China Brief: 19-25 March 2019

A2 Global's China Brief contains assessments of events and policies that may impact commercial interests, personnel, and assets throughout Greater China. This edition includes strained Sino-Indian as well as Sino-Swedish relations, a chemical blast in Jiangsu province, and cases of measles in Hong Kong. 

Hong Kong - Health risk: Minor - Cluster of measles cases reported at territory's airport 

China - Travel risk: Medium - Chemical plant explosion heightens travel and operational risks 

China & Sweden -  Sweden to grant China's Uyghurs refugee status 

China & India-  Indian traders burn Chinese goods in protest over foreign policy

Hong Kong – Cluster of measles cases reported at territory’s airport

HONG KONG â€“ Health risk: Minor

25 March: At least 20 cases of measles have been recorded in Hong Kong this year, with a significant cluster among staff at Hong Kong International Airport (HKG), it was reported on 25 March. The recorded cases include a pilot with Cathay Pacific Airways, as well as a member of the airport’s security staff and two baggage handlers. Hong Kong had virtually eliminated measles in 2016, largely through a comprehensive vaccination programme among local children. Many of the current cases appear to have been contracted outside the territory.

Why it matters: A2 Global notes Hong Kong’s medical authorities have extensive experience of dealing with contagious disease outbreaks, much of it gathered during the 2003 severe acute respiratory syndrome (SARS) outbreak that killed almost 300 people in the territory. If the current measles outbreak continues to spread among the hundreds of thousands of workers and residents who may not have been vaccinated against the disease, the authorities may impose stringent border health checks or require proof of immunisation. Companies should ensure their staff either have been vaccinated or are offered the opportunity to be immunised against measles. Symptoms of the highly contagious disease include high fever, coughing, red eyes, and a red blotchy skin rash. More information on the disease is available on this website.

China – Chemical plant explosion heightens travel and operational risks

CHINA – Travel risk: Medium

22 March: At least 47 people were killed and 640 others injured following an explosion at a chemical plant in Yancheng, a city in the eastern-central Jiangsu province, on 21 March. The blast, which caused localised fires – which have since been contained – and triggered a minor tremor, destroyed buildings around the site and damaged residential homes as far as 4km away, trapping people inside. President Xi Jinping, who is currently on a visit to Italy, has ordered for rescue efforts and a bolstering of government inspection procedure. An investigation into the cause of the explosion is underway.

Why it matters: The explosion follows similar accidents related to chemical plants in China, often linked to lax implementation of industrial safety regulations. In August 2015, two chemical blasts in the northern city of Tianjin killed at least 165 people and injured 798, while in November 2018, a gas leak at a plant in the northern city of Zhangjiakou killed 24 and injured 21 others. A2 Global advises business travellers to monitor the situation for updates, follow instructions from local authorities, and avoid the area around the blast site as a precaution. To avoid reputational damage, businesses are reminded to ensure the maintenance of compliance procedures and implementation of due diligence when engaging with third parties. Companies sourcing products from China are advised to factor in the risk of industrial accidents into their strategic planning.

China & Sweden – Sweden to grant China’s Uyghurs refugee status

21 March: On 21 March, there has been widespread media coverage of the Swedish Migration Board’s announcement on 18 March that Sweden will grant China’s Uyghurs refugee status. In September 2018, scrutiny by international media concerning Sweden’s refusal to grant a Chinese Uyghur family asylum led to the board launching an investigation into the situation of China’s Uyghurs.

Why it matters: The decision marks a worsening of Sino-Swedish relations in the one-month outlook. These were already strained by a diplomatic row in September 2018, caused by the forced eviction of Chinese tourists from a hotel in Sweden following a dispute with staff. A Swedish government source alleged that the row was related to Sweden and the E.U.’s repeated calls for China’s release of an ethnically Chinese Swedish national and Hong Kong-based book seller detained in January 2018.

A2 Global advises Swedish companies operating in China, especially retailers, to factor in possible reprisals from Chinese consumers by reviewing security and operational procedures. Reprisals could include boycotts or even violent protests such as the 2012 anti-Japanese protests, in which Japanese cars were damaged, over an escalation in the Senkaku/Diaoyu Islands territorial dispute.

China & India – Indian traders burn Chinese goods in protest over foreign policy

20 March: On 19 March, traders in the capital New Delhi and several other Indian cities protested against China’s trade and foreign policies by burning Chinese goods in the street and urging consumers to boycott Chinese products. The protest was called after China on 13 March vetoed a U.N. Security Council resolution to blacklist Masood Azhar, founder of the Jaish-e-Mohammed (JeM) militant group. JeM claimed responsibility for the 14 February suicide attack that killed more than 40 paramilitary police in Pulwama, in the northern state of Jammu and Kashmir.

Why it matters: Prime Minister Narendra Modi’s tenure has seen an increase in a trade deficit in favour of China, and Modi has been criticised for failing to curb the influence of Chinese companies on India’s economy. Furthermore, Sino-Indian relations have become increasingly strained since the Pulwama attack, due to China’s close strategic relationship with Pakistan. Heightened anti-Chinese sentiment brings a risk of reprisals against staff and interests. A2 Global therefore advises businesses to be aware of the heightened security risks that ethnically Chinese staff and travellers face in the country. Logistics managers of businesses that source Chinese products should monitor the situation for further updates and adjust their supply chains accordingly.