For business owners in China, a touch-and-go reopening after zero-COVID
For business owners in China, a touch-and-go reopening after zero-COVID
In early January, in anticipation of the lunar new year, China’s top executives made a rare appearance on the government broadcaster, CCTV. First up, the head of beverage giant Wahaha, Zong Qinghou.
“China’s economy will recover, and it may even go through a period of high-speed development,” he said.
Next up was Cao Dewang, the founder of Fuyao Glass. He set up a factory in Ohio that was the subject of the 2019 documentary “American Factory,” which later won a 2020 Academy Award for Best Documentary Feature.
Cao is just as optimistic.
“You ask where my confidence in China’s economy comes from?” he said. “It comes from our sense of responsibility as Chinese people.”
In total, 21 executives of the biggest firms were trotted out to trumpet China’s economic prospects. The Chinese economy grew at a mere 3% in 2022, which except for 2020, was the slowest year in decades. However, global investors are optimistic China will rebound this year after the Chinese government all but dropped its zero-COVID policy in early December. There is hope that China can help offset some of the economic slowdown in the U.S. and Europe.
However, the large companies that spoke to government broadcaster CCTV are not representative of most Chinese businesses, since they didn’t get hit as hard, according to Chen Weiming, an entrepreneur in Shanghai.
“Companies that sell everyday products — take the beverage group, Wahaha — well, people still need drinkable water, right? But the lockdowns didn’t just bring local governments to their knees, they also broke many supply chains,” he said, adding that his supply chains also stalled for a while.
Chen runs a bath products company called Desire and Passion. He sells products mainly to golf courses.
Last year, snap lockdowns first at Chen’s manufacturing base in eastern Jiangsu province, and then at his headquarters and warehouse in Shanghai, meant his business was not able to operate for 81 days straight. Chen himself was not even allowed outside of his apartment complex from March until June during Shanghai’s strict lockdown.
“I have lost a lot of clients. I couldn’t distribute my stuff, so, clients turned to other suppliers. And once they’ve switched, it is hard to get them back,” he said.
Chen was among those who were eager for China to reopen.
But one restaurant owner in central Henan province did not initially share that sentiment.
“Now that the country has reopened, I can’t see any hope,” he said in mid-December in a video on TikTok’s Chinese sister site, Douyin.
Using the name “Old Salted Fish,” he said half of his staff of 20 caught COVID and he has had to fill in himself. A week later, his customers became ill or were too afraid to come out.
“Reopening was supposed to restore freedom and let us get back to our normal lives. But how is this freedom? There’s no one on the streets,” he said.
China’s reopening has been chaotic.
“It was too sudden,” Chen said. “The government didn’t provide the medical services needed to cope with so much death and sickness in such a short time.”
China narrowed its definition of COVID deaths and initially only counted people who test positive and died from pneumonia or respiratory failure, which resulted in only a few dozen people recorded as having died from the virus in late November.
Under heavy criticism from the World Health Organization to be more transparent, the Chinese Center for Disease Control and Prevention then reported “COVID-related” deaths three times this month, totaling 79,000 in the current wave from Dec. 8th, 2022 to Jan. 26th, 2023. Still, the figure is an undercount since it only includes people who have died at hospitals.
“What if a worse COVID variant appears, will we go back into a lockdown?” Chen said.
Ambulance sirens are always in the background these days.
China’s chief epidemiologist, Wu Zunyou, said on his social media feed on Weibo in mid-January that 80% of China’s population have been infected with COVID and that the chances of a rebound within the next two to three months would be remote.
There are some signs to support this.
The restaurant owner who had complained about the chaos put a video update two weeks later showing every table booked.
“The people who’ve recovered are back!” he boasted.
However, there is still a lot of uncertainty aside from COVID such as the property crisis, U.S. sanctions against China and tensions over the Taiwan straits, and Russia’s war in Ukraine.
“I feel China’s economy is getting more sluggish, so I’ve moved to a smaller warehouse to reduce my costs and help my business survive longer,” Chen said.
Meanwhile, the top executives on government broadcaster CCTV said that they are confident China’s economy will blossom again “like flowers in the spring.”
“China’s economy will ride out the waves in 2023,” they repeated one after the other.
Additional research by Charles Zhang
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