales, in the overseas markets. Only asmall amount of our raw materials comes from overseasmarkets, which we have already sourced, and we havealso found alternatives to them. In addition, with theincreasing production capacity and the improvement of thesituation in China, we see no problem in timely productdeliveries,” Li said. Li Kai, Assistant to the Chairman ofBeijing Aeonmed, an anesthesia and respiratory medicalequipment enterprise, said: “Our plants are working aroundthe clock to increase production capacity as we havereceived orders from several countries”. He added thatearlier demand for ventilators, which are normally used inthe intensive care units (ICUs) of hospitals, was not thathigh.

According to market research consultancy Wismar, the topfive Chinese ventilator brands are Mindray, Aeonmed,Comen, Amoul and Superstar. During the first six monthsof last year, China exported respiratory medical equipmentto 166 countries and regions, valued at USD360 million, up8.41% on a yearly basis. Industry Expert Zhang Xun saidthat “Chinese enterprises have completed thetransformation from ‘Made in China’ to ‘Created in China’and become an integral part of the global respiratoryproduct market,” the China Daily reports.

Xu Kemin, an official with the Ministry of Industry andInformation Technology (MIIT), said overseas demand formultifunction ventilators is surging, and manufacturers inChina are toiling day and night to meet the growingdemand. “China has 21 multifunction ventilator makersand eight of them have obtained the European Union’scompulsory CE marking,” Xu said. The companies havealready signed contracts for 20,000 multifunctionventilators, and many more are pouring in every day.“Since March 19, these companies have provided morethan 1,700 multifunction ventilators to overseas hospitals.That equals half of this year’s supplies to domestic

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

hospitals,” Xu said, adding it was difficult to scale upproduction as some parts are imported from Europe.

Currently, top global ventilator manufacturers includeGermany's Dräger, Sweden's Getinge Group andSwitzerland's Hamilton, while Chinese brands are in thelow to medium range of the spectrum. However theperformance of Chinese made ventilators has madeprogress, with leading domestic manufacturers likeMindray climbing to the second tier among all ventilator

brands in the world, according to the Global Times.

China will also strive to maintain the stable domesticproduction of active pharmaceutical ingredients andensure the security of the global supply chain. Havingmore than 1,500 production enterprises, China is theworld’s largest producer and exporter of pharmaceuticalingredients with an annual output of around 3 million tons.Currently, more than 80% of China’s pharmaceuticalingredients production has resumed.

Quality issues of Chinese medical supplies should not be politicized

A controversy has erupted about the quality of somemedical supplies that foreign countries imported fromChina. But the Chinese government and ChineseEmbassies emphasized that the issue should not bepoliticized. They point out that a distinction should bemade between supplies provided with Chinese governmentsupport on the one hand and deals made between foreignbuyers and Chinese companies, whose products may nothave received quality approvals from the Chinesegovernment on the other hand. The company that providedCovid-19 test kits to Spain did not get a license fromChina's authorities for selling its products, the ChineseEmbassy to Spain said on its Twitter account in responseto claims that these test kits were “substandard”.

Spain has bought USD467 million in medical supplies fromChina, including 950 ventilators, 5.5 million test kits, 11million pairs of gloves and more than half a billion facemasks. But the test kits involved in the incident are not theones it bought from the Chinese government - they wereimported by a Spanish supplier from a Chinesemanufacturer. The test kits were found to be of "lowsensitivity" and the Spanish government decided to returnthe products and contact the manufacturer to replace thetests kits with another batch. The market supervisionadministration in Shenzhen has started an investigationinto the company, it announced in a notice. The test kits

were produced by Shenzhen Bioeasy Biotechnology. Thecompany claimed on its WeChat account that the lowsensitivity of the test kits used in Spain was due to theusers not following the instructions properly in the processof taking samples, the Global Times reports.

China’s sincere efforts to help others fight Covid-19 byfacilitating purchases of made-in-China medical suppliesshould be respected, Foreign Ministry Spokeswoman HuaChunying said, adding that any political interpretation of themoves should be avoided. The remarks came after mediareports said some countries raised concerns over thequality of the Chinese supplies, or questioned the motivesof the country’s efforts to help others. Hua said manycountries have recently purchased Chinese medicalsupplies as the contagion spreads worldwide, and Chineseenterprises are working round-the-clock to produceproducts that help protect people’s lives in many countries.“While guaranteeing domestic supply, we support qualifiedand reputable companies to export medical supplies andwe also provide convenience in terms of manufacturing,transport and customs clearance,” she told reporters at anews conference in Beijing.

In Slovakia, inaccurate results of rapid detection kitspurchased from China were due to medical personnelmisusing antigen test kits. As for the so-called defectivemasks that the Dutch government purchased from China,some masks purchased by the Netherlands are notadequate for use in intensive care units, the China Dailyreports.

Josep Borrell, High Representative of the European Unionfor Foreign Affairs and Security Policy, has called on EUcountries to stand ready for a “struggle for influence” in a“global battle of narratives” as Beijing has called itscampaign to send millions of face masks to Europe a showof solidarity and friendship. Borrell noted that the focus hadshifted from Europe helping China to the other way round.“China is aggressively pushing the message that, unlikethe U.S., it is a responsible and reliable partner.” ButEuropean Commission President Ursula von der Leyenthanked China for providing the EU with medical supplies,including 2 million surgical masks. She called it a“reciprocal” act given the EU had dispatched similarequipment to China during the start of the outbreak.

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

hospitals,” Xu said, adding it was difficult to scale upproduction as some parts are imported from Europe.

