Covid-19: The Race Back to Work
March 31, 2020
China began the New Year with an unusually quiet Spring Festival, one that included staying at home, not traveling, and abstaining from the all-important and traditional family visits and the parties. A virus had emerged, and it had rapidly grown into an epidemic. As it spread throughout the country, social distancing proved to be a small sacrifice for the common citizen in comparison to the contributions of the medical workers and the efforts of the government.
These measures were very effective but they caused great distress to exporters and their employees: their burning concern was to get back to work.
In China, the epidemic reached its peak around February 20, 2020. When seeing this inflection point, most manufacturers were itching to resume work due to the pressure of backlogged orders to fulfill, both domestically and overseas. (But now that suppliers are returning to normal, buyers worldwide are asking to delay orders and new orders are drying up as the virus impacts businesses around the globe. Stay tuned for an upcoming blog on this topic.)
On February 17, China’s Virus Prevention and Control Department issued a statement that confirmed that various regions could restore economic and social order subject to confirmation of the local situation. This meant that the epidemic was coming under control, and many companies could slowly re-start operations.
Coastal cities and the Yangtze River Delta region reacted especially quickly in getting back to production compared with other parts of China.
On February 16, Yiwu, famous for its huge consumer goods market, actually fired the first shot by returning to work with its employees.
On the same day, Hangzhou set up a special train service to Guizhou, Henan, and Sichuan provinces to bring back the workers that had gone home for Chinese New Year. The Hangzhou government and enterprises worked together to subsidize their travel expenses.
On February 18, Suzhou Industrial Park also issued a statement allowing for work to resume.
Guangdong province was also an early bird in taking action to resume work. Starting in the second half of February, Guangdong took the lead in releasing 20 measures to support enterprises’ return to work, including rent reduction, tax deferment, loan payment delay, and interest rate reduction.
In Guangdong, Guangzhou and Dongguan were the first cities to resume work. By February 10, more than 4,500 enterprises in these two cities had reopened and 80% of them were manufacturers.
Gradually, Zhejiang, Jiangsu and other developed provinces announced they would be resuming work, one after another, with policies to make it easier for employees to return. These policies included charter buses and trains to pick up employees from their hometowns, government subsidies for special workers or technicians, and recruitment subsidies of up to 300,000RMB for enterprises.
Great cities throughout China have anxiously resumed work by now. However, safety first: there are still some cities under rigid restrictions due to the virus. For example, for a major project to resume work in Luzhou city, Sichuan province, nine official seals are required. This means they will need approval from 9 government departments in order to go back to work – as per the illustration below.
We were caught between problems: besides the fear of the epidemic, there was also fear of businesses failing and of an economic recession. The first problem had to be fixed before businesses could proceed with confidence on getting back to work. Now we appear to have passed the hardest time in this challenging situation. Most parts of the country are expected to resume normal work by the end of April or early May.
Sourcing Team Leader, Beijing, China
Edits by Jocelyn Trigueros