Financial Times 19Feb2020

2 ★ FINANCIAL TIMES Wednesday19 February 2020

I N T E R N AT I O N A L

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oronavirusC

S U E- L I N WO N G— HONG KONG
Y UA N YA N G A N D C H R I ST I A N S H E P H E R D

BEIJING

China has clamped down on civil society

activists and access to information on

the coronavirus outbreak after Presi-

dent Xi Jinping told authoritiesto

strengthen control over online mediaas

public outrage erupted over Beijing’s

handling of the health emergency.

Prominent legal rights activist Xu Zhi-

yong, who had criticisedChina’s politi-

cal system and its response to the coro-

navirus outbreak in a series of scathing

essays, went missing at the weekend,

according to people with direct knowl-

edge of the situation.

Mr Xu, who was ailed from 2014 toj

2017 , had been in hidingfor about 50

days, hopping between friends’ homes

to avoid being detained followinga pro-

democracy gathering of activists and

reformers that he helped to organise in

Xiamen in lateDecember.

While on the run,he hadcriticised

China’s political system and its response

to the coronavirus outbreak, saying the

government’s obsession with stability

prevented doctors fromwarning the

public.“Nothing — not the freedom, dig-

nity or happiness of the Chinese people

— was more important than maintain-

ing stability,” he said, saying the delay

had led to a cover-up of the seriousness

of the health emergency. Mr Xu had also

called on Mr Xi to resign.

His arrest came against a backdrop of

outrage at government censorship

across Chinese social mediafollowing

the death of Li Wenliang, a Wuhan doc-

tor who was punishedafter warning

about the new virus beforeofficials had

spoken about it publicly.

Pang Kun, anotherlabour rights law-

yer, was briefly detained last week after

authorities accused him of “picking

quarrels and provoking trouble”, a

crime in China. “The authorities used

this crime as an excuse to detain him but

questioned him about his involvement

in a petition to commemorate the death

of Li Wenliang and the Xiamen meet-

ing,” according to a person with direct

knowledge of the situation.

Two citizen journalists who werein

Wuhan have also disappeared over the

past two weeks nd more than 350 peo-a

ple across the country have been pun-

ished for “spreading rumours”, accord-

ing to Chinese Human Rights Defend-

ers, an advocacy group.

Chinese authorities havetightened

access to the global internet s its citi-a

zens look for uncensored news about

the outbreak. China’s most popular VPN

services, which are used by foreign busi-

nesses and localsto circumvent internet

censorship, have been hit by an escala-

tion in government blocks.

This has made it more difficult to

access overseas websites that are

blocked, includingGoogle nda Twitter,

as well as most foreignmedia.

At the same time, the number of Chi-

nese users of FreeBrowser.org, a website

that provides access to uncensored for-

eign news articles, roughly doubled

after January 25, two days afterWuhan

wasput in lockdown. FreeBrowser

logged up to 60,000 “events” per day, or

links clicked on the homepage.

See Markets

China cracks down on activists and media

Amid anger over Beijing’s

handling ofhealth crisis,

leading critics go missing

A labour rights lawyer was

briefly detained last week

after authorities accused

him of ‘picking quarrels’

N A J M E H B OZO R G M E H R— TEHRAN

As mayor of Tehran, Mohammad

Baqer Qalibaf expanded the city’s high-

ways, spent money on public art,

opened new cinemas and created

cyclingroutes.

Now the politician many voters associ-

ate with heavy spending and the mod-

ernisation of Tehranhas become one of

the most divisive candidates in Friday’s

parliamentary polls. Some hardliners

fear victory for Mr Qalibaf will

embolden him in a third bid for the

presidency next year, but also that their

opposition to him could ensure victory

for reformist candidates in the capital.

“Tehran has symbolic political impor-

tance and if you come first in Tehran

you have a bigger say in power centres,”

said one reformist analyst. “Qalibaf

needs a good victory if he wants to run

for president [next year] and other

hardliners don’t want this to happen.”

Thirty parliamentary seats are up for

grabs in Tehran, out of a total of 290.

The Guardian Council, the constitu-

tional watchdog that vets prospective

candidates, disqualified hundreds of

reformist candidates across the country,

including a third of sitting MPs. This has

meantthe contest is mostly between

conservatives and ultra-conservatives.

One exception is the capital city.

In the wake of the death of military

commander Qassem Soleimani in a US

drone strike, hardliners hope to shape

the assembly, establishing a direction

for the country’s politics ahead of next

year’s presidential election. Centrist

president Hassan Rouhani is set to step

down next year after two terms in office.

Butjust a few daysbeforeparliamen-

tary polls, the hardliners — conservative

clergy, the Revolutionary Guard and the

judiciary — have struggled to agree on

which candidates to back in Tehran.