Currently, top global ventilator manufacturers includeGermany's Dräger, Sweden's Getinge Group andSwitzerland's Hamilton, while Chinese brands are in thelow to medium range of the spectrum. However theperformance of Chinese made ventilators has madeprogress, with leading domestic manufacturers likeMindray climbing to the second tier among all ventilator

brands in the world, according to the Global Times.

China will also strive to maintain the stable domesticproduction of active pharmaceutical ingredients andensure the security of the global supply chain. Havingmore than 1,500 production enterprises, China is theworld’s largest producer and exporter of pharmaceuticalingredients with an annual output of around 3 million tons.Currently, more than 80% of China’s pharmaceuticalingredients production has resumed.

Quality issues of Chinese medical supplies should not be politicized

A controversy has erupted about the quality of somemedical supplies that foreign countries imported fromChina. But the Chinese government and ChineseEmbassies emphasized that the issue should not bepoliticized. They point out that a distinction should bemade between supplies provided with Chinese governmentsupport on the one hand and deals made between foreignbuyers and Chinese companies, whose products may nothave received quality approvals from the Chinesegovernment on the other hand. The company that providedCovid-19 test kits to Spain did not get a license fromChina's authorities for selling its products, the ChineseEmbassy to Spain said on its Twitter account in responseto claims that these test kits were “substandard”.

Spain has bought USD467 million in medical supplies fromChina, including 950 ventilators, 5.5 million test kits, 11million pairs of gloves and more than half a billion facemasks. But the test kits involved in the incident are not theones it bought from the Chinese government - they wereimported by a Spanish supplier from a Chinesemanufacturer. The test kits were found to be of "lowsensitivity" and the Spanish government decided to returnthe products and contact the manufacturer to replace thetests kits with another batch. The market supervisionadministration in Shenzhen has started an investigationinto the company, it announced in a notice. The test kits

were produced by Shenzhen Bioeasy Biotechnology. Thecompany claimed on its WeChat account that the lowsensitivity of the test kits used in Spain was due to theusers not following the instructions properly in the processof taking samples, the Global Times reports.

China’s sincere efforts to help others fight Covid-19 byfacilitating purchases of made-in-China medical suppliesshould be respected, Foreign Ministry Spokeswoman HuaChunying said, adding that any political interpretation of themoves should be avoided. The remarks came after mediareports said some countries raised concerns over thequality of the Chinese supplies, or questioned the motivesof the country’s efforts to help others. Hua said manycountries have recently purchased Chinese medicalsupplies as the contagion spreads worldwide, and Chineseenterprises are working round-the-clock to produceproducts that help protect people’s lives in many countries.“While guaranteeing domestic supply, we support qualifiedand reputable companies to export medical supplies andwe also provide convenience in terms of manufacturing,transport and customs clearance,” she told reporters at anews conference in Beijing.

In Slovakia, inaccurate results of rapid detection kitspurchased from China were due to medical personnelmisusing antigen test kits. As for the so-called defectivemasks that the Dutch government purchased from China,some masks purchased by the Netherlands are notadequate for use in intensive care units, the China Dailyreports.

Josep Borrell, High Representative of the European Unionfor Foreign Affairs and Security Policy, has called on EUcountries to stand ready for a “struggle for influence” in a“global battle of narratives” as Beijing has called itscampaign to send millions of face masks to Europe a showof solidarity and friendship. Borrell noted that the focus hadshifted from Europe helping China to the other way round.“China is aggressively pushing the message that, unlikethe U.S., it is a responsible and reliable partner.” ButEuropean Commission President Ursula von der Leyenthanked China for providing the EU with medical supplies,including 2 million surgical masks. She called it a“reciprocal” act given the EU had dispatched similarequipment to China during the start of the outbreak.

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

CHINA NEWS ROUND-UPChinese biotech companies join the raceto find a cure for Covid-19 Several Chinese biotech companies have joined the raceto find a cure for Covid-19, the South China Morning Postreports. I-Mab Biopharma will soon start clinical trialson a promising drug, while Cansino Biologics’ trial ona vaccine has been approved by Chinese authorities.Song Ruilin, Director of the China PharmaceuticalInnovation and Research Development Association, saysthe policies launched in 2008 to support development ofnew drugs are now starting to pay off.

Shen Huaqiong, CEO of I-Mab Biopharma, was flyinghome to Shanghai from New York when it was reportedthat a mysterious respiratory illness was spreading at analarming rate in Wuhan, Hubei province. Hours earlier, shewas at the New York Stock Exchange to ring the tradingbell to mark the listing of the first Chinese biotech companyin the U.S. in over two years. The company's managementdecided that something had to be done fast to get on top ofthe situation. “We closely followed the case reports fromWuhan and realized there was a correlation between theseverity of cases and the cytokine release syndrome(CRS),” Shen said. CRS is an overreaction of the immunesystem that affects one in every five patients infected withthe SARS-Cov-19 virus.

By mid-March, I-Mab filed for regulatory approval to usethe drug candidate TJM2 in clinical trials involving morethan 100 patients in the United States to treat CRS. TJM2is an antibody designed to prevent or stem progress of thedeadly disease by “neutralizing” a substance secreted byimmune cells, which plays a key role in causinginflammation and pneumonia. I-Mab is not the onlyChinese pharmaceutical company searching for acoronavirus cure. Tianjin-based Cansino Biologic saidits initial clinical trial of a vaccine candidate jointlydeveloped with the Academy of Military Medical Scienceshas been approved by Chinese regulators and has alreadybeen injected into volunteers. Previously the companydeveloped an Ebola vaccine.

