Financial Times 04Feb2020

4 ★ FINANCIAL TIMES Tuesday4 February 2020

ST E FA N I A PA L M A— SINGAPORE

N E I L M U N S H I— LAGOS

J O H N R E E D— BANGKOK

Singapore’snewlaw against “online

falsehoods” as drawn theh city state

intolegal fightswith a political opposi-

tion party, an independent news outlet

and neighbouring Malaysia inattempts

to fight the fake news phenomenon.

Under Singapore’sProtection from

Online Falsehoods and Manipulation

Act (POFMA), the government can iss-

ue a “correction notice” to an individual

or organisation if it deems online con-

tent about a public institution to be false

or misleading and amending it to be in

the publicinterest. The clause hasbeen

deployed nine times since being

adopted in October.

Criticsof the law say the primary tar-

gets have been civil activists,non-gov-

ernment organisations and opposition

figures —which the government says si

an “unfortunate coincidence”. Technol-

ogy companies, academics and human

rights groups have raised concerns over

the latitude the law grants the govern-

ment, but countries such as Nigeria and

Thailandare aiming to emulatethe law.

Singapore’s measures echo efforts by

governmentsworldwide to fight online

misinformation amid concern over the

impact of fake news on elections.

France as beenh criticised or clamp-f

ing down on civil liberties with two laws

in 2018after allegations ofMoscow’s int-

erference inits 2017 presidential elec-

tion. These allow judges to halt publica-

tion of “false information” in the three

monthsup to a national poll and net-

works with foreign links to be taken off

air if they deliberately share “false infor-

mation”.Germanyin 2017 passed a law

letting government fine sites that fail to

cut slanderous content up to €50m.

In Singapore the legislation goes fur-

ther; publishing false statements with

“malicious intent” could entail fines of

S$1m (US$730,000) and jail sentences

of up to 10 years. Singapore issued a cor-

rection notice to Malaysian human

rights watchdog Lawyers for Liberty for

writing in a report thatprison officers

on the island nation’s death row kicked

and broke prisoners’ necks during

hangings if the rope snapped.

Liberty filed a lawsuit againstthe city

state in the high court in Kuala Lumpur,

claiming the POFMA notice encroached

on free speech in Malaysia. Liberty re-

fused to amend the report and Singa-

pore blocked accessto the NGO’s

website. Singapore’s ministry of home

affairs said it was unable to comment.

Meanwhile, independent news outlet

The Online Citizen, which last month

received a correction notice for sharing

Liberty’s report, filed an appeal against

POFMA at the high court, with the first

hearing set for Thursday.

The opposition Singapore Democratic

party received a correction notice in

December over online posts reporting

rising redundancies and unemploy-

ment. Theparty, which has filed an

appeal atcourt, argues it has not made

verifiably false statements. Chee Soon

Juan, SDP leader, said it wasthe party’s

right to express “interpretations” and

“opinions” based on statistics.

Linda Lim, a Singaporean business

professor at the University of Michigan,

said use of the law “confirms fears that

many of us had”. She said: “The distinc-

tion between ‘fact’ and ‘opinion’ is not

always clear [in the bill’s implementa-

tion] and the injury to the public inter-

est is not convincingly demonstrated.”

Cherian George, associate dean at the

Hong Kong Baptist University’s school

of communication, said thelaw could

give the public “the impression that offi-

cials are unable to win these debates by

force of argument alone”, andmoves

against opposition politicians had noth-

ing to do withtackling violent extrem-

ism or hate propaganda, some of thejus-

tifications for introducing thelaw.

Nigeria ispassing a similar bill despite

outrage from civil society groups, and

Thai authorities have cited Singapore as

a model for anAnti-Fake News Centre

set up bygovernment last year.

