Breakfast briefing: China piles the pressure on Australia

Retail sales slide in the US and record layoffs, lowest hiring levels; Japan machine tool orders stay very low; China kneels on Australia harder; UST 10yr yield at 0.83%; oil unchanged and gold up; NZ$1 = 65.2 USc; TWI-5 = 69.8

10th Jun 20, 7:23am by David Chaston

Here's our summary of key economic events overnight that affect New Zealand, with news China is ramping up its pressure on Australia.

But first, American retail sales are sliding backwards by the week. The latest Johnson Redbook data for last week shows them down almost -10% lower year-on-year and -3.2% month-on-month, both faster paces of decline. And given that American retail sales run close to US$½ tln per month, even a -1% slip has an enormous global knock-on impact.

New data for American company layoffs ("separations" in officialese) shows them at -9.9 mln in April, the second highest level ever recorded. The same data reports that only 3.5 mln people were hired in April, the lowest monthly total ever recorded in a series that goes back twenty years.

And an indication of just how kneecapped the US economy is, Boeing delivered just four airplanes in May.

A fourth "phase" of fiscal stimulus is on the cards on the US. But there is no agreement yet on its form.

In China, surging infrastructure stimulus is still bringing surging equipment sales for machines like excavators, which were up almost +70% year-on-year in May.

Preliminary data on Japanese machine tool orders released late yesterday were very tough, down more than -50% from May a year ago and worse than the April result. This is a key global measure of private factory investment intentions.

Last week we reported that China had issued a travel advisory to its citizens to avoid Australia. Now it has extended that warning specifically to students, saying they face increasing discrimination against people of Asian descent. And these warnings come as the Chinese ambassador earlier threatened a consumer boycott of Australian consumer products.

Meanwhile, Australian business confidence levels improved in May but remain deeply negative. The employment sub-sector is now the weakest part of this survey.

The latest compilation of Covid-19 data is here. The global tally is now 7,122,900 which is up +57,000 in a day, and a slower rising pace. But it is compromised now because of Brazil's refusal to release updated data. Global deaths now exceed 408,000.

Under 28% of all cases globally are in the US, which is up +17,000 since this time yesterday to 1,968,200. This is also a slower rate of increase. US deaths now exceed 111,000.

In Australia, there have been 7267 cases (+2 since yesterday), 102 deaths (unchanged) and a recovery rate of just over 92% (unchanged). 19 people are in hospital there (unchanged) with 2 in ICU (-1). There are now 445 active cases in Australia (-12).

Wall Street is down -0.5% today although that is a recovery from a steeper earlier drop. Overnight, European markets fell nearly -1.5% (London was down more than -2%). Yesterday Asian markets were mixed with good gains in Hong Kong and Shanghai, but a decline in Tokyo. The ASX200 posted a very healthy +2.4% rise while the NZX50 went the other way, shedding nearly -2%.

The UST 10yr yield is down -5 bps at 0.83%. Their 2-10 curve has flattened off a bit to +62 bps. Their 1-5 curve is also flatter at +22 bps, but their 3m-10yr curve is steeper at +68 bps. The Aussie Govt 10yr yield is down -6 bps to 1.04%. The China Govt 10yr is down marginally, by -1 bp to 2.85%. And the NZ Govt 10 yr yield is lower as well, down -6 bps to 0.96%.

The gold price is higher again today, rising by another +US$17 to US$1,715/oz.

Oil prices are little-changed today. They are still at just on US$38/bbl in the US. The Brent price is down to just on US$40.50/bbl.

And the Kiwi dollar is also little-changed, if anything slightly softer. We are now just on 65.2 USc. On the cross rates we are at 93.6 AUc. Against the euro we have are lower at 57.5 euro cents. That means our TWI-5 has dipped to 69.8.

Bitcoin is virtually unchanged US$9,719. The bitcoin rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Our currency charts are here.

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105 Comments

by Gatoperro | 10th Jun 20, 7:33am 1591731224

TASK 1 for the Labor PR machine was clear cut. Covid -19 bad. Well done.

We may have seen the first of TASK 2 yesterday with Jacindas comments on the Wharehouse job losses and Air NZ. That is looking like something out of the Winston playbook. Blame and distancing.