China has been a major generic drug manufacturer andexporter of raw materials for the past 15 years, butinvested little in innovative drugs development untilrecently. Some 301 generics were granted marketingapproval last year. The industry produced CNY3.57 trillionof pharmaceutical products in 2018, with CNY1.71 trillion indomestic sales. Of the 51 innovative drugs approved inChina last year, 10 were locally developed, an 11%increase from 2018, the South China Morning Post reports.

China's ODI increases despite pandemicChina’s non-financial outbound direct investment(ODI) grew by 1.8% to CNY107.86 billion on a yearlybasis during the first two months of this year, theMinistry of Commerce (MOFCOM) said. During the two-month period, Chinese firms invested in 1,733 businessesin 147 countries and regions, and sent 39,000 personnelabroad to support their projects and operations, saidMinistry Spokesman Gao Feng. The bulk of the investmentwent to sectors such as leasing and commercial services,wholesale and retail, as well as manufacturing and miningbusinesses. Companies from China invested USD6.33billion in the overseas leasing and commercial servicemarkets over the past two months, up 43.2% on a yearlybasis and making it the fastest-growing sector for attractingChina’s capital. Chinese companies also investedUSD2.72 billion in 48 economies related to the Belt andRoad Initiative (BRI) in January and February, up 18.3% ona yearly basis.

China’s manufacturing sector has steadily advancedresumption of production, with 98.6% of majorindustrial firms nationwide having restarted work as ofMarch 29, the Ministry of Industry and InformationTechnology (MIIT) said. Around 89.9% of employees inindustrial companies with an annual revenue of more thanCNY20 million had returned to their posts, Xin Guobin,Vice Minister of MIIT, said. In Hubei, the average workresumption rate of industrial firms has surpassed 95%, andthe production and operation of large pharmaceuticalcompanies producing vitamins, antibiotic, antipyretic andanalgesic ingredients has returned to normal.

Chinese automakers include anti-virus tech in their carsAutomakers in China are incorporating products andtechnologies into their vehicles aimed at keeping carsvirus-free amid the Covid-19 pandemic, the ShanghaiDaily reports. Air-filter systems, antibacterial fabrics andultraviolet technology are being adopted in a bid tosafeguard the health of drivers and passengers andprovide them with a clean interior environment. Geely,China’s largest privately-owned carmaker, has announcedan investment of CNY370 million in research anddevelopment (R&D) of a vehicle with virus protection.

Geely officials said the automaker will use a new type offilter material that can achieve a filtration efficiency of morethan 95% for particles with a diameter of 0.3µm. Itsfiltration efficiency for droplets larger than 0.74µm – whichmay contain the SARS-CoV-19 virus – can reach 98%

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

CHINA NEWS ROUND-UPChinese biotech companies join the raceto find a cure for Covid-19 Several Chinese biotech companies have joined the raceto find a cure for Covid-19, the South China Morning Postreports. I-Mab Biopharma will soon start clinical trialson a promising drug, while Cansino Biologics’ trial ona vaccine has been approved by Chinese authorities.Song Ruilin, Director of the China PharmaceuticalInnovation and Research Development Association, saysthe policies launched in 2008 to support development ofnew drugs are now starting to pay off.

Shen Huaqiong, CEO of I-Mab Biopharma, was flyinghome to Shanghai from New York when it was reportedthat a mysterious respiratory illness was spreading at analarming rate in Wuhan, Hubei province. Hours earlier, shewas at the New York Stock Exchange to ring the tradingbell to mark the listing of the first Chinese biotech companyin the U.S. in over two years. The company's managementdecided that something had to be done fast to get on top ofthe situation. “We closely followed the case reports fromWuhan and realized there was a correlation between theseverity of cases and the cytokine release syndrome(CRS),” Shen said. CRS is an overreaction of the immunesystem that affects one in every five patients infected withthe SARS-Cov-19 virus.

By mid-March, I-Mab filed for regulatory approval to usethe drug candidate TJM2 in clinical trials involving morethan 100 patients in the United States to treat CRS. TJM2is an antibody designed to prevent or stem progress of thedeadly disease by “neutralizing” a substance secreted byimmune cells, which plays a key role in causinginflammation and pneumonia. I-Mab is not the onlyChinese pharmaceutical company searching for acoronavirus cure. Tianjin-based Cansino Biologic saidits initial clinical trial of a vaccine candidate jointlydeveloped with the Academy of Military Medical Scienceshas been approved by Chinese regulators and has alreadybeen injected into volunteers. Previously the companydeveloped an Ebola vaccine.

China has been a major generic drug manufacturer andexporter of raw materials for the past 15 years, butinvested little in innovative drugs development untilrecently. Some 301 generics were granted marketingapproval last year. The industry produced CNY3.57 trillionof pharmaceutical products in 2018, with CNY1.71 trillion indomestic sales. Of the 51 innovative drugs approved inChina last year, 10 were locally developed, an 11%increase from 2018, the South China Morning Post reports.

China's ODI increases despite pandemicChina’s non-financial outbound direct investment(ODI) grew by 1.8% to CNY107.86 billion on a yearlybasis during the first two months of this year, theMinistry of Commerce (MOFCOM) said. During the two-month period, Chinese firms invested in 1,733 businessesin 147 countries and regions, and sent 39,000 personnelabroad to support their projects and operations, saidMinistry Spokesman Gao Feng. The bulk of the investmentwent to sectors such as leasing and commercial services,wholesale and retail, as well as manufacturing and miningbusinesses. Companies from China invested USD6.33billion in the overseas leasing and commercial servicemarkets over the past two months, up 43.2% on a yearlybasis and making it the fastest-growing sector for attractingChina’s capital. Chinese companies also investedUSD2.72 billion in 48 economies related to the Belt andRoad Initiative (BRI) in January and February, up 18.3% ona yearly basis.

