China is out of lockdown and life is beginning to return to normal. In Beijing, the restaurants are full, the shops are buzzing, and the street is a hive of activity. Further south, where restrictions are perhaps more lax due to these cities’ greater distance from Beijing, even gyms and recreational centres are re-opening. The only indication that life has not returned to normal is the fact that everyone is wearing a facemask, and everyone will have had their temperature and ‘health code score’ checked before doing anything. Contact tracing has taken off in China in a big way.
To other nations looking to ease local lockdown restrictions, China offers some cause for optimism. However, China hasn’t been a fast rebound, rather a slow building of confidence week on week, as over 90% of people downloaded contact tracing apps, indicating whether they or others in their vicinity have cause for concern over their proximity to the virus.
China’s tourism authorities indicated that US$6.7bn was spent over the May day weekend, as over 150 million domestic tourists set off in their cars to enjoy the better weather that the spring brings. The fact that people chose to travel by car is yet another indicator that all is not back to normal in China, however. Once home to the fastest growing aviation market in the world, China’s planes remain grounded and its high-speed trains largely unused, since intercity travel remains logistically challenging, given that every city requires travelers to use a different contact tracing app.
National business activity now sits at an estimated 82%. A number which enjoyed expediential growth between early February and mid-March, but has plateaued ever since. Getting that final 20% will probably be as hard a task, if not harder, than rebooting the first 80% of the economy.
As businesses get back to work, the CBI Beijing Office is working closely with members to determine what constitutes best practise in preventing a second wave of COVID-19 in the work-place. The team in China is examining the impact issues such as closed borders, a reduced aviation sector and politics are having on supply chains and the ability of businesses to get up and running again. China-specific briefings and policy updates can be found on the CBI China blog platform, China Direct, here. A series of China-focussed webinars will also take place on the CBI Coronavirus Hub over the coming weeks, including a conversation with China’s Ambassador to the UK, Liu Xiaoming on how COVID-19 will affect UK-China trade relations.
Key take-aways for UK business
- To other nations looking to ease local lockdown restrictions, China offers some cause for optimism. National business activity now sits at an estimated 82%, and China’s tourism authorities indicated that US$6.7bn was spent over the May day weekend
- But demand is still week, people are fearful, so planes are grounded, trains are empty, and the last 20% of business activity will be the hardest
- The CBI Beijing Office is working closely with members to determine what constitutes best practise in preventing a second wave of COVID-19 in the workplace.
New Delhi, India
India has been in a state of nationwide lockdown since 25 March 2020, with three consecutive extensions to flatten the outbreak curve. India’s COVID-19 trajectory tapered slightly in mid-April but it continues to be steeper compared to Asian peers such as Singapore, Japan, Indonesia, and Pakistan, while it is still flatter than that of the US.
Meanwhile, the economic consequences from the continued lockdown are beginning to stare the country in the face. Firms are finding it increasingly difficult to sustain even the minimal operations required to keep themselves alive. The huge population of blue collared workers and migrant labourers are fighting for food, shelter and livelihood since the sudden lockdown. The Government of India has permitted operations only in what it categorises as essential goods and services including medical, pharmaceuticals, media, IT and food related products.
The administration in India issued guidelines to restart the economy with a staggered approach from 20 April and has divided districts into red/orange/green zones. Railways resumed operations with reduced capacity from 12 May, while businesses and markets may also be allowed to reopen in areas with low incidence. Efforts are being made to ensure social distancing with strict guidelines on entry/exit norms, internal transportation for workers and alternate day timetable within business activities.
The CBI team in Delhi has worked closely with DIT’s India team and the Confederation of Indian Industry (CII) to give members practical support, like securing curfew passes for employees and ensuring that key sectors like IT banking and insurance are included on the government list of critical industries. The CBI have escalated member concerns such as cash flow for universities refunding students to the Indian Government via DIT’s task force. The CBI India team is also organising virtual India Advisory Board to interact with senior authorities of Indian and the UK government to influence planning for the recovery.
Key take-aways for UK business
- India is slowing coming out of lockdown with a commitment from government to a massive £216bn bail-out
- India shows how supply chains in services have also had to adapt as call centres adjusted to working from home
- The CBI New Delhi Office has worked closely with Member and DIT to ensure the rights sectors e.g. FS are included on the list of critical businesses and to raise obstacles to trade like barriers to export of Active Pharmaceutical Agreements.