TASK 3 is going to be more challenging. We have Australia with 445 active cases and are talking about a travel bubble. China reports 58 active cases. Can we bubble with Australia and not China? In the political sand pit we don’t want to get hit on the head with a plastic shovel like Australia did so will Labor say no to both until after the election?

by Newbie | 10th Jun 20, 8:09am 1591733341

China has significantly less number of confirmed cases than any countries in the world including NZ.
You just have to believe their words.

by Foyle | 10th Jun 20, 8:22am 1591734138

Yeah, China has beaten wuflu through the magic of not reporting it.

by VeryInterested | 10th Jun 20, 8:26am 1591734402

Ah yes the Brazilian tactic.

by CJ099 | 10th Jun 20, 10:26am 1591741565

Yes and it's good to see the Brazilian people have stood firm to restore a website that lists the full data on Covid-19 in the country.
BBC Coronavirus: Brazil resumes publishing Covid-19 data after court ruling. https://www.bbc.com/news/world-latin-america-52980642

" The health ministry stopped releasing cumulative totals for deaths and cases on Saturday, provoking uproar. Brazil has the world's second-highest number of cases - and has now more daily deaths than any other nation."

by Logicthinker | 10th Jun 20, 10:30am 1591741843

Read Rick Scott - a future Republican presidential candidate - comments in his article about China in the Sydney Morning Herald. He basically says they dont care about anybody else but themselves across all aspects and applauds Scott Morrison/Australia for their stand against China.

by Pietro | 10th Jun 20, 4:58pm 1591765081

Something going on between the US and Australia, it seems. What price an alliance of Western nations?

by HeavyG | 10th Jun 20, 9:01am 1591736509

Just test travellers coming in from China the same as China tests travellers entering China. If China's claims of elimination are legit then should be no cases. All incoming travellers should be tested going forward and non-bubble country arrivals will also need quarantine. The monetary benefits outweigh the small and manageable risk.

by Mrs The Point | 10th Jun 20, 12:01pm 1591747312

by Mr T | 10th Jun 20, 9:07am 1591736878

ICYMI: Analysis of hospital traffic and search engine data in Wuhan China indicates early disease activity in August of last year, Harvard research shows https://dash.harvard.edu/handle/1/42669767

by Logicthinker | 10th Jun 20, 8:48am 1591735729

Cindy can bash The Warehouse for taking the 65M but she didn't make them a preferred supplier of essential products like the supermarkets at the start of the pandemic. The Warehouse management may have got ahead of themselves by saying they would be a provider which anoyed the government but they should have looked above this and granted them to be a provider. As a consequence, the government is upset they are now rationalizing there business activity but there are other major companies that are going down the same path.
Do not underestimate China on its perseverance of obtaining land and economic grab on coutries in our region. It has the political mite and military capability of taking control of whoever they like until they come up with the USA. Lets hope we can sign a deal with the British government in the short term.

by oldbloke1 | 10th Jun 20, 9:00am 1591736446

"Preferred supplier" rubbish! The lockdown was set up to prevent interpersonal contact, and part of that is restricting places where people might mix. It was necessary to allow food to be bought, so some shops had to be open. A large retailer supplying almost everything gives the simplest control of contacts.

by profile | 10th Jun 20, 9:30am 1591738209

Plenty of businesses without interpersonal contact were shut down. That was why the word "essential" was used not "safe". Jacinda getting angry speaks volumes about her understanding of the situation. She could have saved herself a lot of anger, and pain, if she had shut the borders when she was advised to by the MoH.

by oldbloke1 | 10th Jun 20, 9:44am 1591739071

I think your ideological biases blind you to the complexity of the situation the government found itself in.

by profile | 10th Jun 20, 10:34am 1591742094

Given the government of the day can't handle the complexity of building a few houses Cindy must have had Feelz set to 11 to ignore the MoH advice to shut the border.

by General HubHub | 10th Jun 20, 2:05pm 1591754721

Haha haha frothing at the mouth vitriol, because of Jacinda’s competence and success in leading the country through another major crisis... priceless

by sit23 | 10th Jun 20, 6:41pm 1591771317

Hindsight is starting to show and will show more, the Chinese CP's total duplicity, completely backed up by the WHO, in the handling of their Wuhan lab-leaked virus accident. No wonder other governments have all been accused of shutting down borders too soon/not quick enough. Forcing business owners to shut too soon/not soon enough, and forcing us to socially isolate too soon/ not soon enough. But the past is difficult to predict, so I suspect the truth will still take a while to come out, and we will have to take our pick of who's version is the truthful one.

by bloodymigrant | 10th Jun 20, 1:12pm 1591751533

Agree with you. 100 %

by Logicthinker | 10th Jun 20, 9:40am 1591738819

The Warehouse only wanted to sell supermarket products and so close off their other non-essential product departments. It certainly would have given the market, at that time, a more competitive edge to the supermarket chains. As a consequence, we may have seen them reduce their pricing of products rather than the price gauging that occurred.

by oldbloke1 | 10th Jun 20, 11:19am 1591744775

Have you seen the grocery lines sold at The Warehouse? They would have added very little to available stocks, while increasing the risk of transmission. I think, too, you mean "price gouging" - I didn't notice this - have you examples?

by Logicthinker | 10th Jun 20, 3:42pm 1591760523

Well, there certainly wasn't any discounting in regard to specials or do you believe there stocks ran at such levels that they couldn't afford to discount. Every relative commentator from Cindy to the Warehouse staff at the supermarket chains said there was no problems with the supply of all products.