China’s manufacturing sector has steadily advancedresumption of production, with 98.6% of majorindustrial firms nationwide having restarted work as ofMarch 29, the Ministry of Industry and InformationTechnology (MIIT) said. Around 89.9% of employees inindustrial companies with an annual revenue of more thanCNY20 million had returned to their posts, Xin Guobin,Vice Minister of MIIT, said. In Hubei, the average workresumption rate of industrial firms has surpassed 95%, andthe production and operation of large pharmaceuticalcompanies producing vitamins, antibiotic, antipyretic andanalgesic ingredients has returned to normal.

Chinese automakers include anti-virus tech in their carsAutomakers in China are incorporating products andtechnologies into their vehicles aimed at keeping carsvirus-free amid the Covid-19 pandemic, the ShanghaiDaily reports. Air-filter systems, antibacterial fabrics andultraviolet technology are being adopted in a bid tosafeguard the health of drivers and passengers andprovide them with a clean interior environment. Geely,China’s largest privately-owned carmaker, has announcedan investment of CNY370 million in research anddevelopment (R&D) of a vehicle with virus protection.

Geely officials said the automaker will use a new type offilter material that can achieve a filtration efficiency of morethan 95% for particles with a diameter of 0.3µm. Itsfiltration efficiency for droplets larger than 0.74µm – whichmay contain the SARS-CoV-19 virus – can reach 98%

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

efficiency, according to the company. The material can alsoremove allergenic substances such as smoke, dust andpollen. Shanghai Automotive Industry Corp has launchedtwo products that can be installed inside a car, applyingdeep ultraviolet (DUV) technology to protect people fromviruses. One of the products, developed by SAIC’s SandenHuayu Automotive Air-Conditioning, uses a DUV deviceinside the air-conditioning system to filter and block virusesand bacteria from reaching drivers and passengers. Itpurifies and sterilizes the air in an enclosed car in minutes,the Shanghai Daily reports.

China's grade A office market under pressure from pandemicChina’s Grade A office market will come under furtherpressure from falling rents and rising vacancies, atleast in the near term, due to the Covid-19 pandemic. “Asthe Grade A office market in major cities in China wasalready under downward pressure before the novelcoronavirus outbreak, which has been hit mainly bysubdued demand and ample new supply, rentals areexpected to drop further for the duration of the outbreakand it would therefore take longer for the market tostabilize than previously anticipated,” said Daniel Yao,head of research for JLL China. “Project delays due to thevirus outbreak might help alleviate pressure in some sub-markets but overall softening demand would continue toweigh on the market in the near term.”

A report by global property consultancy Cushman &Wakefield showed gross effective rental growth forGrade A offices in Beijing, which is expected to see 2.3million square meters of new supply arrive in the two yearsthrough 2021, will fall 5.9% this year and rebound to agrowth of 2.8% in 2021. In Shanghai, about 5.9 millionsquare meters of new Grade A offices is forecast to beadded to the market by 2023. “The Covid-19 outbreak hasbeen an unprecedented event and its impact will be felt inShanghai’s office market into the near-term future,” saidShaun Brodie, Senior Director of Research at Cushman &Wakefield China. “Subsequent amplified vacancies areexpected to place further strain on citywide rental.” InBeijing and Shanghai, the vacancy rates might climb to18.4% and 22.9%, respectively, this year, up from 13.5%and 19.6% in 2019, Cushman & Wakefield data shows.

Bucking an overall bleak scenario, there are still tenantsand industries that are proving resilient to, or even thrivingamid, near-term challenges. Notably, companies offeringnecessary services during times of crisis, including healthcare and insurance as well as online entertainment, willdrive some office leasing demand in the immediate term.Such demand will probably continue expanding once thenovel coronavirus pandemic is contained and supportivegovernment policies lay the groundwork for economicrecovery, according to JLL research. The top threeindustries expected to drive office leasing demand intothe rest of the year in Shanghai are health care,professional services and the technology, media, andtelecom sectors, according to Cushman & Wakefield, asreported by Shanghai Daily.

Pudong to develop six industry clusters by 2025Six industry clusters worth CNY100 billion each will beformed by 2025, authorities in the Pudong New Areasaid. Pudong plans to develop the clusters based onits six core industries – integrated circuits, new medicine,aviation and aerospace, future cars, smart manufacturingand big data, according to a blueprint released by thearea’s Science, Technology and Economy Committee.Pudong hopes to create a world-class integrated circuitdesign industrial park based on the current two industrialbases in Zhangjiang and Lingang. It also hopes to makescientific breakthroughs in the design and manufacture oftop-end chips. By 2025, sales are expected to reachCNY400 billion, while the number of integrated circuitcompanies listed on the science and technology innovationboard is expected to double.

Pudong hopes to lead the development of tumor vaccines,cell therapy, diagnostic reagents and high-end implantablemedical devices. By 2025, biomedicine is expected to beworth over CNY200 billion. The area plans to become aninnovation heartland of biomedicine with global influence.Pudong also plays a vital role in the country’s research anddevelopment of large aircraft. It hopes to become a sourceof innovation and a pioneer in the high-end aviationindustry. The C919, China’s first domestically developednarrow-body passenger aircraft, will go into massproduction, and the CR929 passenger jet, a Sino-Russianproject, will start trial flights. By 2025, the industry isexpected to reach CNY100 billion.