Mr Qalibaf, a formerpresidential can-

didate who hopes to become an MP and

parliamentary Speaker, is proving par-

ticularly controversial. Also a former

commander in the Revolutionary Guard

and once a police chief, he faced criti-

cism when mayor for handing over

development projects to the guards

withouta proper tender process.

He enjoys a national profile and has

previously positioned himself as a mod-

erate, who believed in modernising

Iran. Confusion over his political alle-

giance contributed to his defeat in presi-

dential elections in 2005 and 2013.

“One of the reasons hardliners cannot

reach unity is Mr Qalibaf. He has so

many opponents in the hardliners’

camp but is supported by some parts of

the Revolutionary Guard,” added one

journalist.

“He has a record of trying to appease

all groups, which has made many mis-

trust him.” Some hardline groupshave

said Mr Qalibafdoes not exemplify the

spirit of the 1979 revolution, which

promised social justice — not the luxury

lifestyle he is associated with. Many in

Tehran still balk at the roughly $1bn bill

for the multi-level Sadr expressway that

encircles the city.

“Mr Qalibaf should answer for the

huge debts he left for Tehran’s develop-

ment,” said Saeed Laylaz, a reformist

analyst.

Paydari, a group close to Ayatollah

Mohammad-Taghi Mesbah-Yazdi, a

senior hardline cleric, who believesthe

Islamic republic derives its legitimacy

from God, has rejected Mr Qalibaf’s can-

didacy.It backs Morteza Agha-Tehrani

as Speaker, analysts said.

“Hardliners have no fundamental

divisions but too many candidates have

fuelled rivalry,” said Mohammad Ali

Abtahi, a former vice-president. “They

use the same bitter language they have

long used to undermine reformists

against each other now.”

Mr Laylaz added: “They are so confi-

dent of their victory that they are now

fighting with each other.”

Parliamentary election

Iran hardliners divided over Tehran candidate

Mohammad Baqer Qalibaf: made his

name as mayor of the capital city

H E N RY F OY— MOSCOW

M I C H A E L P E E L— BRUSSELS

Russia has been ordered to pay $50bn

to the former owners ofYukos, after a

Dutch appeals court overturned apre-

vious ruling, i n the latest twist in a

15-year legal battle over the break-up

of what was the country’s biggest oil

company.

The decision by The Hague Court of

Appealyesterday reinstated theworld’s

largest ever arbitration ward, aftera

former shareholders claimed that

Yukos was illegally expropriated by the

Russian state following the jailing of its

former chief executive,Mikhail Kho-

dorkovsky, who at the time was Russia’s

richest man and a vocal critic of Presi-

dent Vladimir Putin.

Mr Khodorkovsky’s 2003 arrest and

10-year imprisonment on tax and fraud

charges —largely seen by international

observers as politically motivated — and

the subsequent break-up of Yukos and

sale tomostly state-controlled oil com-

panies marked awatershed momentfor

Mr Putin’s rule.

The Kremlincharacterised the arrest

aspart of a crackdown on oligarchswho

had become rich by taking control of the

Russia’s natural resource assets, and an

effort to re-establish the supremacy of

the state after the chaotic decade that

followed the collapse of the Soviet

Union.

The ruling came weeks after Mr Putin

said he would seek to give Russian law

precedence over international law and

yesterday Moscow said it would appeal

against the judgment in the Nether-

lands’ Supreme Court.

“This is a victory for the rule of law,”

said Tim Osborne, head of GML, a hold-

ing company for former Yukos share-

holders. “The independent courts of a

democracy have shown their integrity

and served justice. A brutal kleptocracy

has been held to account.”

Following Mr Khodorkovsky’s arrest,

the Russian government seized Yukos

assets to account for what it said were

billions of dollars in unpaid tax. The

assets were subsequently sold off,

mainly toRosneft, the Kremlin-control-

led oil company that is ussia’s largestR

crude producer.

The Yukos shareholders were initially

granted the $50bn award in2014 by a

Dutch arbitration panel ruling, but it

was overturned by a district court in

2016. The appeal courtyesterday ruled

that decision “was not correct. That

means the arbitration order is in force

again.”

The 2014judgment was highly critical

of the Russian government, accusing it

of a “full assault on Yukos and its benefi-

cial owners in order to bankrupt Yukos

and appropriate its assets while, at the

same time, removing Mr Khodorkovsky

from the political arena”.

It is unclear how Yukos will seek to

enforce the Dutch ruling, which is the

equivalent of roughly one-sixth of Rus-

sia’s 2020 state budget.

N E I L M U N S H I— LAGOS
J O S E P H C OT T E R I L L— JOHANNESBURG

Africa’s resource-dependent econo-

miesarebracedforaslowdownascoro-

navirus itsh demand from China, one

of their biggest buyers,sending oil

prices lower and prompting the IMF to

slashgrowthforecastsforNigeria.

