China struggles to balance coronavirus containment with economic cost as millions return to work

Most Chinese companies will resume operations this week, but the coronavirus outbreak is still raging and it’s far from business as usual

Transport restrictions, supply chain disruptions and new workplace rules to minimise the risk of transmission all cloud the short-term economic outlook

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The coronavirus, which has killed more than 1,100 people and infected nearly 45,000, shows few signs of being contained, stoking fears of a potential spike in infections as people return to work. Illustration; Lau Ka-kuen

Published: 6:00am, 13 Feb 2020Updated: 6:23am, 17 Feb 2020

To work or not to work – that is proving a crucial question for Chinese officials, companies and employees as the world’s second largest economy struggles to balance the risk of the deadly coronavirus with the need to resume business.

Most provinces across China restarted operations on Monday after an extended Lunar New Year holiday, but an influx of workers returning from their hometowns is posing a headache for authorities.

The coronavirus, which has killed more than 1,100 people and infected nearly 45,000, shows few signs of being contained, stoking fears of a potential spike in infections as people return to work.

While the central government has made it clear that containing the outbreak is an overriding priority, Communist Party leaders know they cannot afford to freeze industrial production indefinitely, especially as China’s economy grows at its slowest pace in decades.

But the scale of the public health crisis facing the country is immense. Some 160 million people will be returning from their hometowns this week, the Ministry of Transport said, putting pressure on local governments, particularly in thriving coastal regions with large numbers of migrant workers.

East coast manufacturing hubs like Shanghai, Suzhou and Hangzhou, as well as Shenzhen and Dongguan in the Greater Bay Area, face the most pressure from returning migrant workers, according to Li Xunlei, chief economist at Zhongtai Securities and a government adviser.

“Shenzhen has the largest population mobility, with many business travellers and migrant workers, and its new permanent residents have increased rapidly in the past three years,” Li said in a note. “[In Shanghai] the population base is the largest in the country. As an economic, financial, trading, and shipping centre, the scale of migration remains large, and a lot of [workers] came from Henan and Anhui provinces that had serious virus infections.