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‘Total disaster’: Shanghai lockdown puts livelihoods under strain | Coronavirus pandemic

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Hong Kong, China – When more than 26 million Shanghai residents were sent into lockdown last week, restaurateur Cotton Ding’s heart sank.

“We have been fighting the pandemic since 2020, and for the past two years we’ve experienced a lot of changes,” Ding, who owns two restaurants located in historic colonial villas in the heart of the former French Concession, told Al Jazeera.

“We were finally getting back on our feet, business had recovered and was doing a little better, then the recent outbreaks and lockdowns hit.”

Spring would normally be Ding’s busiest period, with guests taking advantage of her leafy patio to enjoy the balmy Shanghainese weather.

Instead, business has been “a total disaster”, she said, due to the lockdown, which authorities this week extended to cover the entire city indefinitely after a two-phase lockdown introduced on March 28 failed to bring coronavirus cases under control.

“Usually we hire and train new staff to cater for this time, upgrade our furniture settings and bring the garden to life,” she said.

“Now we have been ordered to shut our doors and we anticipate that we will be closed for most of April.”

Ding said she has no idea when she will be able to reopen or go back to full capacity.

“The worry has not allowed me to sleep well at all,” she said.

Cotton Ding's restaurant in Shanghai
Cotton Ding’s restaurants in Shanghai’s former French Concession are among the small businesses that have been hit hard by the city’s lockdown [Courtesy of Cotton Ding]

Since the start of March, authorities in China’s most populous city have reported more than 114,000 cases, far exceeding the nationwide caseload of the previous two years. On Thursday, Shanghai recorded 19,982 cases, its highest daily figure yet.

Chinese officials have described the outbreak as “extremely grim” and sent tens of thousands of healthcare workers to help contain infections in the city, including military personnel.

Nevertheless, authorities have yet to report any deaths in the city – an anomaly that has fuelled scepticism about China’s official figures.

Amid the mounting economic toll of China’s zero-tolerance approach to the virus, known as “dynamic zero COVID”, there are signs that public patience is wearing thin.

Videos circulating on social media have shown residents struggling to buy basic necessities like food and water, due to the closure of supermarkets remain and overburdening of delivery services. Other residents have posted videos complaining about overcrowding and unsanitary conditions at the city’s mass quarantine centres, including soiled shared toilets and a lack of showering facilities.

In one video posted online, a woman can be seen begging to leave her compound to get her husband cancer treatment. Residents also expressed outrage over the separation of COVID positive children from their parents, leading authorities on Wednesday to bow to public pressure and ditch the policy.

A protracted shutdown of China’s economic powerhouse would have far-reaching economic consequences at home and further afield. Shanghai is the country’s most important financial and manufacturing base, with its output accounting for 4 percent of China’s gross domestic product (GDP). The city is also home to the world’s largest port, handling about 20 percent of China’s exports overseas.

Xia Le, chief Asia economist at Banco Bilbao Vizcaya Argentaria (BBVA), told Al Jazeera that the economic impact of the lockdown would depend on its duration.

“If the lockdown only lasts for two months, say April and May, it will trim China’s growth by 0.3-0.5 percent this year,” Xia said. “If the lockdown lasts throughout the third quarter, it will cut China’s growth by 1.5-2 percent.”

Xia said China would be unable to meet its 5.5 percent official growth target if the lockdown continued beyond June “even if authorities were to deploy more pro-growth policies”.

Shoppers in Beijing
China’s services sector contracted at the fastest pace in March in two years, according to official statistics [File: Lim Huey Teng/Reuters]

Beijing has warned of strong headwinds facing the economy this year, including the effect of the pandemic, although it has given no indication it intends to fundamentally alter its zero-tolerance approach.

Activity in the country’s services sector contracted at the quickest pace in two years in March, according to official Chinese government data, with the non-manufacturing Purchasing Managers’ Index (PMI) falling to 48.4, from 51.6 the previous month.

A private sector survey paints an even bleaker picture. According to a report released by Caixin on Wednesday, China’s PMI fell to 42 in March from 50.2 in February, the lowest level since the beginning of the pandemic in February 2020.

“Overall, both manufacturing and services activities weakened in March due to the epidemic,” Caixin Insight Group senior economist Wang Zhe said in a statement. “Similar to previous COVID outbreaks in China, the services sector was more significantly affected than manufacturing.”

“Policymakers should look out for vulnerable groups and enhance support for key industries and small and micro businesses to stabilise market expectations,” Wang said.

As the rest of the world learns to live with the virus, China’s uniquely strict policies have also raised questions about its competitiveness in a global economy where pandemic restrictions have been mostly consigned to history.

“Chinese exporters will lose more orders to their foreign competitors in a real ‘open’ economy,” said Xia, the BBVA economist. “China is expected to have less foreign direct investment before it reopens its economy. In the meantime, international investors might become less interested in Chinese assets.”

Xia said the zero COVID strategy would not be sustainable in the long run.