Additional reporting by Domitille Alain

Misinformation crackdown

Critics of Singapore’s fake news law fail to deter other nations

Chee Soon Juan: says it is the SDP’s

right to comment based on statistics

INTERNATIONAL

H U D S O N LO C K E T T A N D N I C O L L E L I U
HONG KONG
S U N Y U— BEIJING
N AO M I R OV N I C K— LONDON

Chinese stocks tumbled as traders
reacted negatively to the spread of the
coronavirus outbreak, in the first day of
trading since their return from an
extended lunar new year holiday.
The CSI 300 index of Shanghai nda
Shenzhen-listed equities fell as much as
9.1 per centyesterday to mark the worst
opening in nearly 13 years.
The drop came despite the central
bank pumpingRmb1.2tn ($171bn) ni
additional liquidity into the financial

system — its biggest one-day open mar-

ket operation since 2004 — to help cush-

ion the blow of the virus outbreak.

The benchmark index closed 7.9 per

cent lower, marking its worst day since

August 2015, with more than four out of

fivelisted companiesdown by the maxi-

mum 10 per cent daily limit, according

to data provider Wind. The CSI 300’s fall

wiped off about $358bn in stock market

capitalisation, according to a FT esti-

mate based on Bloomberg data.

Brent crude, the international bench-

mark, fell into bear territory by drop-

ping 3 per cent to its weakest level for 13

months, pushing losses to more than 20

per cent since early January.

The brutal day for markets came as

Russia said it would ban foreigners

arriving from most entry points in

China and had implemented emergency

measures that would allow it to deport

any foreign citizens found to be carrying

coronavirus. The measures will not

apply to government officials, people

with Russian residence permits or citi-

zens of the Eurasian Union of central

and north Asian states, and those arriv-

ing at Moscow’s biggest airport.

China reported 17,302 confirmed

cases of thecoronavirus nd 361 deathsa

as of the end of Sunday. The number of

infections exceeds the total during the

outbreak of severe acute respiratory

syndrome, or Sars, in 2002-2003, which

caused months of market turbulence in

China. The sell-off was contained to

mainland China as traders there caught

up with the falls across global stock mar-

kets over the past 10 days. Other Asian

equities were more stable, with Japan’s

Topix falling 0.7 per cent.

Wall Street also made gains, with the

S&P 500 rising 0.8 per cent in early

morning trading, after its gains for the

year were wiped out in a sharp sell-off in

the previous session.

The onshore renminbi weakened 1.

per cent to Rmb7.0138 per dollar, falling

back through the key 7.0 threshold and

on track for its worst day since August.

One trader at a brokerage in Shanghai

said there were signs the so-called

national team of Chinese state-run

institutional investors was buying

stocks to help underpin the market.

China’s securities regulator also told

mutual funds to limit net daily sales of

large-cap stocks to Rmb100m and sales

of small-cap stocks to Rmb10m, accord-

ing to a Shanghai-based fund manager.

“Our job is to keep panic selling to a min-

imum level,” the fund manager said.

The People’s Bank of China also cut its

seven- and 14-day reverserepo rates yb

10 basis points each shortly after mar-

kets openedyesterday to 2.4 per cent

and 2.55 per cent, respectively. That

lowered the cost of short-term loans

from the central bank and boosted

interbank liquidity.