by AKLCrusader | 10th Jun 20, 9:31am 1591738270

How many hundreds of millions of dollars did the warehouse lose in turnover during lockdown? 3.1bn revenue so potentially 500m-600m+ in lost revenue.
I didn't expect them to be an essential business and operate, but also not surprised that they have had to take a seat once the music stopped. Jacinda's 'outrage' was pure politics, naive and super ignorant. The exact reasons why business confidence is low and we don't trust her.
Was it on Fantasy Island that they said "The plan, the plan, the plan......."? We're waiting Jacinda.

by linklater01 | 10th Jun 20, 3:19pm 1591759162

Logicthinker,

'Sign a deal with the British government'. On what precisely? This bunch are about as untrustworthy as you could get(excl Trump of course). Despite an absolute assurance that US chlorinated chicken would not be allowed in, they are now backsliding and will not rule it out.

by Noncents | 10th Jun 20, 9:23am 1591737802

Task 4 is how you deal with AirNZ. The refund issue is unlikely to go away.

As a Government owned airline they have a far greater duty of care to their customers.

by J.C. | 10th Jun 20, 9:28am 1591738138

As a Government owned airline they have a far greater duty of care to their customers.

First world problem. Anyway, what happened to 'Team NZ'? Shouldn't the customer also take one on the chin?

by murray86 | 10th Jun 20, 9:43am 1591738980

I really believe in what Air NZ has achieved and am very proud of them. BUT, a ticket is essentially a contract between Air NZ and their customer for Air NZ to transport that customer from the chosen departure point to the chosen destination. If Air NZ cannot meet that contract then I believe they must refund the ticket cost in full. Why shouldn't they? This cash flow argument is rank BS. The company should have firm control over it's cost structure, and the top echelons should be the first to take significant cuts if their income based on delivery, is cut. Air NZ need to stump up, to its customers, irrespective of where they are, in the first instance, the country in the second, and their shareholders a distant third. So far they just look like another thieving large organisation with little or no integrity.

by sit23 | 10th Jun 20, 10:08am 1591740529

Read the articles. The fares Air NZ does not refund are all nonrefundable fares. That was the deal the purchasers entered into. That is why they were cheap. The purchasers took a risk. It didn't pay off. C'est La Vie.

by murray86 | 10th Jun 20, 10:35am 1591742127

Air NZ as the carrier are taking a position of take it or leave it. Their customer base has no opportunity to negotiate the terms of the contract. I for one do not believe they sell those cheap fares at less than cost, so from that I suggest they have no grounds to deny refunds at all (even if they were less than cost). They need to change their business model to a real customer focused one, not the paper mache one they have now.

by Good Samaritian | 10th Jun 20, 11:19am 1591744789

Murray..

The simple answer to all this grandstanding was for the government to let the business go broke, and buy it back at a fair price. The consequences of that would have meant all ticket holders would have lost one completely.

Without government support, this would have happened. Accordingly, ticket holders should be grateful they got something rather than nothing. No doubt election year helped the ticket holders out, by like most businesses they have received life support for the government as well. Talk to the voucher holders of failed businesses, and you'll then understand the situation fully. Even I've been caught out with dud vouchers.

by murray86 | 10th Jun 20, 11:48am 1591746520

I don't necessarily disagree with you. But the Government took a stand, that continues the position taken when they rescued it years ago, that as our flag carrier it needed to be saved. This was a political decision, and therefore is debatable. But it was made, and action taken to keep the business in business. Now the business has come under scrutiny for a part of it's policies which rips its customers off when it undertakes to carry them somewhere, then walks out on that undertaking without return their customers funds. That is a breach of contract. To argue that it was the terms on which the customer bought the ticket is specious, as the customer has no negotiating rights - it is a take it or leave it deal. From my perspective it lacks integrity and smacks of arrogance. I expect better from a business that represents my country and all it stands for.

by wewillsee | 10th Jun 20, 11:44am 1591746289

Pretty sure that non refundable means that the customer has no flexibility to change or cancel the ticket and get a refund. Air NZ is still completely on the hook to provide the service or refund the fee. Otherwise they would be completely in breach of contract and running foul of the consumer guarantees act which you legally can't contract out of.

by Sluggy | 10th Jun 20, 11:02am 1591743745

My Wife is a travel broker, I had 3 cancelled flights over the shut down time, domestic and international. booked new flights yesterday, simpler to pay more money than try and use what I had already paid to them. The complexity of the airlines, classes, national, international, is unbelieveable. You catch fish in muddy waters. Those waters are a cesspit.

by Noncents | 10th Jun 20, 9:48am 1591739311

Are you really implying that a Govt looking after the citizens is a first world problem?

As a country we are propping them up two ways. They are running their business with Tax payer money, all the while keeping their customers cash without providing a service.

by J.C. | 10th Jun 20, 10:03am 1591740223

Are you really implying that a Govt looking after the citizens is a first world problem?

