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Banks, insurers join Alibaba, Tencent in donating to efforts to fight coronavirus outbreak

Chad Bray, Enoch Yiu chadwick.bray@scmp.com

Foreign banks, insurers and other financial companies have announced plans to donate millions of dollars in recent days to help fight the spread of the coronavirus epidemic that has already reached all of the mainland's provinces.

Many of those same companies are also making big bets on China's future growth as the country's financial services sector further opens up, with several seeking to take controlling stakes in their local joint ventures.

On Monday, UBS said its China business would donate US$1 million to "frontline responders" in China to help fight the spread of the deadly virus, while Allianz (China) Insurance Holding and its corporate parent, Allianz, said they would set up a 4 million yuan (US$570,000) emergency response fund to help tackle the outbreak.

"This is a challenging time for many of our employees and customers, their families and the local community," David Chin, head of UBS's Asia-Pacific investment banking operations and its China country head. "It is a critical time for us to give back to the community and help authorities in the most affected areas."

UBS received approval to take a controlling stake in its China joint venture in November 2018 and expects to take full control of the business this year. Allianz also won approval in 2018 to move forward with the country's first fully foreign-owned insurance holding company.

The viral outbreak is believed to have originated in Wuhan in Hubei province and has now infected more than 17,000 people worldwide, killing at least 362 people.

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It comes at a challenging time for the Chinese economy, which has been slowing amid a trade war with the United States that has raged for 18 months.

A phase-one deal between the US and China signed in January was expected to ease some pressure on the economy, but the coronavirus emerged at the start of the Lunar New Year holiday " a peak time for travel in the mainland " and raised fears that consumption could be hit as mainlanders avoid restaurants, cinemas and shopping malls.

Many banks, insurers and asset managers have been closely watching the trade discussions in recent months as Beijing has accelerated plans to further open up the financial sector, including removing shareholding limits on foreign ownership of various financial firms.

For financial firms and many other companies, donations to the communities they serve during times of calamity " from natural disasters to pandemics " are not uncommon. For example, Jefferies raised A$4 million (US$2.7 million) last month to benefit victims of Australia's deadly bush fires.

But the rapid spread of the coronavirus has caused corporate leaders across a variety of sectors to announce donations to try to assist in research or relief efforts associated with the virus.

Some of China's biggest new-economy companies, including Alibaba Group Holding, Tencent Holdings and Meituan Dianping, said last week that they would donate more than 3 billion yuan collectively to help alleviate shortages and hardships related to the outbreak. Alibaba is the parent company of the South China Morning Post.

China Resources Beer Holdings, the brewer of China's best-selling beer, Snow, said on Monday it had donated 15 million yuan to charities in Wuhan to procure masks and other medical supplies.

The Bill and Melinda Gates Foundation and Alibaba founder Jack Ma's foundation have both announced large donations to fight the outbreak, as have companies such as Cargill, Dell and Microsoft.

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On Thursday, JPMorgan said it would donate US$1 million to the China Foundation for Poverty Alleviation to support relief efforts, including procuring and distributing medical supplies. JPMorgan applied in January to take full control of its futures joint venture in China and won approval late last year to open a majority-owned securities business in China.

French bank Societe Generale said on Monday that it would immediately donate 150,000 yuan to the Hubei Charity Federation to support local needs and requirements.

HSBC's mainland businesses, including HSBC Bank China and HSBC Life China, have jointly donated 7 million yuan to 10 hospitals in the Hubei province, as well as to China's National Center for Disease Control and Prevention. HSBC is making a big bet on the potential of the Greater Bay Area, which would link Hong Kong and Macau with nine mainland cities in the Pearl River Delta.

Several other banks are expected to announce in the coming days that they will also make donations to support relief and research efforts.

In addition to donations, several international insurers, including AIA, AXA, HSBC Life and Prudential, have agreed to offer additional payouts to policyholders if they are infected by the coronavirus.

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This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.