Coronavirus: how fast can China revive the economy after outbreak?

Beijing is keen for normal economic activities to resume amid concerns some local coronavirus containment measures are weighing the economy down

But remaining restrictions still pose a problem for many smaller businesses that have limited resources or rely on a fully functional supply chain

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Chinese authorities are carefully balancing efforts to control the novel coronavirus epidemic and minimize its impact on the economy. Photo: Xinhua

Published: 8:30pm, 12 Feb 2020Updated: 10:37am, 14 Feb 2020

A significant shift is taking place across China as local authorities are being told by Beijing to kick start economic activities and to revoke certain draconian measures limiting the flow of cargo and people.

While containing the spread of the novel coronavirus, which has infected nearly 45,000 people and killed more than 1,100 people across the country, remains a priority for local Communist Party officials, the message from the central government is clear – they cannot put the country’s long-term economic prospects at risk by overreacting to the outbreak.

The resumption of work at factories, construction sites and office buildings, however, cannot be done overnight as China’s economic hubs – including the Yangtze River Delta, the Pearl River Delta and major cities like Beijing and Shanghai – also have the greatest potential exposure to the pneumonia virus due to an influx of returning migrant workers.

Companies engaged in the production of medical equipment – including masks – and delivery firms are the first group of businesses to restart operation, local government directives show. Factories and manufacturers that employ only locals and take sufficient quarantine measures are next in line.

In Hangzhou, for example, people returning to work must have been in the eastern Chinese city for 14 days, and be in good health; they must not have visited a virus-hit area since the start of the year; and they must not have been exposed to suspected or confirmed cases or any infections in their neighbourhood.

One common requirement for factories is that the employer must provide masks to its employees, typically two per employee for 10 days. This has proved difficult, however, as China is experiencing a severe mask shortage.

“As far as we know, even for those enterprises with annual sales of more than 20 million yuan (US$2.8 million) in Ningbo city, about 50, or 5 per cent of them, have been allowed to restart work so far,” said Linda Chen, who works at a company producing supporting frameworks for tablets in Zhejiang province, where Ningbo is located. “Although we have been allowed to restart production, only 20 per cent of our workers are able to return to work, mainly local Ningbo residents.”