The launch of Tesla’s Gigafactory has provided a catalystfor Pudong to develop “future cars.” Currently, Pudong isworking to improve the whole industrial chain andstrengthen the integration with intelligent networks, hopingto achieve a scale of CNY450 billion in the automobileindustry. Pudong is taking advantage of its shipbuildingindustries to promote mass production of cruise ships, andby 2025 it hopes to double robot manufacturing. Pudonghas the country’s first artificial intelligence application zone,and it will explore more applications.

By 2025, the revenue from software and informationservices is expected to reach CNY550 billion. By 2025, itwill have 10 large science facilities, eight in Zhangjiang andtwo in Lingang, looking for breakthroughs in photonicscience, quantum science, brain science, structural biologyand astrophysics, the Shanghai Daily reports.

China's air cargo capacity returning to normalChina's effective coronavirus containment has set thestage for the nation's air cargo capacity to rebound to pre-virus levels, as officials are encouraging airlines to usemore all-cargo freighters. The number of internationalall-cargo flights operated by Chinese and foreign airlinesis set to increase to 930 per week, nearing pre-viruslevels, Zhang Qing, an official with the Civil AviationAdministration of China (CAAC), said.

China has only 173 all-cargo aircraft now, comparedwith 550 in the U.S., according to Ren Hong, a senior

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

efficiency, according to the company. The material can alsoremove allergenic substances such as smoke, dust andpollen. Shanghai Automotive Industry Corp has launchedtwo products that can be installed inside a car, applyingdeep ultraviolet (DUV) technology to protect people fromviruses. One of the products, developed by SAIC’s SandenHuayu Automotive Air-Conditioning, uses a DUV deviceinside the air-conditioning system to filter and block virusesand bacteria from reaching drivers and passengers. Itpurifies and sterilizes the air in an enclosed car in minutes,the Shanghai Daily reports.

China's grade A office market under pressure from pandemicChina’s Grade A office market will come under furtherpressure from falling rents and rising vacancies, atleast in the near term, due to the Covid-19 pandemic. “Asthe Grade A office market in major cities in China wasalready under downward pressure before the novelcoronavirus outbreak, which has been hit mainly bysubdued demand and ample new supply, rentals areexpected to drop further for the duration of the outbreakand it would therefore take longer for the market tostabilize than previously anticipated,” said Daniel Yao,head of research for JLL China. “Project delays due to thevirus outbreak might help alleviate pressure in some sub-markets but overall softening demand would continue toweigh on the market in the near term.”

A report by global property consultancy Cushman &Wakefield showed gross effective rental growth forGrade A offices in Beijing, which is expected to see 2.3million square meters of new supply arrive in the two yearsthrough 2021, will fall 5.9% this year and rebound to agrowth of 2.8% in 2021. In Shanghai, about 5.9 millionsquare meters of new Grade A offices is forecast to beadded to the market by 2023. “The Covid-19 outbreak hasbeen an unprecedented event and its impact will be felt inShanghai’s office market into the near-term future,” saidShaun Brodie, Senior Director of Research at Cushman &Wakefield China. “Subsequent amplified vacancies areexpected to place further strain on citywide rental.” InBeijing and Shanghai, the vacancy rates might climb to18.4% and 22.9%, respectively, this year, up from 13.5%and 19.6% in 2019, Cushman & Wakefield data shows.

Bucking an overall bleak scenario, there are still tenantsand industries that are proving resilient to, or even thrivingamid, near-term challenges. Notably, companies offeringnecessary services during times of crisis, including healthcare and insurance as well as online entertainment, willdrive some office leasing demand in the immediate term.Such demand will probably continue expanding once thenovel coronavirus pandemic is contained and supportivegovernment policies lay the groundwork for economicrecovery, according to JLL research. The top threeindustries expected to drive office leasing demand intothe rest of the year in Shanghai are health care,professional services and the technology, media, andtelecom sectors, according to Cushman & Wakefield, asreported by Shanghai Daily.

Pudong to develop six industry clusters by 2025Six industry clusters worth CNY100 billion each will beformed by 2025, authorities in the Pudong New Areasaid. Pudong plans to develop the clusters based onits six core industries – integrated circuits, new medicine,aviation and aerospace, future cars, smart manufacturingand big data, according to a blueprint released by thearea’s Science, Technology and Economy Committee.Pudong hopes to create a world-class integrated circuitdesign industrial park based on the current two industrialbases in Zhangjiang and Lingang. It also hopes to makescientific breakthroughs in the design and manufacture oftop-end chips. By 2025, sales are expected to reachCNY400 billion, while the number of integrated circuitcompanies listed on the science and technology innovationboard is expected to double.

Pudong hopes to lead the development of tumor vaccines,cell therapy, diagnostic reagents and high-end implantablemedical devices. By 2025, biomedicine is expected to beworth over CNY200 billion. The area plans to become aninnovation heartland of biomedicine with global influence.Pudong also plays a vital role in the country’s research anddevelopment of large aircraft. It hopes to become a sourceof innovation and a pioneer in the high-end aviationindustry. The C919, China’s first domestically developednarrow-body passenger aircraft, will go into massproduction, and the CR929 passenger jet, a Sino-Russianproject, will start trial flights. By 2025, the industry isexpected to reach CNY100 billion.