No I'm saying that customers complaining about Air NZ is a first world problem. The problems with Air NZ caused by Covid-19 are quite understandable, but surely the bigger picture needs to be considered. Air NZ is not a state-owned enterprise but the govt is propping it up given its importance for the country's earning capacity. What is happening at Air NZ in dealing with customers is happening all over the world. It's not an isolated problem.

by northman46 | 10th Jun 20, 10:24am 1591741498

To be fair, there is the option to pay extra and have the option of a cash refund when you book. I think a voucher is fine.

That said, they owe me over $3k and for the life of me can't even get a voucher. Incredibly frustrating.

by Ben72 | 10th Jun 20, 9:43am 1591739026

Air NZ refunds for compassionate reasons....

https://i.stuff.co.nz/business/121777190/air-new-zealand-has-refunded-1…

by sit23 | 10th Jun 20, 10:04am 1591740296

TASK 4: Take care of the inevitable backlash that will come from the benefit of hindsight about the total wrecking of our economy. Jacinda's Machiavellian head of department will try to cover it until the election. Lucky for him, the opposition don't even know how to spell Machiavelli, let alone how to apply his principles. But after Labour win and try governing alone, with even more incompetents in Parliament than they have now, and the opposition start noticing the obvious botchups, the wheels will start falling off, and we will all be vastly entertained by the whole tragicomedy. Maybe even our media will start saying bad things about Jacinda but not for a while yet.

by denver | 10th Jun 20, 12:09pm 1591747797

58 cases? You would have to have been hit in the head with a shovel to believe anything that comes out of China.

by Gatoperro | 10th Jun 20, 12:32pm 1591749158

Quite. That's the point. China says we have 58 cases so let us into NZ just like you have let Australia in. The Coalition and Labor PR department then has a problem, one that is not quite so straightforward as the Covid-19 shutdown. Either say we don't believe you and risk getting that smack around the head like Aussie or, what is more likely, keep the borders closed to all. Oops...that leads to a buggered tourism sector. Solution: kick it past the election.

by taimaiakka0 | 10th Jun 20, 7:46am 1591732013

What China is doing :

1 : Where possible try to capture more land (India... ) , Sea (South China Sea... ) or Countries (Taiwan, Tibet...) - Physical War
2 : Economical War (Australia...)
3: Throwing money and entering small countries(Maldives, Nepal, Countries in Africa, Pacific....) - Predeator

Not to forget Biological mess started. Can China be trusted. Is it not the time to reset for if not now could be never.

UK, Europe, USA, Australia and many countries in Asia and Africa have realized the danger China is to the world in their ambition to be super power and are comming out in open to protect their physical and economical souverignity - Where does NZ stands?

by PocketAces | 10th Jun 20, 7:50am 1591732208

I know where I want us to stand, and it is nowhere near China. The warning signs where China goes became clear when the Crafar Farms were sold to Shanghai Pengxin

by bw | 10th Jun 20, 8:07am 1591733277

And clearer?
https://en.wikipedia.org/wiki/Jian_Yang_(politician)

by Lapun | 10th Jun 20, 8:39am 1591735154

We all have a vote. Let us use it wisely. If Jian Yang makes rational public statements about Tibet, Uighur incarceration, organ harvesting of Falun Gong members, the disappearance of Hong Kong book-sellers, rejection of international arbitration in the South China Sea, etc then the National party will merit my consideration. If he doesn't then he is trying to serve two masters and neither he nor the national party can be trusted.

by Foyle | 10th Jun 20, 8:29am 1591734559

On the other hand a certain amount of farm ownership by China probably helps ensure that we retain ongoing access to their agricultural market. It's not an ideal state of affairs, but it means that there are Chinese individuals and companies motivated to bribe and otherwise cajole the right officials on NZ's behalf.

by Logicthinker | 10th Jun 20, 9:30am 1591738228

Unfortunately, China's real wealth was gained through corrupt American politicians which increased there personal wealth considerably. Mick Romney is one example when he stated this during one his electoral matchups with Barack Obama. He though the session had finished and he thought he was off-air by saying you must have investments in China to support your personal superannuation fund. Needless to say, his election hopes collapsed at that point. Trump has been pushing back ever since he came to power and now Scott Morrison finds Australia in the same position. Other than Iron Ore sales, the Australian economy is shut off from China. When Brazil comes back on line this product will disappear too. Where will New Zealand stand when the US and Australia will no longer be doing substantial business with China. Lets hope the UK comes to our rescue.

by murray86 | 10th Jun 20, 8:00am 1591732802

Chinese activities in the African continent are going to be curtailed. There was a pretty nasty murder of some Chinese nationals in Nigeria (I think) based on a blame attitude about COVID. This whole mess is going to cost them big time, as the world is blaming them irrespective of their propaganda. This may actually force them to rethink some of their strategies, and refocus towards the military one. The big question mark in all this is where does Russia sit?

