The journey to economic recovery has begun in China, with companies reopening according to measures of freedom accorded each state, town and province. The resumption of businesses was paramount in the wake of the fight against coronavirus that has ravaged the second largest economy in the world.
In early February, the Chinese authorities’ plans for companies to return to work were jeopardized by an increase in the number of new coronavirus cases, forcing the government to concentrate on the fight against the virus. However, March has proved different, with Wuhan, the most hit state in China being cleared for movement to an extent that allows for business interaction, the economy appears set on the path of recovery.
On March 10, the Chinese government asked workers in Wuhan to go back to work as a number of cases started to recede and there were no more new records. The city of 11 million people has been on lockdown since January following the outbreak of COVID-19 that has brought not only China, but the whole world on its knee.
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The Chinese government has been making efforts to save its economy from totally crumbling by rolling out financial measures to keep companies in business, but the most important step to economic recovery is getting the industries working again.
However, the little move to return to work shows hope that in time the humming and bubbling in the factories will return in full capacity.
French automaker Peugeot has resumed car production at its plant in Wuhan city. The company has been in partnership with Chinese DongFeng Motor Group, and they have other plants in Chengdu and Xiangyang where they produce vehicles. Their resumption signals the city’s return to business life.
Though some precautionary rules are still in place to put health concerns first: Workers enter in shifts staggered to minimize exposure, there are infrared cameras and security staff check temperatures as they arrive, and the workplaces are disinfected three times a day. Not more than six people are allowed in the elevators, there are tapes on the floor to show where to stand. Face to face meetings are discouraged and people eat alone in the cafeteria using cardboard to shield their faces as protection when masks are removed.
These measures have encouraged workers to return to work. According to data released by Baidu, anonymous movement of some users suggests that more than 90% of restaurants and 85% of malls in Beijing have now reopened. The TAC Index, a Hong Kong company that tracks cargo industry, also shows that there has been an increase in factory activities in the month of March.
Foxconn, the manufacturing company that makes iphones among other products, with the help of migrant workers said on Tuesday that the company is resuming at 50% capacity. Ren Zhengfei, the chairman of Huawei said on Wednesday that more than 90% of his 150,000 employees have returned to work. Companies appear to be returning to work with economic and medical considerations in mind.
The chief marketing officer at AI-focused companies, Anita Huang said companies in Shenzhen and Guangzhou are mainly back to normal while those in Beijing are still working in split shifts.
“Even now, we all wear masks everywhere we go and in the office, and we wash our hands religiously,” she said
A host of companies are going back to work as the Chinese government relaxes its rules to allow life return to normal. But as the cases reduce and the governments grant people freedom to move around and do business, other unforeseen realities are coming with it.
As expected, businesses will struggle to get back to bubbling again and many companies will lay off workers as a result. One thing the Chinese industries didn’t see on the ‘aftermath of coronavirus’ menu is the stigmatization that has suddenly sprung up against products of Asian origin, especially China.
While local businesses need the patronage of locals to stay in business, major companies in China have depended on international patronage. But the rest of the world appears wary of Asian made goods, major reason being the conspiracy theories that have followed the coronavirus outbreak.
Moreover, the rest of the world is still battling with the pandemic as China is taking recovery steps. And that means little interest in business for now as the focus is on survival. Every country is shutting down borders and restricting flights from other countries in a bid to limit the virus, and China being the origin appears to spell doom for goods and services from the South Asian country.
Though there is hope. As supply chains from in the West begins to run dry, air freight rates from china moved up last week, a sign that the West may be forced to patronize China if the countries run out of supply, which is likely going to happen as the pandemic seems to be starting in the US, UK and Europe.
The major economic activities in these countries have been shut down and their measures of containment appear not to be yielding the needed results, which gives the West a little choice but to depend on Asian made products for supply.