Chinese Zhongqi Faces Crisis as Overseas Orders Decline Amid COVID-19 Pandemic

Chinese President Xi Jinping visited Wuhan, Hubei Province, the origin of the novel coronavirus disease (COVID-19), for the first time in three months since the outbreak, encouraging medical staff and patients, local media reported on the 10th. Photo by Yonhap News Agency

[Asia Economy Reporter Moon Hyewon] As the spread of the novel coronavirus infection (COVID-19) slows down in China, small and medium-sized enterprises (SMEs) that have barely resumed activities are facing a crisis of declining overseas orders due to the global spread of COVID-19.

According to the South China Morning Post (SCMP) in Hong Kong on the 14th, Chinese manufacturers are gradually returning to normal operations, but the decline in international demand is acting as a new crisis.

SCMP reported that some small and medium-sized manufacturers that relied on overseas orders are seeing orders from the US and Europe disappear as COVID-19 hits the world.

Claudia Luo, an executive of a company producing automobile parts in Guangdong Province, China’s export frontline, said, "Last month, we mainly had to worry about production, but now that the epidemic has spread worldwide, we have to worry about global demand."

Her company set a sales target of 200 million yuan for the first quarter of this year but now fears it will not even reach half of that.

Due to the spread of COVID-19, many manufacturing companies in China mostly suspended operations from January this year and have only recently begun to gradually normalize production.

According to the Chinese government’s announcement, large enterprises have resumed operations at a rate of up to 95%, but the resumption rate for SMEs remains at about 60%. SMEs are facing a double burden of operational restart issues such as securing workers and a decline in demand.

An official from a think tank of the Guangdong provincial government said, "We surveyed 275 SMEs in early January, and 60% were already on the brink of collapse due to debt," expressing concern that "the epidemic will make the situation even worse."

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