The IMFdowngraded itsforecast for

Nigeria, the continent’s largest econ-

omy, from 2.5 per cent to 2 per cent, cit-

ing falling oil prices, as it urged Africa’s

biggest crude producer todiversify its

economy. Oil provides more than half of

Nigerian government revenues and 94

per cent of its foreign exchange, accord-

ing to the IMF.

Oil prices ave fallen about 13 perh

cent this year on plungingChinese

demand, reflectinga slowdown in eco-

nomic activity caused by the virus.

The impact of coronavirus willbe a

further blow to the 21 African countries

defined as resource-intensive by the

IMF. A slowing Chinese economy had

already hit trade between Africa and

China, which grew 2.2 per cent last year

to $208.7bn, compared with a 20 per

cent rise a year earlier.

While China takes just over 1 per cent

of Nigeria’s oil,its buyers accounted for

95 per cent of South Sudan’s exports and

61 per cent of Angola’s in 2017, in the

form of crude oil, according toMIT’s

Observatory of Economic Complexity.

China took 58 per cent of Eritrea’s,

mostly in zinc and copper ore. For the

Democratic Republic of Congo, the fig-

ure was 45 per cent, mostly in the form

of cobalt shipments.

Angola, which is the continent’s sec-

ond-biggest oil producer after Nigeria

and has deep ties to the Chinese market,

has reportedly already diverted some

cargoes destined for the country

because of lack of demand.

Given such reliance, “a double

whammy of lower export volumes on a

hit to Chinese oil demand plus a lower

oil price could be something of a perfect

storm [for African economies] without

some sort of stimulus [in China],” said

Vikram Lopez, analyst at RenCap.

Additional reporting by David Pilling

Africa growth

set to suffer

as outbreak

cuts demand

South Korea’s president warned that

“emergency steps” were needed to

prevent acrisis in the country’s

China-reliant economy, as the fallout

from thecoronavirus outbreak

reverberated across the globe.

President Moon Jae-in called for

“all possible measures” to support the

South Korean economy, as Singapore

also unveiled a S$6.4bn ($4.6bn)

stimulus package to offset the impact

of the virus. This came a day after

analysts said Japan faced arecession

as the virus disrupted regional supply

chains and exports.

“We should take all possible

measures we can think of” to support

the economy, Mr Moon told a cabinet

meeting. “The current situation is

more serious than we thought... we

need to take emergency steps in this

time of emergency.”

Underlining the impact from the

virus,Apple, whose iPhones are built

in China, admittedrevenues would be

lower han forecast becauset

disruption from the disease had

“constrained” production.

The biggest exporters in South

Korea, such asHyundai Motor, have

also been badly hit by the delayed

shipments of parts from China. The

country buys about a quarter of South

Korea’s exports.

The growing economic fallout has

prompted leading Asian economies to

announce stimulus and monetary

measures to counter the slowdown,

with China’s central bank this week

lowering a benchmark lending rate.

South Korea, Asia’s fourth-largest

economy, has already announced a

Won420bn ($356m) emergency plan

to offer loans to struggling airlines,

shipping companies, travel agencies

and retailers facing a virus-related

liquidity crunch.

Park Chong-hoon, head of research

at Standard Chartered in Seoul, said

the latest developments would ensure

gross domestic product growth was

below last year’s 2 per cent. “The

Korean economy is losing momentum

again just when it was about to slowly

recover,” he said.

Singapore’s stimulus package

included a job support scheme;

corporate income tax rebate; and

additional support forsectorssuch as

tourism, retail and aviation.

“If needed, we can and are

prepared to do more,” said Heng Swee

Keat, the city-state’s finance minister.

The virus could also tip Japan into

recession after its economy shrank at

an annualised rate of more than 6 per

cent in the final quarter of 2019

following a rise in its consumption

tax. This was before the outbreak

shut down tourism from China and

disrupted supply chains for Japanese

companies. A second consecutive

quarter of falling output, which many

believe is likely, would plunge the

country into a recession.

Economists also expect China’s

growth to cool sharply due to the

virus, although the extent of the likely

slowdown was under debate.

Goldman Sachs, which tracks

various measures to gauge the virus

impact, said the amount of coal

consumed by the large electricity

producers had been a third lower in

the first 16 days of February than

“normal seasonality would suggest”.

Song Jung-a and Stefania Palma

South Korea

Seoul warns of

economic hit

Health fears: quarantine officials disinfect a dormitory for Chinese students at Chosun University in the South Korean city of Gwangju YNA/dpa—

Legal battle

Dutch court

rules Russia

must pay

former Yukos

owners $50bn

‘The independent courts

have shown their integrity.

A brutal kleptocracy has

been held to account’

‘The Korean economy

is losing momentum

again just when it was

about to slowly recover’

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Art of persuasoverdisputedpainionting of Jane AusMystery deepensten

Austen’sdescendantsinsisttheRiceportraitdepictsherasagirl—seemagazineBridgeman Art Library

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FEBRUARY 4

2017

THE RISE OF ECO-GLAM

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