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Emerging Markets Daily - March 16
China Warns Tech 'Platform' Firms, Singapore Air Cautiously Optimistic, Tensions Rise in East China Sea, Nigeria Unemployment Hits 33%, US Oil to India Rising
The Top 5 Emerging Markets Stories from Global Media - March 16
President Xi Warns China’s Tech “Platform” Companies
“China’s top leader warned that Beijing will go after so-called ‘platform’ companies that have amassed data and market power, a sign that the months-long crackdown on the country’s internet sector is only just beginning.”
“President Xi Jinping on Monday chaired a meeting of the communist party’s top financial advisory and coordination committee, ordering regulators to step up oversight of internet companies, crack down on monopolies, promote fair competition and prevent the disorderly expansion of capital, according to state broadcaster CCTV…”
“The unusually strongly worded comments from Xi and his lieutenants suggest Beijing is preparing to amplify a campaign to curb the influence of its largest and most powerful private corporations, which has so far centered mainly on Jack Ma’s Alibaba Group Holding Ltd. and its affiliate Ant Group Co. The term platform economies could apply to a plethora of mobile and internet giants that offer services to hundreds of millions, from ride-hailing behemoth Didi Chuxing to food delivery giant Meituan and e-commerce leaders like JD.com Inc. and Pinduodo Inc.” Bloomberg reports.
Singapore Airlines Expresses “Cautious Optimism” For Recovery
“Singapore Airlines (SIA) Group’s overall passenger carriage for February fell by 96.6 per cent year-on-year, as demand for air travel continued to be ‘severely dampened’ due to COVID-19.”
“But the group sounded a note of optimism in light of the global vaccination drive, especially in its main markets. ‘The growing pace of vaccinations ... supports cautious optimism for a measured recovery in the demand for air travel in the second half of 2021,’ the group said as it announced its February operating results on Monday (Mar 15).”
“Passenger carriage, measured in revenue passenger-kilometres, for SIA was down by 96 per cent year-on-year in February, while SilkAir's passenger carriage fell 97.3 per cent year-on-year. Budget carrier Scoot saw its passenger carriage fall by 98.8 per cent year-on-year.”
“The SIA Group expects to see ‘a calibrated expansion of the passenger network’ in the coming months, it said. The group expects its passenger capacity to be around 26 per cent of pre-COVID-19 levels by May. SIA will reinstate scheduled passenger services to Tokyo this month and offer parallel services to Taipei alongside Scoot from April, the group said. SilkAir will re-introduce services to Cebu this month.” Channel News Asia reports.
Geopolitics - China, Japan Tensions Rising in East China Sea
“Beijing has told Tokyo that China is ‘exercising self-restraint’ in operating its coast guard ships near the Senkaku Islands amid rising security concerns over its new law that allows such ships to use weapons against foreign vessels, Japanese government sources said.”
“Tokyo has regularly criticized the presence of Chinese coast guard vessels spotted around the Japanese-controlled, Chinese-claimed islands in the East China Sea before and after the new law took effect on Feb. 1, saying that the islands are Japan’s inherent territory.”
“Still, Beijing said it will not stop its actions to prevent Japanese vessels from entering the waters around the islets, including the so-called contiguous zone outside Japanese waters, as it conveyed its policy under the new law for the first time. Japan responded that China’s claim is unacceptable and maintained there exists no issue of territorial sovereignty to be resolved over the islands.”
“The law explicitly allows the China Coast Guard to use weapons against foreign ships it sees as illegally entering Chinese waters and raised concerns that the legislation would target Japanese vessels navigating around the uninhabited islets called Diaoyu in Chinese…”
“The U.S. Defense Department last month criticized Beijing’s activities in waters near the islets, while expressing ‘support’ for Japan on the issue. Japanese government officials in late February confirmed their interpretation of existing laws under which Japan Coast Guard vessels could use weapons against foreign ships aiming to land on the islands.” Japan Times reports.
Nigeria Unemployment Hits 33%, Second Highest on Bloomberg List
“Unemployment in Africa’s largest economy surged to the second highest on a global list of countries monitored by Bloomberg. The jobless rate in Nigeria rose to 33.3% in the three months through December, according to a report published by National Bureau of Statistics on its website Monday. That’s up from 27.1% in the second quarter of 2020, the last period for which the agency released labor-force statistics.”
“A third of the 69.7 million-strong labor force in Africa’s most-populous nation either did nothing or worked for less than 20 hours a week, making them unemployed, according to the Nigerian definition. Another 15.9 million worked less than 40 hours a week, making them underemployed.”
“The oil producer surpassed South Africa on a list of 82 countries whose unemployment rates are tracked by Bloomberg. Namibia still leads the list with 33.4%.”
“Nigeria’s jobless rate has more than quadrupled over the last five years as the economy went through two recessions, casting a shadow over the efforts to implement policies to drive growth and create jobs by President Muhammadu Buhari’s administration.”
“The lack of jobs adds to pressure on consumers in a country where food prices rose more than 20% year-on-year in January and authorities struggle to bring insecurity driven by violent insurgency attacks and kidnappings under control. Nigeria’s finances were knocked by last year’s drop in the price of oil, whichaccount for 90% of foreign-exchange earnings and about half of government income.” Bloomberg reports.
US Tops Saudi Arabia as India’s Second Largest Oil Supplier in February
“The United States overtook Saudi Arabia as India’s second biggest oil supplier after Iraq last month, as refiners boosted cheaper U.S. crude purchases to record levels to offset OPEC+ supply cuts, data from trade sources showed.”
“The switch in supplies, triggered by lower U.S. crude demand, coincided with Saudi Arabia’s voluntary extra 1 million barrel per day (bpd) output cut, on top of an agreement by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to maintain lower production.”
“India’s imports from the United States - the world’s top producer - rose 48% to a record 545,300 bpd in February from the prior month, accounting for 14% of India’s overall imports last month, the data obtained by Reuters showed.”
“Iraq continued to be the top oil seller to India despite a 23% drop in purchases to a five-month low of 867,500 bpd, the data showed. The UAE slipped to fifth position from third in January, while Nigeria rose to third from fifth, exporting 472,300 bpd, the most since Oct 2019.” Reuters reports.