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6 The world this week Business The Economist April 25th 2020

Alibaba, China’s biggest India, giving it a stake of 10%. £500m ($620m), Sir Richard
West Texas Intermediate e-commerce company, said it Over the past five years, 560m Branson offered to put his
Crude oil, May futures price, 2020
$ per barrel would invest 200bn yuan people in India have gained private island in the Caribbean
60 ($28bn) in cloud computing access to the internet. Face- up as collateral in order to
40 over the next three years. book wants to tap that poten- secure the funds. His Virgin
20 Alibaba faces fierce competi- tial, noting the opportunity for Group retains a 51% stake in the
0 tion over cloud services in its connecting Jio’s small-busi- airline. Meanwhile, Virgin
-20 home market, and is eager to ness service with WhatsApp so Australia fell into administra-
-40 challenge Amazon and Micro- that shoppers can have “a tion after failing to obtain a
soft in international markets. seamless mobile experience”. bail-out in Canberra.
Jan Feb Mar Apr
Source: Datastream from Refinitiv
Cyril Ramaphosa, South Afri- Revenue at Huawei rose by Netflix signed up another
Oil prices tanked amid fore- ca’s president, announced a 1.4% in the first quarter com- 15.8m subscribers in the first
casts that demand will tumble huge stimulus package worth pared with the same three quarter, twice as many as it had
this year. Brent crude dropped 500bn rand ($26bn) to shore up months last year, to 182bn yuan forecast, as people confined to
below $16.50 a barrel, a two- the economy, which was al- ($25.7bn). That was fairly their homes binged on its
decade low. May contracts for ready struggling before impressive given the trade war programming. Netflix now has
West Texas Intermediate, the covid-19, and fell into reces- and the outbreak of covid-19 in 183m users worldwide. Its share
benchmark for American oil, sion late last year. Millions of China, the telecoms-equip- price is trading at record highs.
fell into negative territory for people rely on informal work ment maker’s base country, One potential hitch is that its
the first time, plunging at one to make ends meet, which has though it was far below the production pipeline, the
point to -$40 a barrel, meaning been made harder by a strict 39% growth it chalked up a year source of recent hits such as
traders in effect paid for some- lockdown enforced by the earlier. The pandemic has “Tiger King”, has ground to a
one else to hold the commod- army. The government has delayed the roll-out of 5g halt because of the lockdowns.
ity. Concern that storage facil- turned to the imf and other networks in many countries, a
ities at a key delivery point global institutions for emer- key and controversial element
were full, just as the contracts gency health-care funding. of Huawei’s business. The Coke isn’t it
were due to be settled, added to company, which is privately Coca-Cola said that despite a
the panic. Prices surged later in Legislation to provide more held, did not state a net profit. solid start to the year, revenue
the week after Donald Trump than $300bn in additional aid fell in the latest quarter, when
stoked tensions with Iran. to small businesses wound its United Airlines raised $1bn in lockdowns came into force. For
way through Congress. The a sale of new shares, a week this month, its sales of soft
Baker Hughes, one of the money earmarked for firms to after securing from the govern- drinks have tumbled by 25%, as
world’s biggest providers of retain workers in the recent ment a direct grant worth restaurants and small stores
oilfield services, recorded a $2trn stimulus act has already $3.5bn and a low-interest loan shut. By contrast Procter &
$10bn quarterly loss, in part run out amid huge demand. of $1.5bn in a rescue deal. Gamble reported a bumper
because it has had to write quarter, boosted by shoppers
down the value of its assets. Facebook invested $5.7bn in After the British Treasury stockpiling toilet roll, cleaning
Jio Platforms, a telecoms and reportedly asked Virgin Atlan- products and washing powder.
tech firm that is part of the tic to re-submit its request for However, sales from grooming
Puff goes the dragon Reliance Industries empire in a bail-out, said to be worth gear were down a snip.
China’s gdp shrank by 6.8% in
the first quarter, year on year,
the first contraction in de-
cades. The economy is expect-
ed to pick up later this year,
though not enough to meet the
government’s ambitions.
China’s untrammelled growth
since the end of the Mao era
has boosted countless global
industries. Many hope that the
quarter’s decline is just a
pause, not an end, to the boom.

The news about the Chinese
economy did not stop bhp and
Rio Tinto, the world’s two
biggest mining companies,
from giving upbeat assess-
ments about their business in
China. bhp noted that most
industrial activity had restart-
ed there and that if a second
wave of infections was avoid-
ed, steel production could rise
this year.