by Foxglove. | 10th Jun 20, 8:24am 1591734271

Opportunistically the vassal Nth Korea chimes in bellicose with Sth Korea. China is a land based army. Any sea borne activity is beyond them, as firstly that cannot be done by surprise nowadays and secondly an armada as such would be extremely vulnerable. China lost control of Mongolia over a hundred years ago and then Stalin got in there in the 1930s. Maybe China wants it back. The Japanese occupying army tried it on with the Soviets in 1939 and got a bit of a hiding for their trouble. Putin is likely to react similarly, but until Russia is actually provoked and significantly so, would think more than happy just to watch other powers weakening each other.

by Foyle | 10th Jun 20, 8:32am 1591734731

When china pulls a 'Tibet' on Mongolia the world should offer to resettle the Mongolians. Really smart people (close to highest average IQ's even though they are 3rd world).

by Foreign buyer | 10th Jun 20, 8:58am 1591736335

It will be pulling a Tibet on India soon.

by stuart786786 | 10th Jun 20, 9:21am 1591737709

Must be joking.

May be lose Tibet also.

by sit23 | 10th Jun 20, 4:31pm 1591763491

My source says nobody has anything to fear from the Chinese army. They can hardly move their gear up to the Indian border, let alone across the South China Sea to Taiwan. The Sprattley islands saga is only taking place because nobody actually bothers to try to stop them. Remember Korea. A few thousand UN troops pushed them back. Remember when they invaded Vietnam after the Yanks left. They got a real bloody nose before signing a treaty which they have been forced to honour ever since. Their African adventures have only resulted in African politicians stealing the aid money, Chinese companies really badly half doing projects, and all locals without exception hating the Chinese, with the Chinese having zero chance of having the aid loans, not grants, paid back.

by CJ099 | 10th Jun 20, 10:50am 1591743049

You could well be right. BBC China-India border: Why tensions are rising between the neighbours. "The situation is serious. The Chinese have come into territory which they themselves accepted as part of India. It has completely changed the status quo," says Ajai Shukla, an Indian military expert who served as a colonel in the army. China takes a different view, saying it's India which has changed facts on the ground."
https://www.bbc.com/news/world-asia-52852509

by sit23 | 10th Jun 20, 4:33pm 1591763590

3 problems. India, China, and BBC total lack of credibility.

by CJ099 | 10th Jun 20, 6:38pm 1591771099

Explain yourself since you spout BS!!

by Audaxes | 10th Jun 20, 8:50am 1591735815

The big question mark in all this is where does Russia sit?

Moscow doesn't have to match the U.S. military; it just has to checkmate it.

by Roger Witherspoon | 10th Jun 20, 9:17am 1591737466

Assuming the war mad US political class is actually Russia's main threat, which it is not. Historically, China is a much more real and present danger to Russia. Gas and oil rich Siberia belongs to China, as far as the CCP is concerned. They have a very long border. Putin knows the Chinese cannot be trusted and will infiltrate Russia if they are allowed to. He is no fool.

by Audaxes | 10th Jun 20, 9:55am 1591739737

Exactly.

"The state policy in the sphere of nuclear containment is defensive and aims to maintain the nuclear forces’ potential at the level sufficient for ensuring nuclear deterrence, and guarantees the protection of the state’s sovereignty and territorial integrity," the decree says. Link

by FCM | 10th Jun 20, 8:02am 1591732926

Yep another mistake is not having a bubble first with the Pacific Island Nations (most are Covid free). China is moving on in giving cheap money (but with strings attached) as they are in dire straits with no tourism. Not sure why we don't try open up there first given we also are throwing a lot of money that way to help them out? Is it because they don't want kiwis to travel to a warm beach on the winter holidays and want us to go to Hokitika/Rotorua first?

by Houseworks | 10th Jun 20, 8:21am 1591734072

"Yep another mistake is not having a bubble first with the Pacific Island Nations"
So much for the strong pacific islands ties eh and the previous motherly protection to ensure PI didnt catch the disease. Are they (Nz gov) being over protective.. dumb move

by Lapun | 10th Jun 20, 8:43am 1591735399

NZ's failure to support the Covid-19 PI nations is the dumbest thing our govt has done. We will regret it when Fiji, Samoa , Tonga, etc develop close ties with other countries because we let them down in their hours of need.

by Rubb3rduck3y | 10th Jun 20, 8:07am 1591733279

China can't win any wars well not physical ones.

by Foyle | 10th Jun 20, 8:36am 1591735007

They have a rapidly advancing airforce and naval tech and numbers, far higher quality of soldier (smarter, harder working) and will probably outgun the USA within 1-2 decades. West needs to align with and support continued US military leadership, because Chinese military leadership won't be good for anyone except China. Also, expect Space to become the key strategic battleground over the next decade.

by Rubb3rduck3y | 10th Jun 20, 8:48am 1591735735

their soldiers are smarter and forced to work harder. But cannot work in teams work for themselves, no combat experience at all. Their airforce is a self defence. And their navy wouldn't get close to any nato nations strike forces to be able to fire their weapons.

