Stalled Chinese Economy... Still 'Cold' Despite Resuming Operations on the 10th

-Factories Legally Allowed to Operate but Difficult to Meet Conditions, Resumption Not Possible
-"It May Take Time to Return to Work"

[Asia Economy Beijing=Correspondent Sunmi Park, Reporter Hyunwoo Lee] On the afternoon of the 9th, one day before the normalization of work across China, the streets of Beijing, the capital city, remained mostly deserted with most shops still closed and very little movement of people. Major shopping malls in Wangfujing, the downtown area densely packed with stores, were mostly open and operating normally according to government directives, but inside, over 90% of the stores were closed, leaving the malls empty.

Unlike other regions, Beijing ended the Spring Festival holiday on the 2nd and issued guidelines allowing companies to operate flexibly until the 10th. Despite this, the city remained empty even over the weekend. The manager of Dongfang Xintiandi, the largest shopping mall in Wangfujing, said, "It is normal to open after the 3rd, but we do not know when the stores will open and start business," adding, "This situation is expected to continue for the time being."

Although corporate activities and factory operations in China, which had come to a complete halt after the Spring Festival due to the spread of the novel coronavirus, legally resumed on the 10th, the atmosphere remains bleak. Many people are reluctant to return to daily life, and the conditions required to operate factories are difficult to meet, so a return to normal levels is expected to be challenging for the time being.

The situation is the same for factories. On the 10th, China's state-run Global Times reported that a significant number of small and medium-sized enterprises in China would find it difficult to resume operations as scheduled on the 10th. To operate factories, companies must comply with government directives by providing masks, disinfectants, thermometers, etc., but there is a shortage of supplies. Many factories are unable to secure protective equipment, causing delays in resuming operations from the 10th.

The manager of a glass manufacturing factory in Shenzhen, Guangdong Province, said, "It is impossible to operate the factory on the 10th because we cannot meet the necessary preparation requirements for reopening," explaining, "According to government requirements, during the period from the 10th to the 17th, each worker must be provided with an isolation room, thermometer, disinfectant, and mask, but this is difficult."

An executive of a company with a factory in Dongguan City, Guangdong Province, also explained, "Thousands of small and medium-sized electronic product manufacturing factories in Guangdong Province have extended their shutdowns for an additional week starting from this day."

Despite the Chinese government's order to resume operations, ongoing regional quarantines and partial lockdowns in some major cities to prevent the spread of infection are among the reasons why economic activities in China are struggling to return to normal. According to Hong Kong's South China Morning Post (SCMP), partial regional lockdowns are being implemented not only in Guangdong Province, which has the second-highest number of confirmed cases after Hubei Province, but also in major cities such as Tianjin, Nanjing, Zhengzhou, and Hangzhou.

Xiao Yu, chief economist at Shanghai Orient Securities, analyzed, "Lockdowns in all offices and communities mean that production capacity will not return to normal," adding, "If these lockdown measures continue or are prolonged until the end of February, the impact on the economy, especially the service industry, will become more apparent."

For a normal return to work on this day, population movement via railways should have been active over the weekend, but as of Saturday the 8th, the number of railway passengers was only 1.27 million, showing an 85% decrease compared to the return period after the Spring Festival last year. Chinese railway authorities estimated that railway passengers on the 9th also decreased by 82% year-on-year to about 2 million.

In this situation, the Chinese government announced new policies to resolve wage issues caused by delayed returns to work.

For employees confirmed positive or classified as suspected cases and placed under quarantine, companies must pay 100% of wages during the quarantine period, considering it as regular work. Companies cannot arbitrarily terminate contracts with employees under quarantine. Employees working from home due to self-quarantine measures are also entitled to regular wages. Employers must provide compensatory leave to employees who could not take holidays during the Spring Festival due to COVID-19 prevention and control, and pay 300% of wages to workers who worked during that period.

This content was produced with the assistance of AI translation services.