Additional reporting by Alice Woodhouse

in Hong Kong, Henry Foy in Russia, Philip

Georgiadis and Myles McCormick in

London

Lex age 12p

K AT H R I N H I L L E— TAIPEI

Wang Feng began the 1,000km journey
home to celebrate the lunar new year
uncertain whether she would return to
Kunshan, near Shanghai, where she had
worked at a large smartphone factory
for the past year.
The 24-year-old said she was tired of
screwingplastic parts together. Like
millions of other migrant workersin the
country, she intended to use the holiday
to think about a new job less boring or
closer to her family.
The coronavirus outbreak has made
the decision for her. A day aftershe
arrived home in Yanjing, n the centrali
Chinese province of Hunan, the govern-
ment closed off Wuhan where the out-
break started, and then almost the
entire surrounding Hubei province.
“I can’t get back to Kunshan now, it’s
unclear how to get there. For now, we
are all waiting,” Ms Wang said.
The suspension ofeconomic life in
much of the country hasleft migrant
workers in limbo. The disruption is
expected to tighten the labour market
in some areas, whileaccelerating a shift
from the mass long-distance labour
migrationChina has long relied on.
The country has 288m migrant work-
ers, more than a third of the total labour
force of 775m, according to 2018 data
from the National Bureau of Statistics of
China, the latestfiguresavailable.
Outside Hubei, local authorities have
suspended some long-distance bus serv-
ices and builtcheckpoints. Fear has
crept in. Many villages and towns have
put up makeshift roadblocks to try to
prevent visitors bringing infection in.
By yesterday the virus had infected
17,302 in China and killed 361, plus one
in the Philippines.
Ms Wanghadtravelled to Kunshan
via Hubei, as the closest long-distance
bus link was through Wuhan. While a
different route was possible, there was
no reliable information, she added.
She and many other migrant workers
remain grounded and for many there is
no rush to attempt the journey back to
work as a third of China’s 31 provinces,

including the largest industrial hubs,

have delayed the return to work by a

week to February 10.

Concern is growing mong businessesa

that disruption will last even longer.

“There is no way we will return to a nor-

mal labour market anytime soon,” said

Li Cheng-hung, president of the Associ-

ation of Taiwan Investment Enterprises

on the Mainland, agroup that includes

tens of thousands of Taiwanese-owned

companies all over China.

“There will definitely be labour short-

ages, especially here in Shanghai,”

added Mr Li, who runs Shanghai Karon

Valves Machinery, the China-based

affiliate of his family’s business making

industrial and environmental valves.

DHL, the logistics group, also warned

this week companiesin China would

have to be braced for labour shortages

as the transport suspensions and quar-

antine measures would hinder migrant

workers from returning towork.

Thecentral hinterland, which inclu-

desHubei province, has long been the

most important source of migrant

workers for thetwo largest manufactur-

ing hubsaround Shanghai and Guang-

dong province, which borders Hong

Kong. In the six centralprovinces inclu-

ding Hubei and Hunan, 38.9m, or 60 per

cent of migrant workers from the area,

went to other provinces to work in 2018.

Some analysts note that the disrup-

tion tothe labour market could have

been far worse had a transformation not

started a decade ago which has seen

manymanufacturers move inland,

closer to the source of their migrant

labour, partly to secureit cheaply.

Apple uppliers Foxconn, the world’s

largest contract electronics maker and

China’s largest private sector employer

with a headcount of 1m, has shifted its

largesthub to Zhengzhou, Henan’s pro-

vincial capital, from Shenzhen in

Guangdong province. As a result, only

75.9m migrant workers left their home

provinces n 2018, with the rest stilli

migrating, but forshorter distances.

This development means “the need

for cross-provincial travel may not be so

significant”, said Geoffrey Crothall of

the China Labour Bulletin, a Hong

Kong-based group that works on labour

rights in China.

“It is possible that some employers

will simply decide to give staff extended

unpaid leave. The government has

already issued a notice saying it is illegal

for companies to fire staff who cannot

work because of the epidemic and quar-

antine measures.”

AtPegatron, the Apple supplier where

Ms Wang worked, executives are still

assessing what impact thevirus will

have had on the labour force when the

plant is allowed to restart. One execu-

tive said the plant, which employed tens

of thousands, could use the usualturno-

ver after the lunar new year to downsize

as the company had already startedlift-

ing production in south-east Asia in

response to the US-China trade war.

Ms Wang, however,said: “This dis-

ease might be around for much longer. I

feel safer not travelling so far away.”

N I C O L L E L I U A N D A L I C E WO O D H O U S E

HONG KONG

N AO M I R OV N I C K— LONDON

Hong Kong will close most of its border

crossings with mainland China in a fur-

ther push to control thecoronavirus

outbreak that started in the city of

Wuhan and has spread worldwide.