by linklater01 | 10th Jun 20, 3:30pm 1591759813

Rubb33duck3y,

If your military expertise matches your English; "But cannot work in teams work for themselves", then I don't think we need pay any attention to you. The NATO nations? Where do they come into this equation? have you any idea of their missile capacity to deny near land access to say a carrier fleet?
I suggest that you go and do some homework.

by murray86 | 10th Jun 20, 8:48am 1591735706

That kind of attitude is what has lost wars! China is advancing its military technology at a phenomenal pace. It has the worlds largest standing army. and in recent years it has patched many of it issues with Russia. Russia may well see a war between China and some other (US/India/Vietnam-Indonesia-Philippines-Malaysia, whoever) as a means to test it's technology without getting actively involved and having to bear a cost. Plus China has significant internal issues and an external war is seen by politicians as an excellent way to divert a population, especially a restive one. COVID is spreading through many militarys (the US in particular is somewhat distracted by it at the moment) and will be undermining capability and readiness and therefore ability to respond, not to mention the ability to maintain the logistics needs of a sustained war.

Who really knows what the Chinese view is, and what their response will be? Culturally they are so different, I am not sure any reason and logic we will apply will be valid.

by Rubb3rduck3y | 10th Jun 20, 8:58am 1591736292

So you're telling me a country which has never invaded another country is suppose to launch a assault on a nation when they are in firing range of South Korea and Japan.

by murray86 | 10th Jun 20, 9:16am 1591737415

Your question does not make sense?

To assume China will not undertake any military action just because they are in range of some weapons from SK or Japan is rank arrogance. They have almost continuously been testing and pushing Taiwan, and I suggest that it is only America's security guarantee that has prevented a physical invasion so far. Even though Taiwan and China have had many confrontations over the years and Taiwan has inevitably come out on top.

China's actions in the South China Sea has been in the face of international condemnation, and effective inaction. They have bullied and attacked Vietnamese, Indonesian and Philippine commercial fishing activities for years with impunity. And the only military that they have not forced to back down so far is the US, and that is likely because the US is only forcing rights of passage and not really challenging them on their annexation of the islands. The Chinese will likely think the countries with interests in the area are either incapable or politically and militarily spineless with some degree of justification.

by Noncents | 10th Jun 20, 9:43am 1591739027

As you mention, the US are keeping them out of Tawain, and general apathy is letting them get away with other indiscretions.

But you are making a massive assumption that were China to attack another nation it would be a one-on-one fight.

China may be hassling some fishing boats and taking over some reefs. But trying to set foot in another soverign nation? or actively defending the South China Seas...well that would bring a few other players to the table.

Do you really think as a sole agressor China could take on South Korea, Japan, USA, Taiwan, Malaysia, Indonesia, India, Singapore, and then likely Australia, Britain, and the EU/NATO?

by murray86 | 10th Jun 20, 10:29am 1591741746

I made no assumption about numbers, but merely stated a fact. Actually I do not think the combined military might of all the nations that surround the SCS is enough to hold off China. Politically i think Indonesia and the Philippines are bearing a degree of angst as they have concerns that if they appeal to the US, the only one they see who could face down China, that the cost to them will be too high.

The Philippines effectively kicked the US out because they felt like they were a colonised vassal state to the US. The economic cost was severe for them. And they were also going to cease the Visiting Forces Agreement that allowed the US to train in the Philippines, but this has been stopped for the moment, probably because of the threat that China poses to them.

The Philippines also faces the problem of the Islamic fundamentalist movement. I read a report some time back that suggested that perhaps China was providing some funding for these as a means to try to destabilise the Philippino government. So there are other ways and means to achieve a goal without direct confrontation. They were likely also funding the Taiwanese political party that lost the last election too, as their platform was to move closer to the mainland. Smoke and mirrors!

by Foxglove. | 10th Jun 20, 7:50pm 1591775431

Murray amphibian invasions are tactically so perilous. Just remember the Falklands, the British got there but against a ill equipped and poorly led force not much better than a militia. But even so, that attack cost dearly. Taiwan is not in that category, quite the opposite in fact. Every beach head is identified and defended, started by Chiang Kai Shek, improved ever since. The straits of Formosa are challenging. Only two or three months a year are the seas kind enough to be feasible. And then strategically any such force has to go around and isolate Japan first. Just won’t happen, any move that threatens Japan’s sovereignty and all hell will break loose.

by Lapun | 10th Jun 20, 8:50am 1591735806

Rubbish. An echo from the days of my youth when Asians could only build copies of first world technology. Check your computers, comms equipment, white goods, etc - now they are ahead of America and EU in some aspects of computer software. If they can't win physical wars why has India been unable to dislodge them in the Himalayas? Not only can China fight unlike most western countries they can sustain large numbers of casualities without their media complaining.

by CJ099 | 10th Jun 20, 10:54am 1591743285

It seems that India doesn't trust China's technology either. BBC Indian app hunts out Chinese software on phones. "An Android app that highlights apps of Chinese-origin to help people delete them, has had one million downloads since it was launched in May. It has proved popular in India, where tensions with China are high over a disputed border in the Himalayas." https://www.bbc.com/news/technology-52892796

by stuart786786 | 10th Jun 20, 8:18am 1591733913

No one country should allow any other country to bully/dictate be it physically or economically and that is possible only if one does not allow the country to become financially dependent on the other country.