The launch of Tesla’s Gigafactory has provided a catalystfor Pudong to develop “future cars.” Currently, Pudong isworking to improve the whole industrial chain andstrengthen the integration with intelligent networks, hopingto achieve a scale of CNY450 billion in the automobileindustry. Pudong is taking advantage of its shipbuildingindustries to promote mass production of cruise ships, andby 2025 it hopes to double robot manufacturing. Pudonghas the country’s first artificial intelligence application zone,and it will explore more applications.

By 2025, the revenue from software and informationservices is expected to reach CNY550 billion. By 2025, itwill have 10 large science facilities, eight in Zhangjiang andtwo in Lingang, looking for breakthroughs in photonicscience, quantum science, brain science, structural biologyand astrophysics, the Shanghai Daily reports.

China's air cargo capacity returning to normalChina's effective coronavirus containment has set thestage for the nation's air cargo capacity to rebound to pre-virus levels, as officials are encouraging airlines to usemore all-cargo freighters. The number of internationalall-cargo flights operated by Chinese and foreign airlinesis set to increase to 930 per week, nearing pre-viruslevels, Zhang Qing, an official with the Civil AviationAdministration of China (CAAC), said.

China has only 173 all-cargo aircraft now, comparedwith 550 in the U.S., according to Ren Hong, a senior

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

official from the National Development and ReformCommission (NDRC). The 173 aircraft only account for4.5% of China's civil aviation fleet. There are 10 all-cargoairlines, out of 55 airlines, in China. There are apparentweak links in the country's international air cargo capacity,according to the Chinese government. Air cargo carried inthe holds of international passenger aircraft has taken abig hit from the coronavirus outbreak, weighing oninternational supply chains of China's industries, accordingto an executive meeting of the Chinese government, whichurged efforts to boost the country's international air cargocapacity. The number of all-cargo freighters owned by thecountry's three major cargo carriers – China PostalAirlines, SF Airlines, and YTO Express Airlines – has nowreached 100, said Jin Jinghua, Director of the Policy andRegulation Department of the State Post Bureau, thecountry's postal service regulator.

China shipped more than 2.1 billion parcels and expresspackages overseas in 2019 mostly via air cargo, weighing750,000 tons, according to Jin. Homegrown cargo airlineSF Airlines has the country's largest all-cargo fleetwith 61 all-cargo freighters, which transported over 90%of N95 respirators to Hubei province, Ren revealed.

In another sign of ramped-up efforts, China's first all-cargo airport being built in Ezhou in Hubei province isplanned to be put into operation as early as the end of nextyear. Construction of the airport began in the second halfof 2019 but faced some delays due to the virus epidemic,although it has recommenced, the Global Times reports.The country will also accelerate the construction of othercargo airports during the 14th Five Year Plan period (2021-25) since the outbreak has exposed the country’s lack ofcargo airports and cargo aircraft. While the passengerthroughput of the country’s 235 airports grew 6.9% year-on-year to 1.35 billion last year, freight volume rose just2.1% to 17.1 million tons.

Shanghai fourth in ranking of top global financial centersIn the latest edition of the Global Financial CentersIndex, co-published by the China Development Institute inShenzhen and Z/Yen Partners, a London-based marketresearch company, Shanghai ranks fourth, overtakingHong Kong and Singapore. New York retained its top spot,extending its lead over London from 17 to 27 points,although the ratings for both centers dropped by more than20 points. Tokyo moved up three places to third, withShanghai only one point behind. Singapore and HongKong both fell, to fifth and sixth place, respectively.Geneva, Los Angeles and San Francisco entered the top10, easing out Dubai, Shenzhen and Sydney. Performanceacross the index showed a high level of volatility, with 26centers rising 10 or more places in the rankings and 23falling 10 or more spots.

The mean of the top five Asia-Pacific centers remainshigher than other regions. North America is still fractionallyahead of Western Europe. The top centers in other regionscontinue to narrow the gap with leading regions. Asia-Pacific centers had a downbeat performance with 15centers falling in the rankings and 10 rising. This year’ssurvey introduced questions looking directly at fintech and

for the second time included a separate index rankingfinancial centers as competitive places for fintech. In thissector, Chinese and U.S. centers featured strongly,reflecting their focus on technology development, thereport said. New York leads the fintech rankings, followedby Beijing, Shanghai, London and Singapore. Five of thetop 10 centers for fintech are in China.

The index is compiled using 138 instrumental factors in fivebroad areas of competitiveness, namely businessenvironment, human capital, infrastructure, financial sectordevelopment and reputation, the Shanghai Daily reports.

Huawei working around the clock to develop its own technologyHuawei Founder Ren Zhengfei says Huawei is ‘workinground the clock’ amid the coronavirus pandemic toweather U.S. sanctions and to develop its owntechnology in order to remain the world's largest telecomequipment supplier. While the coronavirus pandemic mayhave forced many companies in China and around theworld to pause business operations, engineers at HuaweiTechnologies have been working around the clock tocombat the crisis. Huawei has been motivated by a senseof mission, Ren Zhengfei said in and interview with theSouth China Morning Post. “Over 20,000 scientists,experts and engineers worked overtime during the LunarNew Year holiday, because we are racing to develop newtechnology,” he said. “The U.S. will continue to increasesanctions on us, and we will have to complete newtechnologies before that happens,” Ren, 75, said in a videointerview from his Shenzhen office.

The U.S. has put Huawei on an Entity List, which restrictsHuawei’s ability to buy hardware, software and servicesfrom its American hi-tech suppliers without approval fromthe U.S. government. This includes Google mobileservices, used on its handsets for international markets,and key components in its next-generation mobile networkbase stations. While the U.S. has since granted five licenseextensions to Huawei that allowed it temporary access toAmerican suppliers, U.S. President Trump earlier thismonth signed legislation to bar the country’s telecomscarriers from using U.S. subsidies to purchase networkequipment from Huawei. The Trump administration hasalso continued to urge its allies in Europe to ditch Huaweiin their 5G mobile network development plans.

