Changes in the Chinese business landscape post lockdown – What can we learn and how can we prepare?
Following Wuhan’s lockdown on January 23, as well as the other cities in Hubei Province which followed suit, many places in China issued strict travel control regulations and set up checkpoints at entrances/exits of communities and highways. In some places, it was hard to leave your community without the necessary requirements.
With the spread of the virus being gradually controlled, the focus then shifted and looked instead to promote the restart of business, whilst still controlling the virus.
Because the virus outbreak occurred during the Chinese New Year holiday, lots of people stayed in their hometown rather than working in a city. Therefore, how to protect the returning population to the cities was one of the main difficulties faced.
In the middle of February, except for Hubei Province, some cities, such as Beijing, where I live, temporally adopted a regulation of 14 days home quarantine when returning from other cities. In order to avoid difficulties in employment and production, the management style in many cities changed immediately from “keep away from people” to “I want people to return”.
In Hangzhou, three high-speed trains were booked to welcome thousands of employees from Guizhou, Henan, and Sichuan for free. Yiwu sent buses to Yunnan, Guizhou, Anhui, and other places to pick up employees and take them back to work. And some companies even booked flights to take employees back. Many airlines such as China Southern Airlines, China Eastern Airlines and Xiamen Airlines customised private services for companies to restart their business.
There’s no doubt that the outbreak of COVID-19 had a huge impact on the economy and business. Businesses in the leisure and tourism sector, such as restaurants, transportation and movie theatres, were greatly impacted, especially as the Chinese New Year holiday was always a golden season for them. For example, on the first day of the 2019 Chinese New Year, China’s movie box office reached 1.4 billion, but this year, it was only 1.8 million.
For most companies, the current period is a difficult time, but we really have to work hard to carry on. I like one quote in particular from Jack Ma, he said;
“Today is very cruel, tomorrow is crueler. (The) Day after tomorrow is beautiful. Most people give up tomorrow night.”
I believe that after the pandemic, there will be a rebound in the economy and markets. The key is to find new opportunities and always be prepared to change.
After the pandemic, people have paid more attention to their health, the quality of their life and technology to support their new lifestyle. I think the economy will have some new growth points, such as remote office, remote diagnosis and treatment, remote classroom, smart city, better public health system construction, fitness and health, etc. Including the already well-developed logistics and delivery industry, which, during the pandemic period, became the support of many people. In the future, it will play an even more important role in people’s lives.
Looking at what happened in China, I would suggest that:
- For businesses that really need staff working on site, like manufacturing, make sure you plan well to ensure that staff can return to work after lockdown.
- Companies should be well prepared for getting “back to the office” including a safe working environment for staff and the community. For example, purchase enough protection equipment like masks, pay attention and be compliant with local COVID-19 prevention requirements, and issue safety guidelines, etc.
- Optimise cash flow. Collect the receivables and optimise the costs. Many countries issued benefits policies to help the economy rebound, such as tax deduction, exemption and refund, loans and financial aid, etc. Make sure you know what policies there are and how to apply for them.
Currently, COVID-19 is almost controlled in China, and things are almost back to normal here with careful protection. Most of the businesses have already restarted in China, but if people want to go to any public place then they must wear a mask and have a body temperature check. Recently, even Wuhan cancelled its lockdown regulation on April 8. We hope to see the world make it through soon. Stay safe and healthy!
This article was courtesy of Chao Mu, International Affairs Officer at Baker Tilly China.