In case of NZ, it's leader particulary of National party were mesmerized by the wealth from China and when China started its buying spell and throwing money like never seen before in NZ even people who were getting premium / money were enchanted and the whole concept of Rock Star Economy was created and unfortunately China has now penetrated economy and political system in NZ and any attempt to reset (From allowing them to be friends from being our master) will have consequence.

Is NZ ready for short term pain for long term gain.

by Ezy | 10th Jun 20, 8:20am 1591734022

Any political party who realises that the current sentiment toward China in NZ is very negative, and runs a smart campaign focused on the issues around this will pick-up a lot of votes come September. National and Labour are both so entrenched they can't really do this without highlighting how deeply they're in bed with the CCP.

by Foyle | 10th Jun 20, 8:41am 1591735264

I am sure that a gradual non-obvious draw back is happening. But also important that the 5% of NZ population that are Chinese are not shut out of our political processes. They are Kiwis too, and a worse state of affairs would be if they established an ethnic party that held balance of power under MMP and effectively forced PRC lapdog status on NZ Govt.

by Ezy | 10th Jun 20, 8:53am 1591735987

That's a red herring. Kiwis with Chinese heritage can make up their own minds - we're all in the same boat.

However, if there's enough pro CCP members in NZ already to form a party that makes the 5% threshold, its better to have them in the open rather than be oblivious and let them undermine our major parties by stealth and by proxy the whole country.

by PocketAces | 10th Jun 20, 2:49pm 1591757381

If 5% of our population is of Chinese origin, then a good number, probably 25% not a bad guess, would be under-age for voting, then how many of that

by PocketAces | 10th Jun 20, 2:51pm 1591757491

5% of the population of Chinese origin, how many are under voting age, how many are from Taiwan or Hong Kong. Mainland CCP leaning Chinese of voting age would not get them anywhere near 5%

by richard1965 | 10th Jun 20, 8:45am 1591735518

This sentiment is not only in NZ but world over. Question to be asked, Is it without any reason and justification ?

One country can be anti for bias reason but if most countries are, across the length and breadth of the global than......

by Becnz | 10th Jun 20, 8:22am 1591734176

But we must suckup to them as they buy our milk powder and meat they are bullies and the sooner we find new markets the better otherwise they will find away to control our farmers or just keep buying them up.

by theglc | 10th Jun 20, 8:33am 1591734793

China is the Devil!

We should all be very concerned

by Foyle | 10th Jun 20, 8:47am 1591735657

"Don't trust China, China is Asshoe" the original clip from a Hong Kong protestor: https://3speak.online/watch?v=ozraeliavi/wxqcynyf&jwsource=cl

by Ben72 | 10th Jun 20, 8:04am 1591733098

Nobel prize Economist Paul Krugman - NZ wins the marshmello test but America fails!!

https://www.democraticunderground.com/100213569758

by Becnz | 10th Jun 20, 8:18am 1591733928

NZ tourism is not going to replace pre covid as we are not going to flash the cash.
https://www.stuff.co.nz/business/300031085/jetstar-sale-fares-first-vol…

Also further my last comment on retails looks like the opening party has finished and now we face the real world https://www.stuff.co.nz/business/121765416/tough-times-for-christchurch…

by KBKIWI | 10th Jun 20, 8:41am 1591735260

Your link contradicts your own assertion: “retail spending is up 3% vs the same week a year ago”.

by Becnz | 10th Jun 20, 9:24am 1591737896

That was cherry picking the best figures we will see for a longtime to come.
No cash payments and how does that work when no overseas tourists spending up big or are they fudging the figures ???? or did tourists not spend anything.
The next figures will show the real spending levels.

by waymad | 10th Jun 20, 9:21am 1591737686

As a fellow Christchurchianite, I concur with the substance of the Stuff article. I've stopped going to my CBD office (WFH is far better, no bell-birds in the CBD), my one visit to CBD retail sector since early March was for a lunch at Bally's and a book at Scorpio, and footfall is clearly around half pre-WuHuFlu levels (from the article). The other aspect that the article just touches on then shies away from, is structural changes: more WFH, online, suburban shopping (strips and malls); less CBD everything. That's just gonna grind on, with implications for B&M retail, commercial RE, PT, CBD planning and other such dominoes yet to topple....