“It’s not a problem for us to survive as a company, but it’squestionable whether we can keep our leading position,”Ren said. “We won’t be able to lead the world in thenext three to five years if we cannot develop our owntechnology.” Huawei will step up its investment inresearch and development (R&D), with the 2020 budgetsurpassing USD20 billion, up from USD15 billion last year,according to Ren. However, he also noted that a completede-Americanization would be “impossible” for Huawei.“U.S. firms will also need Huawei as a client to survive,”Ren said. Huawei’s Founder is confident the company canpull through the coronavirus crisis. “Neither the U.S.sanctions nor the pandemic had a major impact on us,”and Huawei has resumed more than 90% of its productionand development operations, Ren said, as reported by theSouth China Morning Post.

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

official from the National Development and ReformCommission (NDRC). The 173 aircraft only account for4.5% of China's civil aviation fleet. There are 10 all-cargoairlines, out of 55 airlines, in China. There are apparentweak links in the country's international air cargo capacity,according to the Chinese government. Air cargo carried inthe holds of international passenger aircraft has taken abig hit from the coronavirus outbreak, weighing oninternational supply chains of China's industries, accordingto an executive meeting of the Chinese government, whichurged efforts to boost the country's international air cargocapacity. The number of all-cargo freighters owned by thecountry's three major cargo carriers – China PostalAirlines, SF Airlines, and YTO Express Airlines – has nowreached 100, said Jin Jinghua, Director of the Policy andRegulation Department of the State Post Bureau, thecountry's postal service regulator.

China shipped more than 2.1 billion parcels and expresspackages overseas in 2019 mostly via air cargo, weighing750,000 tons, according to Jin. Homegrown cargo airlineSF Airlines has the country's largest all-cargo fleetwith 61 all-cargo freighters, which transported over 90%of N95 respirators to Hubei province, Ren revealed.

In another sign of ramped-up efforts, China's first all-cargo airport being built in Ezhou in Hubei province isplanned to be put into operation as early as the end of nextyear. Construction of the airport began in the second halfof 2019 but faced some delays due to the virus epidemic,although it has recommenced, the Global Times reports.The country will also accelerate the construction of othercargo airports during the 14th Five Year Plan period (2021-25) since the outbreak has exposed the country’s lack ofcargo airports and cargo aircraft. While the passengerthroughput of the country’s 235 airports grew 6.9% year-on-year to 1.35 billion last year, freight volume rose just2.1% to 17.1 million tons.

Shanghai fourth in ranking of top global financial centersIn the latest edition of the Global Financial CentersIndex, co-published by the China Development Institute inShenzhen and Z/Yen Partners, a London-based marketresearch company, Shanghai ranks fourth, overtakingHong Kong and Singapore. New York retained its top spot,extending its lead over London from 17 to 27 points,although the ratings for both centers dropped by more than20 points. Tokyo moved up three places to third, withShanghai only one point behind. Singapore and HongKong both fell, to fifth and sixth place, respectively.Geneva, Los Angeles and San Francisco entered the top10, easing out Dubai, Shenzhen and Sydney. Performanceacross the index showed a high level of volatility, with 26centers rising 10 or more places in the rankings and 23falling 10 or more spots.

The mean of the top five Asia-Pacific centers remainshigher than other regions. North America is still fractionallyahead of Western Europe. The top centers in other regionscontinue to narrow the gap with leading regions. Asia-Pacific centers had a downbeat performance with 15centers falling in the rankings and 10 rising. This year’ssurvey introduced questions looking directly at fintech and

for the second time included a separate index rankingfinancial centers as competitive places for fintech. In thissector, Chinese and U.S. centers featured strongly,reflecting their focus on technology development, thereport said. New York leads the fintech rankings, followedby Beijing, Shanghai, London and Singapore. Five of thetop 10 centers for fintech are in China.

The index is compiled using 138 instrumental factors in fivebroad areas of competitiveness, namely businessenvironment, human capital, infrastructure, financial sectordevelopment and reputation, the Shanghai Daily reports.

Huawei working around the clock to develop its own technologyHuawei Founder Ren Zhengfei says Huawei is ‘workinground the clock’ amid the coronavirus pandemic toweather U.S. sanctions and to develop its owntechnology in order to remain the world's largest telecomequipment supplier. While the coronavirus pandemic mayhave forced many companies in China and around theworld to pause business operations, engineers at HuaweiTechnologies have been working around the clock tocombat the crisis. Huawei has been motivated by a senseof mission, Ren Zhengfei said in and interview with theSouth China Morning Post. “Over 20,000 scientists,experts and engineers worked overtime during the LunarNew Year holiday, because we are racing to develop newtechnology,” he said. “The U.S. will continue to increasesanctions on us, and we will have to complete newtechnologies before that happens,” Ren, 75, said in a videointerview from his Shenzhen office.

The U.S. has put Huawei on an Entity List, which restrictsHuawei’s ability to buy hardware, software and servicesfrom its American hi-tech suppliers without approval fromthe U.S. government. This includes Google mobileservices, used on its handsets for international markets,and key components in its next-generation mobile networkbase stations. While the U.S. has since granted five licenseextensions to Huawei that allowed it temporary access toAmerican suppliers, U.S. President Trump earlier thismonth signed legislation to bar the country’s telecomscarriers from using U.S. subsidies to purchase networkequipment from Huawei. The Trump administration hasalso continued to urge its allies in Europe to ditch Huaweiin their 5G mobile network development plans.