“I am not saying that they should abandon this strategy immediately, but it’s time to reassess the strategy and make the change at some point,” he said. “A sensible transition plan will strike a good balance between saving lives and maintaining economic prosperity.”

Anxiety and stress

For Ding, the Shanghai restaurateur, the last few weeks have been financially crippling.

“It has totally destroyed our cash flow,” she said. “As a small business, we will not be able to pay our rent, staff and suppliers straight away. It will take years for us to pay the debts.”

Ding said she is concerned for the welfare of her 50 employees, whose livelihoods she feels responsible for.

“The uncertainty has caused them a lot of anxiety and stress,” she said. “I’m in contact with them daily and they tell me they are worried and feeling unsettled.”

Chinese authorities have offered some financial support for businesses, including 140 billion yuan ($22bn) in tax relief and a three-month rent exemption for small tenants at state-owned entities.

“It is a tiny fraction of our losses and if you are not earning anything there isn’t much tax to pay anyways,” Ding said.

“Unfortunately for me, both my locations are privately owned and I will not receive the exemption. I will try to negotiate a discount with my landlords directly but as one of them was trying to up the rent by 15 percent recently it may be a hard deal.”



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More than 260 Ukraine troops evacuated from Mariupol plant: Kyiv | Russia-Ukraine war News

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Ukrainian defence official says missions are underway to evacuate remaining soldiers from besieged steel works.

More than 260 Ukrainian soldiers have been evacuated from a steel plant in Mariupol, the country’s deputy defence minister said, after a weeks-long standoff with Russian forces in the besieged southern port city.

Anna Malyar said in the early hours of Tuesday that 53 seriously wounded fighters were taken from the Azovstal steelworks to a hospital in Novoazovsk, while an additional 211 fighters were evacuated to Olenivka through a humanitarian corridor.

An exchange would be worked out for their return home, she said.

Malyar added that missions are underway to rescue the remaining fighters inside the Azovstal steel plant, the last stronghold of resistance in Mariupol.

“Thanks to the defenders of Mariupol, Ukraine gained critically important time,” she said. “And they fulfilled all their tasks. But it is impossible to unblock Azovstal by military means.”

Azovstal has become a symbol of Ukrainian resistance to Russia’s ongoing invasion of the country, which began in late February and has forced more than six million people to flee Ukraine amid widespread destruction.

Some 600 troops were believed to have been inside the plant, where they continued to fight even after the rest of the city had fallen to Russian forces.

“We hope that we will be able to save the lives of our guys,” Ukrainian President Volodymyr Zelenskyy said in an address on Monday night. “There are severely wounded ones among them. They’re receiving care. Ukraine needs Ukrainian heroes alive.”

Al Jazeera’s Hoda Abdel-Hamid, reporting from Odesa, said a source indicated that a number of far-right Azov regiment members had decided to surrender, but there had been no official confirmation.

“In the past days, we’ve heard from President Zelenskyy and from other senior officials here that these were very tough negotiations,” Abdel-Hamid said.

The Ukrainian regiment at the steel plant said it was fulfilling orders to save the lives of troops by evacuating them.

“In order to save lives, the entire Mariupol garrison is implementing the approved decision of the Supreme Military Command and hopes for the support of the Ukrainian people,” the Azov regiment said in a social media post.

It said its troops in Mariupol had held out for 82 days, buying time for the rest of Ukraine to battle Russian forces, which continue with their offensive in the country’s east, and secure Western arms needed to withstand Russia’s assault.

The evacuation came hours after Russia said it had agreed to evacuate wounded Ukrainian soldiers to a medical facility in Novoazovsk.

“An agreement has been reached on the removal of the wounded,” the country’s defence ministry said on Monday. “A humanitarian corridor has been opened through which wounded Ukrainian servicemen are being taken to a medical facility in Novoazovsk.”



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Musk says Twitter deal at lower price is not out of the question | Social Media News

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Twitter’s stock has been dropping on concerns that Musk could walk away from the $44bn acquisition altogether.

By Bloomberg

Elon Musk stoked speculation that he could seek to renegotiate his takeover of Twitter Inc., saying a viable deal at a lower price wouldn’t be “out of the question.”

Twitter shares briefly pared losses in afternoon trading. The stock has been dropping on concern that Musk could walk away from the $44 billion acquisition altogether. That concern has grown over the past week as Musk has questioned Twitter’s publicly disclosed data on the percentage of spam and fake accounts on its social-media service.

Musk pressed further on that front Monday at a Miami tech conference, estimating that fake users make up at least 20% of all Twitter Inc. accounts. That was his low end of his estimate on the number of Twitter bots, and he asked rhetorically if the number could be as high as 90%, according to a livestreamed video of his remarks posted by a Twitter user.

Twitter didn’t immediately respond to a request for comment.

Musk, the CEO of Tesla Inc. and SpaceX, last week said that his bid to buy Twitter was “temporarily on hold” pending details about how many spam and fake accounts are on the platform. Over the weekend, he tweeted that Twitter’s legal team called to complain that he had violated their non-disclosure agreement. Twitter has declined to comment.