by iconoclast | 10th Jun 20, 8:34am 1591734848

New York
The Dow Jones fell 100 pts or 1/3 of its fall done in the last 25 minutes of the session. Indicates an unsatisfied sell-side algorithmic dump going into the close. After 6 days of continuous rises that's the turn

by ShoreThing | 10th Jun 20, 1:47pm 1591753668

Dow futures off to a strong start after markets closed though.

by iconoclast | 10th Jun 20, 8:48am 1591735680

Bubble, Bubble, Bubble
The only side frothing at the mouth about a Trans-Tasman bubble is NZ. Don't hear anything coming out of Australia about it. Anyway, tourism across the Tasman would be a zero-sum game. NZ government is flying kites

by Masher | 10th Jun 20, 12:20pm 1591748419

Can confirm. If people think Australians are going to flock to NZ in their droves they are absolutely dreaming.

I expect instagram to be flooded with basics of NZ in their camper vans thinking they are doing their bit for the tourism industry, when the reality is they only booked it due to the rock bottom price, resulting in a paper thin margin for the business owner. The campervans with the ability to cook will be in high demand, ironically. Long story short, NZ tourism will continue to take a pounding.

Don't forget, property in Australia is a lot like that in NZ - a cult. How many of these Australians have million dollar plus mortgages on a devaluing property?

by Kezza R | 10th Jun 20, 9:16am 1591737395

The CBD offices buildings are most likely going to see large vacancies. These buildings could get repurposed for housing, which would keep these areas alive, fix the housing shortage and keep the construction sector going.
It could reshape the entire housing market. They would be a good option for younger FHBers and also older people down sizing. Those with families move to stand alone houses.
It would certinally make a very vibrant fun zone in the evenings.
This is the kind of thing that the Greens should be promoting. Reduced transport, reduced urban sprawl, etc.

by FCM | 10th Jun 20, 9:14am 1591737286

yep my wife works CBD, they have all been offered flexible working from home now. Less hassle driving to work in rush hour, less cost for us having to pay for parking, there be no pay rises this year, but this is effectively a pay rise anyway, and the staff love it, and the productivity is still being meet. Good for our local shops, bad for CBD shops. But the councils have made it that way in the BIG cities. Too hard to get to work, too expensive to pay for parking.

by Kezza R | 10th Jun 20, 9:52am 1591739531

Same as my wife and she finds she can get more done than in an office due to less distractions.

by waymad | 10th Jun 20, 9:19am 1591737546

Gotta get past the District Plans, the Plannerz, the Council, the RMA/consenting process, the Building Code, the financing, the reading of the possible market......Absent a substantial improvement in the time (and therefore the Munny) inherent in all of these, it's not gonna fly anytime soon....

by Kezza R | 10th Jun 20, 2:38pm 1591756738

All easy to overcome when the Councils see large voids in their budgets created by unproductive CBD's.
As usual private enterprise will come to the rescue as the Govt dithers.

by Audaxes | 10th Jun 20, 9:14am 1591737281

A Crash in the Dollar Is Coming

by Kezza R | 10th Jun 20, 9:25am 1591737909

Yep, it's coming... I keep thinking that the US has some kind of master stroke plan that will stop this but I'm starting to doubt that they have.

by Andrewj | 10th Jun 20, 9:28am 1591738111

https://wolfstreet.com/2020/06/09/illinois-is-the-first-entity-to-borro…

by DD62 | 10th Jun 20, 10:01am 1591740117

Anyone who think China wont use their military to get what they want are deluding themselves. As I've said before, having lived in Asia and seen how they operate we should not trust them!
Back in 2000 the author Eric L Harry wrote a book called "Invasion". A fiction book based on a war between China and the US when China invades the USA after having conquered the rest of the free world! Its a great read and I thought at the time that this will happen one day! Not saying it's close but definitely getting closer!

by lastlegs | 10th Jun 20, 10:24am 1591741443

china kneeling on australia,maybe we will be next if their team fails to get elected in september,so easy decision to stop buying on aliexpress as even pre-covid it takes forever for goods to get here and sometimes not at all.and leaving canned food from china on the shelf at the supermarket is easy too,if they dont trust their own food safety why should I?

by NZChinese | 10th Jun 20, 11:23am 1591745004

Typical American offensive tactic in the international politics - let the ally to hit out and then receive the retaliation

And then typical Chinese response - punch America's ally instead of America itself

I wish UFC could organise a cage fight between DT and Xi for world peace.

by Independent_Observer | 10th Jun 20, 2:39pm 1591756759

Trump wouldn't show up to the fight claiming 'bone spurs'.

https://www.usatoday.com/story/news/politics/onpolitics/2018/12/27/trum…

by KH | 10th Jun 20, 1:19pm 1591751976

Our dependence on China is dangerous. Safety dictates we distance ourselves as much as possible.

by Boatman | 10th Jun 20, 3:00pm 1591758045

The Chinese should be careful for what they wish for .

Boycotts can be a game both sides play