“It’s not a problem for us to survive as a company, but it’squestionable whether we can keep our leading position,”Ren said. “We won’t be able to lead the world in thenext three to five years if we cannot develop our owntechnology.” Huawei will step up its investment inresearch and development (R&D), with the 2020 budgetsurpassing USD20 billion, up from USD15 billion last year,according to Ren. However, he also noted that a completede-Americanization would be “impossible” for Huawei.“U.S. firms will also need Huawei as a client to survive,”Ren said. Huawei’s Founder is confident the company canpull through the coronavirus crisis. “Neither the U.S.sanctions nor the pandemic had a major impact on us,”and Huawei has resumed more than 90% of its productionand development operations, Ren said, as reported by theSouth China Morning Post.

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

Your banner at the FCCC website or newsletterCompanies interested in posting a banner/anadvertisement on the FCCC website or FCCC weeklynewsletter are kindly invited to contact the FCCC at:info@flanders-china.be

Organisation and founding members of theFlanders- China Chamber of CommerceChairmanMr. Stefaan Vanhooren, President Agfa Graphics,Member of the Executive Committee of the Agfa GevaertGroup, NV THE AGFA-GEVAERT GROUP SA

Vice-ChairmenMr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Philippe Van der Donckt, Director Government AffairsAsia, NV UMICORE SA

Secretary and TreasurerWim Eraly, Senior General Manager, NV KBC Bank SA

Executive DirectorMs. Gwenn Sonck

Members of the Board of Directors and FoundingMembers:Mr. Stefaan Vanhooren, President Agfa Graphics, Memberof the Executive Committee of the Agfa Gevaert Group, NVTHE AGFA-GEVAERT GROUP SAMr. Carl Peeters, Chief Financial Officer, NV AHLERS SAMr. Filip Pintelon, Senior Vice President, GM Healthcare, NV BARCO SAMr. Philip Eyskens, General Counsel, Senior Vice

President Legal IP GRC, NV BEKAERT SAMr. Philip Hermans, General Manager, NV DEME SAMr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Wim Eraly, Senior General Manager, KBC Bank SAMr. Johan Verstraete, Vice-President Marketing, Sales &Services Weaving Solutions, NV PICANOL SAMr. Philippe Van der Donckt, Director Government AffairsAsia, NV UMICORE SA

Membership rates for 2019 (excl. VAT)● SMEs: €405 (€490.05 incl. VAT)● Large enterprises: €1,025 (€1,240.25 incl. VAT)

ContactFlanders-China Chamber of CommerceOffice: Ajuinlei 1, B-9000 Gent, BelgiumNew telephone and fax numbers:T ++32/9/269.52.46F ++32/9/269.52.99E info@flanders-china.beW www.flanders-china.be

Share your storyTo send your input for publication in a future newslettermail to: info@flanders-china.be The FCCC Newsletters are edited by Michel Lens,who is based in Beijing and can be contacted by e-mailmichel.jc.lens@gmail.com

Disclaimer: the views expressed in this newsletter are notnecessarily those of the FCCC or its Board of Directors.

FCCC-VCKK – CHINA BUSINESS WEEKLY 1 APRIL 2020

Your banner at the FCCC website or newsletterCompanies interested in posting a banner/anadvertisement on the FCCC website or FCCC weeklynewsletter are kindly invited to contact the FCCC at:info@flanders-china.be

Organisation and founding members of theFlanders- China Chamber of CommerceChairmanMr. Stefaan Vanhooren, President Agfa Graphics,Member of the Executive Committee of the Agfa GevaertGroup, NV THE AGFA-GEVAERT GROUP SA

Vice-ChairmenMr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Philippe Van der Donckt, Director Government AffairsAsia, NV UMICORE SA

Secretary and TreasurerWim Eraly, Senior General Manager, NV KBC Bank SA

Executive DirectorMs. Gwenn Sonck

Members of the Board of Directors and FoundingMembers:Mr. Stefaan Vanhooren, President Agfa Graphics, Memberof the Executive Committee of the Agfa Gevaert Group, NVTHE AGFA-GEVAERT GROUP SAMr. Carl Peeters, Chief Financial Officer, NV AHLERS SAMr. Filip Pintelon, Senior Vice President, GM Healthcare, NV BARCO SAMr. Philip Eyskens, General Counsel, Senior Vice

President Legal IP GRC, NV BEKAERT SAMr. Philip Hermans, General Manager, NV DEME SAMr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Wim Eraly, Senior General Manager, KBC Bank SAMr. Johan Verstraete, Vice-President Marketing, Sales &Services Weaving Solutions, NV PICANOL SAMr. Philippe Van der Donckt, Director Government AffairsAsia, NV UMICORE SA

Membership rates for 2019 (excl. VAT)● SMEs: €405 (€490.05 incl. VAT)● Large enterprises: €1,025 (€1,240.25 incl. VAT)

ContactFlanders-China Chamber of CommerceOffice: Ajuinlei 1, B-9000 Gent, BelgiumNew telephone and fax numbers:T ++32/9/269.52.46F ++32/9/269.52.99E info@flanders-china.beW www.flanders-china.be

Share your storyTo send your input for publication in a future newslettermail to: info@flanders-china.be The FCCC Newsletters are edited by Michel Lens,who is based in Beijing and can be contacted by e-mailmichel.jc.lens@gmail.com

Disclaimer: the views expressed in this newsletter are notnecessarily those of the FCCC or its Board of Directors.