Musk spoke at a conference hosted by a podcast called “All-In” run by Chamath Palihapitiya, Jason Calacanis, David Sacks and David Friedberg. The $7,500-per-person event was sold out, and organizers said journalists were excluded from attending. Musk appeared at the Miami summit via video conference.

Musk began buying Twitter shares in January and disclosed a 9.2% stake in the company on April 4. Twitter’s board accepted Musk’s $44 billion bid to buy the company and take it private April 25, but the deal has yet to close and Twitter’s shares are trading far below Musk’s offer. One theory is that Musk is angling to pay a lower price for Twitter by raising the issue of fake accounts.

Twitter shares fell 6.9% to $37.93 at 2:53 p.m. in New York. The spread between Musk’s $54.20-a-share offer price and Twitter’s share price continued to widen, wiping out all the gains the stock had made since Elon Musk disclosed his stake in the social media platform.



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JetBlue goes hostile with reduced Spirit takeover bid | Aviation News

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JetBlue Airways Corp. made a hostile $3.3 billion cash bid for Spirit Airlines Inc., appealing directly to shareholders in an effort to prevail over a rival offer for the discount carrier by Frontier Group Holdings Inc.

The JetBlue proposal is worth $30 a share, $3 less than its initial approach, which was spurned by Spirit’s board two weeks ago. The New York-based company said Monday it will pay the higher price should a “consensual transaction” be agreed. JetBlue’s latest offer is a 77% premium to the value of Spirit’s closing price on Friday.

Spirit shares climbed 8.4% to $18.40 at 9:35 a.m. in New York. JetBlue shares fell 2.5% and Frontier rose 4%.

“This signals that the original JetBlue offer was a serious one, as opposed to one just trying to scuttle the Spirit-Frontier deal,” said Savanthi Syth, a Raymond James Financial Inc. analyst.

The move marks the latest twist in the takeover tussle for Miramar, Florida-based Spirit. JetBlue is banking on the acquisition as its best shot at near-term growth, even though the deal would mean combining its own full-service product with a model based around offering rock bottom prices and charging for every extra.

Spirit rejected JetBlue’s earlier unsolicited $3.6 billion proposal over concerns that antitrust issues would stop it from being consummated, and stuck with its agreement to be acquired by Denver-based Frontier for $2.9 billion. Spirit and Frontier didn’t immediately respond to requests for comment.

Spirit management’s proposed deal with Frontier, which includes stock, is “high risk and low value,” JetBlue said in a statement, urging investors to reject it at a meeting scheduled for June 10.

Letter to Shareholders

JetBlue set up a website — www.JetBlueOffersMore.com — and issued a letter to Spirit shareholders as part of its attempt to derail the Frontier deal, with Chief Executive Officer Robin Hayes arguing that his own proposal offers more value, more certainty and more benefits for all stakeholders.

JETBLUE NY LDN

Hayes also sought to justify the bid in a letter to his own employees, saying that “by voting against the Frontier merger, Spirit shareholders can push the Spirit board back to the table to give us the information we need and negotiate a merger agreement with us, perhaps at our original price.”

He said the combination would in turn create “a true national low-fare competitor” to big four US carriers American Airlines Group Inc., Delta Air Lines Inc., United Airlines Holdings Inc. and leading discounter Southwest Airlines Co.

A Frontier-Spirit Airlines combination, though not so big, would create the largest US deep discounter just as domestic leisure travel bounces back from the Covid-19 pandemic. Under the Frontier deal, investors in Spirit would receive 1.9126 Frontier shares and $2.13 in cash for each Spirit share. Frontier shareholders would own 51.5% of the combined company.

Spirit has said JetBlue’s bid could by compromised by a federal lawsuit against its alliance with American Airlines in the northeast US, and that its board didn’t consider financial details after determining it had little chance of gaining regulatory approval. Claims that the antitrust lawsuit against the Northeast Alliance with American could be a factor in the takeover bid “has no basis in fact or in law,” JetBlue said.

Spirit Links

JetBlue took aim at Spirit’s links to Bill Franke, the self-proclaimed father of ultradiscounting whose Indigo Partners owns the majority of Frontier’s shares. Franke, who serves as Frontier’s chairman, led Spirit’s conversion to an ultradiscounter about 15 years ago, and in 2013 used proceeds from selling Indigo’s 17% stake in Spirit to purchase Frontier out of bankruptcy and convert that carrier to the ultra-low-cost model.

Spirit’s board “is prioritizing its own self-interest and personal relationships with Frontier over its shareholders’ interests,” JetBlue claimed.

A Spirit deal would give JetBlue, hounded by Wall Street analysts for much of its 23-year history over cost creep, access to an organization and management team highly focused on keeping operating expenses in check. JetBlue lost out in its only other takeover attempt when it was outbid by Alaska Air Group Inc. for Virgin America in 2016.

(Updates with opening shares in third paragraph)



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