Carrie Lam, the territory’s chief execu-

tive, announced the suspension of 10

crossings from midnighttonight, in an

extension of an earlier move to shut

some cross-border ferries and high-

speed rail services.

The move excluded the city’s airport,

the port of Shenzhen Bay and the bridge

connecting Hong Kong to Macau and

Zhuhai. But Ms Lam added the number

of flights to the mainland would be fur-

ther reduced and encouraged Hong

Kongers not to travel there. Hong Kong

has 15 confirmed cases of the virus,

according to official Chinese govern-

ment statistics.

Ms Lam’s decision fell short of

demands by medical workers, who had

called for the city to block entry entirely

from mainland China.

Yesterday more than 2,500 medical

staff went on strike over anger with the

government’s handling of the coronavi-

rus outbreak. The Hospital Authority

Union said it would step up its action,

with more members going on strike to

protest against the government’s failure

to meet its demands.

Theoutbreak has sparked new con-

cerns about the city’s economy, which

recorded its first annual decline since

the global financial crisis following

months of anti-government protests in

2019 and the US-China trade war.

The economy contracted by 1.2 per

cent last year compared with 2018,

according to preliminary government

figures, and was down by 0.4 per cent in

the final three months of 2019 com-

pared with the previous quarter.

The government added the outlook

for2020 was subject to “high uncertain-

ties”, citing the coronavirus outbreak,

US-China trade tensions and the pros-

pect of continued social unrest.

Iris Pang, an economist at ING, said

there was little sign of a near-term

recovery for the economy and forecast it

would shrink by 4 per cent in the first

quarter of 2020. “The economy is in a

very dismal situation,” she said, point-

ing to lingering concerns aboutcon-

sumption, tourism and investment.

The anti-government protests,which

crippled the city in the second half of

2019, have become smaller in size and

less frequent. Anger at the government

is now focused on its handling of the

coronavirus outbreak.

Visitor arrivals to Hong Kong fell by

more than 50 per cent year on year in

December, taking the fall for the full

year to 14.2 per cent as mainland Chi-

nese tourists stayed away.

With fewer mainland tourists and

many staying at home to avoid protest-

related disruption, retail sales fell by

almost a quarter in November com-

pared with a year earlier. Retaildata for

December will be releasedtomorrow.

Editorial Comment age 10p

Markets Insight age 24p

Coronavirus triggers China stock sell-off

Worst opening in 13 years

prompts regulators to tell

mutual funds to cap sales

The drop came despite the

central bank’s biggest

one-day open market

operation since 2004

Containment effort

Hong Kong

shuts borders

with mainland

amid anger at

‘mishandling’

Economic fallout. abour forceL

Epidemic leaves migrant workers in limbo

Measures to counter outbreak

interrupt domestic travel and

spark job-seeking closer to home

Off track:

travellers

await train

information

at Kunshan

station. Many

workers cannot

get back to their

jobs in the city

Qilai Shen/Bloomberg

‘There will

definitely

be labour

shortages,

especially

here in

Shanghai’

288 m

Number of

migrant workers

in China, more

than a third of

the total labour

force

60 %

Percentage of

workers who left

the six central

provinces,

including Hubei

and Hunan, to

work in other

provinces in 2018

17,

Number of

people infected

with the

coronavirus in

mainland China,

as of yesterday,

with 361 deaths

ealth alertH

STOCK MARKETSMar 30prev %chgWorldMarkets

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CURRENCIES$ per €$ per £Mar 311.0701.2511.0741.249prev

SFr per €£ per €¥ per $€ index¥ per £111.430 111.29588.767 89.046139.338 139.0350.8551.0711.0690.859$ indexSFr per ££ per $€ per £¥ per €£ index€ per $119.180 119.476104.536 104.636Mar 3177.226 76.7050.8001.2521.1690.9350.801prev1.2441.1640.

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